Retiree Drug Subsidy

The Retiree Drug Subsidy Program is a program offered by the Centers for Medicare & Medicaid Services (CMS) to reimburse health plan sponsors (municipalities, unions and private employers) for a portion of their eligible expenses for retiree prescription drug benefits. This enables Plan Sponsors to continue providing drug coverage to their Medicare-eligible retirees at a lower cost.

Benefits of the RDS Program for participating Plan Sponsors include:

To qualify for the subsidy, a Health Plan Sponsor must show that its coverage is "actuarially equivalent" to, or at least as generous as, the defined standard Medicare Part D coverage.

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