What Are the Implications of the Early Retiree Reinsurance Program?

July 13, 2010 (PLANSPONSOR.com) - On June 29, 2010, the Department of Health and Human Services ("HHS") began accepting applications for the Early Retiree Reinsurance Program ("ERRP").   


In light of the program’s recent establishment (see HHS Updates Materials for Early Retiree Reinsurance Program), this week’s column addresses a few frequently asked questions about the program.

What does the program do? 

The program reimburses plan sponsors for 80% of the medical claims costs between $15,000 and $90,000 for early retirees (age 55-64).  Plan sponsors that wish to participate must submit an application in order to become certified and then will be able to submit claims incurred after June 1, 2010.  The ERRP website includes additional information about plan sponsor eligibility criteria and FAQs – http://www.hhs.gov/ociio/regulations/.

Where can I find the application? 

The ERRP application has been posted at http://www.hhs.gov/ociio/regulations/.  It mirrors a draft version of the application that was released earlier, except that the new application no longer asks for the social security number and date of birth for a plan’s authorized representative and account manager.    

Additionally, HHS has provided the address where applications should be submitted:

                        HHS ERRP Application Center

                        4700 Corridor Place

                        Suite D

                        Beltsville, MD 20705

When is the application due? 

HHS is currently accepting applications, and there is no set deadline by when applications should be submitted.  Since this is the initial certification process (not the actual claims submission), HHS has indicated it will continue to receive applications for some (unspecified) time.  However, plan sponsors must project claims costs as part of the application, and the program only has $5 billion allocated for it.  When all funds have been paid out, the program will be terminated.  HHS has been given the authority to stop accepting applications if it becomes clear that there will not be enough money in the program to fund reimbursements.  This provides an incentive to apply quickly because a plan must be certified before it can begin submitting claims.

Does this mean that we should rush our applications? 

While plan sponsors will want to act expeditiously, they also should take the time to carefully review their applications before submitting and possibly seek the advice of legal counsel.  HHS has also stated that incomplete applications, and applications that do not comply with the guidelines, will be rejected.  If a plan is rejected, it will have to resubmit its application.  Since the program is first-come, first-serve, it is likely that other applications will be received during the interim period.

Did HHS release any additional details on the application format? 

On its website, HHS posted a "Dos and Don'ts" list that further specifies:

  •  Applications must be typed. 
  • Every required field must be completed. 
  • Additional pages must be typewritten, in 12 point font or larger, clear and dark enough for scanning, and on 8.5 x 11 inch paper. 
  • Only completed final applications will be accepted (do not submit the draft).
  •  Applications must be mailed via US Postal Service to the address above.


Got a health-care reform question?  You can ask YOUR health-care reform legislation question online at http://www.surveymonkey.com/s/second_opinions   


You can find a handy list of Key Provisions of the Patient Protection and Affordable Care Act and their effective dates at http://www.groom.com/HCR-Chart.html    


Christy Tinnes is a Principal in the Health & Welfare Group of Groom Law Group in Washington, D.C.  She is involved in all aspects of health and welfare plans, including ERISA, HIPAA portability, HIPAA privacy, COBRA, and Medicare.  She represents employers designing health plans as well as insurers designing new products.  Most recently, she has been extensively involved in the insurance market reform and employer mandate provisions of the health-care reform legislation.  

Brigen Winters is a Principal at Groom Law Group, Chartered, where he co-chairs the firm's Policy and Legislation group. He counsels plan sponsors, insurers, and other financial institutions regarding health and welfare, executive compensation, and tax-qualified arrangements, and advises clients on legislative and regulatory matters, with a particular focus on the recently enacted health-reform legislation.  

PLEASE NOTE:  This feature is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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