HHS Early Retiree Reinsurance Program to Stop Accepting Applications

If your company has a retiree medical plan and has not applied to participate in the Early Retiree Reinsurance Program (ERRP), now is the time to do so. HHS has announced that it will stop accepting applications for the ERRP as of 30 calendar days after April 5, 2011 (May 5, 2011). Reimbursement requests from plan sponsors already participating in the program will be honored beyond that date, until program funds run out.

As we discussed in an earlier post, the ERRP reimburses participating plan sponsors for up to 80% of the cost of qualified retiree health benefit claims between $15,000 and $90,000 incurred per person (retiree, spouse, surviving spouse, and dependents) per plan year. HHS recently reported that ERRP funds are expected to run out during fiscal 2012, so it is not surprising that HHS is exercising its authority under the Affordable Care Act to stop accepting applications.

Any employer sponsoring an early retiree medical plan should seriously consider applying to participate in the ERRP before the deadline. HHS will only accept applications it actually receives by May 5, 2011 – merely postmarking an application before this date will not be sufficient. Though time is short, it is certainly not too late. We have assisted a number of clients with the application process, and in our experience the process is relatively quick and painless. In most cases the ERRP application can be completed with information and materials already on hand, and any additional required information should be easy to get from the insurer or third party administrator. There is no fee to apply.

Plan sponsors already participating in the ERRP should be diligent in submitting eligible reimbursement claims, because the program will end when the funds are exhausted.

For more information on the ERRP visit our earlier posts, here, here, here, and here, or visit http://errp.gov/.