HHS Releases Draft of Early Retiree Reinsurance Program Application and Instructions

Yesterday HHS posted a draft version of the ERRP application and instructions. We discussed the ERRP a previous post. In sum, the ERRP will reimburse employers for a portion of the health care claims incurred by retirees who are at least 55 but not eligible for Medicare, as well as their covered dependents (regardless of their ages).

The draft application and instructions give employers an idea of what the application will likely look like. Among other things, it asks employers to describe the programs they have in place to reduce the cost of chronic and high-cost conditions, provide an estimate of the amount of reimbursement they expect to receive during the first two years of the ERRP, and indicate how they will use the reimbursements.

The final application should be ready by the end of June, but given the expected popularity (and predicted underfunding) of the ERRP employers would be wise to review the draft application and prepare for the final, which HHS has said will be released by the end of June.

As we stated in our earlier ERRP post, any employer sponsoring an early retiree medical plan should seriously consider applying to participate in the ERRP – to miss this opportunity is really to leave possibly significant (depending on the size of your retiree plan) amounts of money on the table.