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HHS releases draft application for early retiree claims

Posted On: Jun. 2, 2010 12:00 AM CST

WASHINGTON—A newly posted draft application by the Department of Health and Human Services details the kind of information regulators will seek from employers applying for federal reimbursement of health care claims incurred by early retirees and their dependents.

That reimbursement is authorized by the Early Retiree Reinsurance Program which, in turn, was created by the new health care reform law. The ERRP, which is set to begin this month and has $5 billion in federal funding, will reimburse employers for a portion of health care claims incurred by retirees who are at least age 55 but not eligible for Medicare, as well as retirees’ covered dependents, regardless of age.

The reimbursement, which will be distributed on a first-come, first-serve basis after a plan sponsor’s application and filing of claims information, will kick in after a participant incurs $15,000 in claims costs. After that, the government will reimburse plan sponsors for 80% of a participant’s claims, up to $90,000 during a plan year.

Information that employers will have to provide, according to the draft application, includes an estimate of how much they expect to receive in reimbursement during a two-year period and the programs employers have in place to reduce the cost of chronic and high-cost conditions, which are defined as a condition for which $15,000 or more in health care claims are likely to be incurred by one plan participant. In addition, plan sponsors have to provide information on how they plan to use the reimbursement. Under law, the reimbursement employers must use the reimbursement to reduce their costs, the plan enrollees’ costs, or a combination of the two.

HHS regulators previously said they intend to have a final application available by the end of June. The draft application and accompanying documents are available online at www.reginfo.gov.