Deadline set for use of Early Retiree Reinsurance Program funds

WASHINGTON—Employers and other early retiree health care plan sponsors have until the end of 2014 to use federal government claims reimbursement funds authorized by the health care reform law, the Centers for Medicare and Medicaid Services.

While “our expectation” is that plan sponsors will use Early Retiree Reinsurance Program funds as soon as possible, plan sponsors have until Dec. 31, 2014, to use the money, CMS said in recent guidance.

Under the ERRP, early retiree health care sponsors are reimbursed for 80% of claims—up to $90,000—after a participant incurs $15,000 in expenses. Plan sponsors must use the reimbursement to offset increases in their premiums or costs or plan participants' costs, such as premium contributions and out-of-pocket expenses such as deductibles.

Proceeds cannot be used to add to plan sponsors' general revenues.

Earlier, CMS disclosed that it has stopped paying new claims.

Through Jan. 19, $4.73 billion in reimbursement payments had been made. But that amount, when added to pending reimbursement requests, exceeds the $5 billion Congress appropriated for the ERRP.