Benefits

Survey Set for Employers on How They Used Early Retiree Reimbursement Funds

By Jerry Geisel

Nov. 16, 2011

The Centers for Medicare & Medicaid Services says it intends to survey employers and other early retiree health care plan sponsors on how they used money provided under a federal program.

Under the $5 billion Early Retiree Reinsurance Program set up as part of the health care reform law, approved plan sponsors have received partial reimbursement of claims they have paid.

That survey, the CMS explained in a notice published in Wednesday’s Federal Register, is required under the Patient Protection and Affordable Care Act, which requires the secretary of the Department of Health and Human Services to develop a mechanism “to monitor the appropriate use of the funds.”

In general, the reimbursement must be used to reduce employers’ and/or retirees’ health care costs.

Through Oct. 14, more than $3.6 billion of the $5 billion program had been distributed, according to a Nov. 4 CMS report.

Under the ERRP, the government reimburses employers and other early retiree health care plan sponsors for a portion of medical claims filed after June 1, 2010, by retirees and their covered dependents, as long as the retiree is at least 55 years old and not eligible for Medicare.

The program pays 80% of medical costs up to $90,000 per year, once a participant has incurred $15,000 in claims.

The government, anticipating exhaustion of the program’s funds, stopped accepting new applications to participate in the program in early May.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management.

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