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ERIC
ERIC Updates

THE ERISA COMMITTEE

<nobr>Oct 4, 2010</nobr>

HHS Releases Additional ERRP Guidance

The Department of Health and Human Service (HHS) recently posted a fair amount of new information on its Early Retiree Reinsurance Program (ERRP) Website: http://www.errp.gov.

The focus of the new information is that plan sponsors with an ERRP-approved application may now submit their lists of early retirees to the secure ERRP website. Guidance is provided on how to identify early retirees and how to format the list and submit it to HHS. Early retiree lists MUST be filed with HHS before a claim for reimbursement may be submitted. HHS reiterates that plan sponsors will be able to submit these claims in October.

Among the noteworthy points made (or emphasized) in this new information are that the early retiree list must be specific to the year for which the reimbursement is requested. Each list may contain only those early retirees and family members who are eligible for claims reimbursement because they have passed the $15,000 threshold -- except that it will be necessary to include information about the early retirees whose family members have passed the threshold, even if the early retiree has not. Plan sponsors may submit updated lists as often as they like.

The new guidance provided by HHS includes a helpful slide show, available at the ERRP website. HHS has also updated the following lists of FAQ (referred to on their website as "common questions"):


  • "Applications" (added new H100-19 to H100-22)

  • "Early retirees" (added new H300-9 to H300-31)

  • "System Roles and Privileges" (looks as though all the questions and answers are new)

  • "Miscellaneous" (updated answers)

Informal guidance: Gretchen Young on Monday spoke with a representative of the HHS about the ERRP program and asked him several questions. This is what she found out:

First, he verified that to be eligible for ERRP claims reimbursement, an early retiree must be lawfully present in the U.S. She asked him how plan sponsors could verify that this was true for each of their early retirees and family members, and he responded that sponsors should look at the "certification" FAQ (reproduced below). He then said that HHS hopes to issue guidance on this requirement in the near future.

(Included in the ERRP "Costs and reimbursements" common questions): What does it mean for a plan sponsor to "certify" information before its first reimbursement request?

ANSWER: As part of each plan sponsor's first reimbursement request for each of its Early Retiree Reinsurance Program (ERRP) applications, the sponsor's Authorized Representative must indicate that the sponsor will make a reasonable, good faith effort to meet all the requirements necessary to make a reimbursement request, and that the sponsor will be prepared to demonstrate that it has made such a good faith effort upon request. (Answer ID: 200-21)

Second, he verified that claims will be reimbursed in the order of receipt (of claims submissions).

Last, with respect to the approval process of plan sponsor applications, if you are concerned that your application has been lost or not handled in a reasonable amount of time, you can call the ERRP helpline or email them. The appropriate contact information is at their website: http://www.errp.gov/contact_us.shtml.

Additional ERRP Guidance and Information

HHS also recently released other ERRP guidance and information addressing:


  • "Claims Ineligible for Reimbursement under the Early Retiree Reinsurance Program;"

  • "Instructions for Delivering Required Form Notice to Plan Participants of Sponsors Participating in Early Retirement Reinsurance Program, and Form Notice;"

  • "Preparing for ERRP Reimbursement: Identifying Early Retirees;" and

  • An updated list of "common questions" posted on the HHS ERRP-devoted website: http://www.errp.gov/news_events.shtml.

Claims ineligible for reimbursement: This document primarily addresses the point that reimbursable items under ERRP are items and services for which Medicare would generally reimburse. Conversely, ERRP will not reimburse items that are generally excluded from Medicare coverage.

The point of the notice seems to be that some of Medicare's specific limits will not apply in the ERRP context. Thus, HHS will not impose Medicare frequency or maximum limits under ERRP, nor will HHS apply Medicare medical necessity determinations. HHS will not require that plan sponsors develop a claims history, and they will not generally impose Medicare's restrictions on the site or circumstances of care.

The notice ends with a list of items that are not reimbursable by Medicare or ERRP, including routine foot care, hearing aids, assisted suicide, abortions, and drugs that are not covered by a standard Part D plan (unless covered under Parts A or B.)

The notice concludes by saying that HHS in October will post a detailed list of codes that correspond to these exclusions.

Notice to plan participants: The first ERRP reimbursement request submission includes a certification that the sponsor will provide a form notice to plan participants notifying them that, because the plan is participating in ERRP, the plan may use the payments to offset employer or participant contributions (or co-pays, etc.), and therefore, plan participants may experience changes in the terms and conditions of their plan participation.

The new ERRP document provides instructions on delivering this required form notice, including who must get the notice, and the time and manner of delivering the notice. The document also contains the form notice that must be provided.

Identifying early retirees: This document is intended to help plan sponsors identify the early retirees whose medical costs are eligible for ERRP reimbursement. This identification is essential because plan sponsors must submit a list of early retirees via the HHS ERRP website ( www.errp.gov ) before they submit claims for reimbursement.

In this document, HHS notes that there are two primary criteria in determining whether an early retiree's medical costs are eligible for ERRP: whether the individual truly is an early retiree, and whether the retiree (or family member) has accumulated claims in excess of the $15,000 threshold.

The document specifies that the early retiree must meet the following criteria:


  • 55 and older;

  • Enrolled in the plan sponsor's health plan;

  • Not eligible for Medicare; and

  • Not an active employee of the plan sponsor.

The remainder of the document is devoted to a discussion of how to calculate the applicable thresholds and how to actually submit the early retiree list to ERRP. They also note that further information on the identification of early retirees is available in the "common questions" list on the ERRP website.

List of common questions: This is a list of helpful ERRP questions and answers provided by HHS covering eight different categories, including "applications," "costs and reimbursements," and "use of reimbursement." ( Again, this is available at http://www.errp.gov/news_events.shtml. )

Here is a partial list of some of the questions addressed at this site (the 100, 200, etc. refers to the category of questions and answers, and the second number refers to its position within that category):


  • Does a sponsor need to make HHS aware of any changes or corrections in information reported on the sponsor's application? (100-8)

  • If an applicant has not been informed whether its application has been approved or denied, what should it do? (100-9)

  • Can retiree-only plans participate in the ERRP? (100-18)

  • Can the amount of sales tax on health benefits be included in reimbursement requests? (200-6)

  • If a claim is incurred before June 1, 2010 but paid after June 1, 2010, and the claim is within the cost threshold and cost limit, will the sponsor be reimbursed for this claim? (200-11)

  • What is "prima facie" evidence that an early retiree or the early retiree's spouse, surviving spouse or dependent paid his or her portion of the claim? (200-12)

  • May claims incurred while an individual (or the individual's spouse, surviving spouse, or dependent) is receiving health benefits via COBRA, count towards the cost threshold and cost limit, and may sponsors be reimbursed based on these claims? (200-18)

In addition, we have reproduced in their entirety two questions and answers because they have been a source of significant concern to ERIC members:


  • If a sponsor has an approved application for the Early Retiree Reinsurance Program, has received program reimbursement for that application, but does not intend to request any additional program reimbursement for the application, must it continue to comply with all ERRP requirements? (500-5)


    • ANSWER: Until such time as it requests termination of participation in the program and HHS accepts the request for termination, yes. Before HHS will accept a request for termination, the sponsor will have to demonstrate that it has used all of the reimbursement consistent with the program requirements or has returned any unused reimbursement to HHS. We note that even after termination of participation in the ERRP, a plan sponsor that had participated in the program must still comply with certain applicable requirements, including requirements relating to audits and record keeping.

  • How may a sponsor comply with the statutory prohibition on using program funds as general revenue? (700-2)


    • ANSWER: To the extent a sponsor uses Early Retiree Reinsurance Program (ERRP) reimbursements to offset increases in its own health benefits or health premium costs, the ERRP regulation requires a sponsor to maintain its level of contribution toward the plan solely as a way of ensuring that the sponsor does not violate the statutory prohibition on using program reimbursement funds as general revenue. We interpret this requirement as applying with respect to the plan, and not necessarily with respect to each plan participant. A sponsor may demonstrate that it meets this requirement in a number of ways: using aggregate spending trends, per-capita spending trends, or other methods subject to Secretarial approval.

    Questions or comments on this issue should be addressed to Gretchen Young ( gyoung@eric.org ).


Websites:

ERRP News Releases

Claims Eligible for Reimbursement

Notice to Plan Participants

Preparing for ERRP Reimbursement: Identifying Early Retirees

ERRP Mainframe Early Retiree File Processing Layout


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