News and Events

As of December 2, 2011, the Early Retiree Reinsurance Program (ERRP) disbursed over $4.5 billion to a variety of businesses, including for-profit companies, schools and educational institutions, unions, State and local governments, religious organizations and other nonprofit Plan Sponsors, to help reduce their health plan benefit costs and those of their plan participants, including early retirees and their spouses, surviving spouses, dependents, and active workers.

Given the approach of the $5 billion funding limit, the ERRP Center has instituted an incurred date cut-off as outlined in the Federal Register (http://www.gpo.gov/fdsys/pkg/FR-2011-12-13/pdf/2011-31920.pdf). Plan Sponsors must not include in their Claim Lists any claim lines for which the incurred date is after December 31, 2011. If health benefit items or services with later incurred dates are submitted, the entire Claim List will be deemed invalid and the Claim List Response File will return errors for those claim lines which have incurred dates after December 31, 2011.

As reported previously, the Centers for Medicare & Medicaid Services (CMS) continues to accept ERRP reimbursement requests for claims incurred on or before December 31, 2011. If there are not sufficient funds to pay in its entirety the last reimbursement request that causes the initial exhaustion of the $5 billion, CMS will use available funds to partially honor that reimbursement request, and will pay the balance of that reimbursement request if additional funds become available.

Reimbursement requests received after the $5 billion has been fully exhausted will be held in the order of receipt, pending the availability of funds. Sponsors with reimbursement requests on hold can expect to:

• Receive an email notifying them that their reimbursement requests have been placed on hold pending the availability of funds;

• Have access to information about the position of their requests in the list of held reimbursement requests; and

• Be paid in the order in which reimbursement requests were received, if additional funds become available. In such cases, reimbursement requests will be honored until there are not sufficient funds to pay a reimbursement request in its entirety, in which case, that request will be partially paid and the balance will be paid if and when additional funds become available. Each time a partial payment is processed, the Plan Sponsor will receive an email notification regarding the specific amount paid and the balance remaining to be paid.

If data inaccuracies or changes to previously submitted price concession amounts (such as rebates) are identified, Plan Sponsors must continue submitting updated data. This will be accomplished by following the guidance in the Explanation of the Processes for Reporting Early Retiree and Claims Data Inaccuracies, and for Reopening document available on the Regulations and Guidance Page.

For each plan year for which a Plan Sponsor has been reimbursed with ERRP funds, the requirement to submit a full-replacement Claim List that passes the automated edits and an associated reimbursement request by March 30, 2012 remains. Absent the submission of such an error-free Claim List and a corresponding reimbursement request, CMS will initiate procedures for recoupment of the funds paid to the Plan Sponsors. As a result of such collection, any funds returned to the program will be used to pay outstanding reimbursement requests in the order in which they were received.

In addition to the Claim List requirement, CMS has taken several additional steps to promote the integrity of data submitted to, and claims paid by, ERRP. CMS has recently acquired the services of David-James LLC as a program integrity contractor to conduct audits of a subset of Plan Sponsors to verify compliance with program rules, including eligibility of early retirees, validity of claims submitted, and use of program funds. In addition, CMS recently issued a survey to Plan Sponsors who have received ERRP reimbursement in order to collect additional information about their use of program funds. Plan Sponsors were sent requests to complete the survey on December 1. Initial results will be available in early 2012.