As you are aware, an Early Retiree Reinsurance Program was included as part of the Patient Protection and Affordable Care Act of 2010 (PPACA). Last week, Health and Human Services (HHS) announced the interim final rules detailing employer requirements to qualify for the $5 billion program funding.
The reinsurance program applies to employer-sponsored fully insured and ASO plans that offer health benefits to retirees age 55 to 64 years old, but not Medicare-eligible, and their spouses and covered dependents. It allows plans to be reimbursed for 80 percent of certain claim expenses per individual per plan year.
The following are key points from the interim final rules:
- Claim expenses incurred prior to June 1 for the current plan year as of June 1, will count toward the threshold of $15,000; however, only claim expenses incurred on or after June 1 will count toward the limit for the plan year for a given individual.
- Plans may be reimbursed for 80 percent of certain claims between $15,000 and $90,000.
- The program will end on Jan. 1, 2014, or when the $5 billion funding runs out, whichever occurs first.
- Employers must use reimbursements to reduce the cost-sharing requirements of participants in early retiree plans and/or to reduce plan expenses to provide the coverage.
- Applications will be available in late June 2010 and HHS will certify, through the applications, the plans eligible to participate in the program.
- Eligible program claims include: medical, surgical, hospital, and prescription drug.
- Claims paid for diagnosis, care, mitigation or prevention of physical or mental diseases or conditions are eligible for reimbursement.