Guest Article

(From the August 9, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Update on Early Retiree Reinsurance Program - Relief for Incomplete Applications

Plan sponsors who submitted incorrect or incomplete applications to the Early Retiree Reinsurance Program (ERRP) due to the timing of final instructions issued by the Department of Health and Human Services will be given an opportunity to correct their applications.

The Department of Health and Human Services began accepting applications on June 29 from plan sponsors who want to participate in the ERRP. The ERRP is a temporary program by which plan sponsors who are accepted for participation can request reimbursement of a portion of their early retiree health benefit costs for claims that are incurred on and after June 1, 2010. Since the program is set to expire on January 1, 2014 - or, if earlier, when the $5 billion in funding is exhausted - and early Departmental releases indicated that participation would be granted on a first-come first-served basis, plan sponsors were eager to get their applications in as soon as the gates lifted.

In a recent update, the Department observed that some plan sponsors had submitted incomplete or incorrect applications because they apparently failed to review the Department's supplemental submission materials released on June 29. It also noted certain additional problems with applications it had received. In terms of how the matters would be handled, the Department explained that:

The Update advises plan sponsors not to resubmit their application in these cases. If a second application was already submitted, the sponsors are urged not to contact the Department. According to the Update, the Department is developing a process to address that situation.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2010, Deloitte.