Guest Article

(From the October 4, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Plan Sponsors Are Advised to Begin Preparing ERRP Early Retiree Lists

The Department of Health and Human Services (DHHS) is advising plan sponsors who are participating in the Early Retiree Reimbursement Program (ERRP) to begin preparing their early retiree lists in anticipation of allowing the lists to be submitted beginning in early October.

Preparing the Early Retire List

In a September 24, 2010 announcement, the DHHS describes how ERRP-participating plan sponsors are to prepare and submit their lists of early retirees. A list is to be submitted before - but as close as possible to when - any request for reimbursement will be submitted. The list needs to be specific to the plan year for which reimbursement is being requested, and must relate only to costs eligible for ERRP.

Consistent with earlier guidance, the announcement reiterates that, to be eligible, the subscriber must be an "early retiree" - that is, age 55 or older, enrolled in the plan identified in the ERRP application, not eligible for Medicare, and not an active employee of the plan sponsor. If the subscriber is an early retiree, his or her associated members (i.e., spouse, surviving spouse, dependents) are also eligible for inclusion in the ERRP. Only those early retiree subscribers and their associated members who have accumulated - on an individual basis - $15,000 or more in claim amounts for the plan year are eligible for reimbursement. To count toward this threshold, the claim amounts must be:

Only those individuals who are early retiree subscribers (or their associated members) who meet the $15,000 threshold are to be included on the early retiree list - although, if a member meets the threshold but the subscriber does not, the subscriber's record must also be submitted with the associated member.

Submitting the List

The early retiree lists can be submitted only after the plan sponsor completes the setup on the ERRP secure website. Sponsors must designate whether their lists will be submitted through a mainframe connection to the ERRP Center, or through uploading to the ERRP secure website. If mainframe submission will be used, the sponsor is advised to call the ERRP Center as soon as possible to begin the setup process (which could take a couple of months to complete). Sponsors are required to use a specified format for submitting their early retiree lists, and a specific file template must be used if the list will be uploaded to the ERRP secure website.

After submission of an early retiree list, the plan sponsor will receive a response file from the ERRP Center indicating the periods of time each individual is eligible for ERRP. Plan sponsors are to use the response file in making their requests for reimbursement (i.e., are to use the records to ensure they are only including claim amounts for individuals who are eligible for ERRP). DHHS advises that, on audit, plan sponsors will be expected to demonstrate that they only included such claims in their request for reimbursement.

Cost Data

A separate September 28, 2010 announcement advised that plan sponsors will be able to submit claims cost data to the ERRP beginning in mid-October for reimbursement consideration, and that (at least initially) the data will be submitted only at the plan level - not at the benefit option level or at the medical item or service level. Later, at a time determined by the ERRP Center, plan sponsors will be required to supplement their plan-level claims cost data with the corresponding claims-level data (i.e., data for each medical item or service).

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.