Guest Article

(From the January 23, 2012 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

ERRP Reminder: March 30 Deadline for Submission of Full-Replacement Claim List

As a reminder, plan sponsors that participated in the Early Retiree Reinsurance Program (ERRP) have until March 30 to submit, for each plan year for which ERRP funds were received, a full-replacement claim list that passes the automated edits (i.e., is error-free) and an associated reimbursement request. According to an ERRP release, in the event the items are not submitted, the Centers for Medicare & Medicaid Services (CMS) will initiate procedures to recoup the ERRP funds. Recouped funds will be used to pay outstanding ERRP reimbursement requests.

In October 2010 the ERRP began accepting requests for reimbursement based on a summary of aggregated claims (i.e., plan-level data). In April 2011 it began to require the submission of a detailed claim list with each reimbursement request and, in October 2011, it implemented a fully-automated system to review and approve the detailed claim lists. With the implementation of the automated system, plan sponsors were given until December 31, 2011 to submit error-free claim lists to support reimbursements they had received based on aggregated data. That deadline was further extended to March 30, 2012.

The ERRP release also discloses that CMS has retained a contractor to conduct audits. Audits will be conducted of a subset of the participating plan sponsors to verify compliance with the ERRP rules (e.g., eligibility of early retirees, validity of claims submitted, and use of program funds). CMS is also conducting a survey of plan sponsors about their use of the program's funds.

The ERRP was established under the Patient Protection and Affordable Care Act to reimburse employers for a portion of their medical claims costs for early retirees (i.e., age 55 and older and not eligible for Medicare) and their spouses, surviving spouses, and dependents. Claims for reimbursement could be made for medical care going back to June 1, 2010. The program was set to expire on January 1, 2014, or when the $5 billion in appropriated funding was exhausted, whichever occurred first. Last month the CMS announced that the ERRP would be closed for claims incurred after December 31, 2011, due to the projected exhaustion of funds.

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, Erinn Madden 202.220.2692, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2012, Deloitte.