HRB 5 - Early Retiree Subsidy – Initial Application Date is Approaching
Released June 11, 2010I Download as a PDF June 11, 2010
-- As part of the Affordable Care and Patient Protection Act of 2010, an Early Retiree Reinsurance Program has been established. This temporary program, established by way of the health care reform laws, provides reimbursement of certain expenses to plan sponsors of group health plans that provide retiree coverage to early retirees, and their eligible spouses and dependents. While the Department of Health and Human Services set June 1, 2010, as the new effective date of this program, much is still needed to do in order to qualify for this reinsurance subsidy. It is important to pursue this quickly if you are interested, as only $5 billion of funds are allocated to this program. More questions still remain at this point, including the extent to which the employer may benefit from receiving a subsidy. The clear intent of this program is to have employers pass along the benefits to early retirees currently included in their group plan. The benefits could occur in the form of reduced contributions for coverage, lower deductibles, lower copayments and other forms of subsidies.
The comment period ended June 4th, and according to information posted on the HHS’ Office of Consumer Information and Insurance Oversight website, HHS has indicated that the draft application is to remain in its current form, except for adding the date that the initial application must be made, and the location for the application’s submission (see FAQ below):
From HHS OCIIO’s Early Retiree Reinsurance Program Application FAQs:
4. Where should I send the application for the Early Retiree Reinsurance Program once it is completed?
ANSWER: The U.S. Department of Health & Human Services wanted to publish a copy of the application as soon as possible to assist potential applicants in better understanding how to prepare an application, and to give applicants time to assemble information required in the application. As such, the Draft Application is available now. The Official Application will be posted later in June with the only anticipated change being the addition of an address where the Official Application can be sent. Information about how and where to send completed applications, and when sponsors can begin submitting applications, will also be posted on this webpage later in June.
The draft (and possibly final) application is available on the HHS website and can be viewed here. Instructions for completing the application are also available and can be viewed here.
A prior communication, provided a preliminary list of information that would be required to include in the application. According to the Draft Application, following are required items to be submitted to HHS:
Detailed plan information, including:
- Benefit options provided under the plan; and
- Programs and procedures for chronic and high-cost conditions
- Projected/estimated amount of Early Retiree Reinsurance Program Reimbursements
- Description of the intended use of the Program Reimbursements
- Banking Information for Electronic Funds Transfer
- Plan Sponsor Agreement of the following:
- Attestation of compliance with the program requirements, including conditions for submission of data for obtaining reimbursement and record retention requirements.
- Acknowledgement of reimbursement-related and other representations made by designees, if applicable.
- Certification of an executed written agreement between the plan sponsor and its health insurer or plan regarding disclosure of information, data, documents, and records to HHS, that are necessary for the Plan Sponsor to comply with the requirements of the Program.
- Acknowledgement by the Plan Sponsor on the use of data, records and related information collected under the Program necessary to determine reimbursements.
- Acknowledgement that information provided by plan sponsor and any subcontractor, is to obtain federal funds.
- Agreement by plan sponsor to establish and implement proper safeguards against unauthorized use and disclosure of the data exchanged pursuant to the application, in accordance with HIPAA.
- Authorization for the Secretary of HHS to initiate reimbursement, credit entries and other adjustments, including offsets and requests for reimbursement to an appointed financial institution.
- Attestation that, as of the date this Application is submitted, the Plan Sponsor has policies and procedures in place to detect and reduce fraud, waste, and abuse related to the Program.
- Agreement to provide written 60-day prior notice of any change in ownership.
The final version of the application is expected to be released in the next few weeks.
If you have questions about the above or about other aspects of Health Care Reform, please go to www.cbiz.com/ healthquestion and complete our Ask the Expert form.
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