Reform Alert - News from the Blues' Office of National Health Reform

Early Retiree Reinsurance Program will exhaust its $5 billion allocation

Feb. 27, 2012

On Feb. 17, 2012, the Early Retiree Reinsurance Program announced it has received requests for reimbursement that surpass the $5 billion originally allocated to fund the program. The ERRP was a temporary program designed to stabilize the health care market by providing financial assistance to health plan sponsors that make coverage available to millions of early retirees and their families. The program was created to help employers maintain quality health coverage for retirees age 55 and older who are not eligible for Medicare.

Reimbursement requests that are received after the funding has been exhausted will be placed on hold in the order the requests are received. These requests will be held in case more funds become available when any overpayments previously given to plan sponsors are returned. To assess if any overpayments were made, the Centers for Medicare and Medicaid Services will begin an audit process. Those sponsors who are not using the funds according to the Affordable Care Act's requirements will be expected to return their funds to the agency. Below are some common questions in response to this announcement:

While CMS is estimating that the $5 billion has been depleted, when are the funds for reimbursement under the ERRP going to be exhausted completely?

A date is unknown at this time, but the Centers for Medicare and Medicaid Services will continue to disburse the reimbursement payments until all available funds are used. 

What should I do if I am a Plan Sponsor that recently submitted a reimbursement request?

You will be notified by an email from the ERRP explaining that reimbursement requests have been placed on hold, and future payments will depend on the availability of funds. These funds may become available when any overpayments that were previously made to plan sponsors are returned. 

If you receive this notification email from the ERRP, you can call the ERRP Contact Center at 1-877-574-ERRP (1-877-574-3777), or visit the ERRP website, to get the latest information on your position on the waitlist of held reimbursement requests. 

For those plan sponsors that have already received or will receive ERRP funds, is there anything I need to continue doing?

Yes. For each plan year that a sponsor has been reimbursed with ERRP funds, the sponsor must submit a full-replacement Claim List with no errors and an associated reimbursement request by April 27, 2012. If a submission of these two documents (an error-free Claim List and corresponding reimbursement request) is not completed, then Centers for Medicare and Medicaid Services will begin the process to collect the funds that had been previously paid to the plan sponsor.

Plan sponsors are also expected to use the ERRP funds they have received or will receive by Dec. 31, 2014.

What can all plan sponsors do in the meantime?

Plan sponsors should ensure the ERRP program has the sponsor's most up-to-date information for the following: 

  • Plan's responses to any application questions, 
  • Contact information for the Authorized Representative, Account Manager, and Designee, and 
  • Bank account information 

If a sponsor has found any inaccuracies or changes to previous application data, contact the ERRP Contact Center to find out how to correct this information. 

Where can I find more information?

For more details on the ERRP, go to the ERRP website. To find more information on payments made to plan sponsors in Michigan, read the latest ERRP Reimbursement Update report (PDF).

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.

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