Update: Interim Final Regulations Implementing Early Retiree Reinsurance Program Issued
Erek M. Sharp
As a follow-up to our earlier post describing the early retiree health coverage reinsurance program established under the Pension Protection and Affordable Care Act (“PPACA”), please note that on May 4, 2010 the Department of Health and Human Services issued interim final regulations implementing the program and providing some of the guidance we had been anticipating. It is now expected that the reimbursement program will be formally established by June 1, 2010 (in advance of the June 21, 2010 deadline imposed under the PPACA) and applications to participate in the program should be available by the end of June. As described in our prior post, the program expires on January 1, 2014.
The newly-issued regulations provide guidance with respect to a number of areas within the reinsurance program, including without limitation:
- defining or expanding upon the current definition of certain key terms under the program, such as “chronic and high-cost condition” and “health benefits”
- interpreting PPACA’s requirement that a plan seeking reimbursement have in place programs and procedures intended to generate cost-savings with respect to participants with chronic and high-cost conditions
- providing details specific to the pre-claim application procedure and the submission of claims, including how an application is made and a plan sponsor certified, and what information is required to be included in a plan sponsor’s application for certification and claim(s) for reimbursement
- explaining the applicable reimbursement formula, and how the $15,000 “cost threshold” and $90,000 “cost limit” amounts are calculated for purposes of determining program eligibility
- clarifying that the reimbursement amount is based solely on claims incurred on and after June 1, 2010 (though claims incurred prior to June 1 may count toward the cost threshold and limit)
- explaining the appeals procedure for denied claims
- describing the notification requirements if the plan sponsor undergoes a change in ownership
The above list provides only a general description of some of the larger issues addressed in the regulations. As there are many complex issues and specific details involved with these regulations, we recommend that employers consult with counsel to ensure compliance with the PPACA.