Preparing for the Early Retiree Reinsurance Program: A Checklist


The Department of Health and Human Services (HHS) has issued an interim final rule implementing the Early Retiree Reinsurance Program established under the Patient Protection and Affordable Care Act (PPACA) that permits sponsors of retiree medical plans to obtain government reimbursements for certain early retirees’ benefits. This regulation, which provides for a 30-day comment period ending June 4, 2010, amends title 45 of the Code of Federal Regulations (CFR) Subtitle A, Subchapter B, by adding a new part 149 that describes the requirements for participation in the Program, the methods for reimbursement, procedures for appeals, and certain plan sponsor notice requirements prior to a change in ownership. The White House has also issued a fact sheet regarding the Program.

While the Program provides an opportunity to reduce certain retiree medical costs, the application, submission, and reporting requirements will involve a considerable amount of administrative effort and programming. In addition, the amount available for the Program is expected to be far less than the amounts eligible for reimbursement since plans maintained by state and local governments will be eligible, as well as private employer plans and multiemployer plans. Thus, prior to the June 1, 2010, effective date and the opening of the application process later in June, plan sponsors should weigh the potential benefits associated with participation in the Program against the administrative obligations of the application and submission process.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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