From Issue 4 of Ceridian Health Care Compass May 7, 2010

Employers will need to apply; forms expected to be available next month

Interim final guidance has been issued regarding the Early Retiree Reinsurance Program for certified plan sponsors that provide health insurance coverage to retirees age 55 and older who are not eligible for Medicare.

The program is expected to be established by June 1, 2010, and will expire January 1, 2014, unless the program's $5 billion in funding is depleted sooner.

The purpose of the program is to provide needed financial help for employment-based plans to continue providing coverage to early retirees and plan participants.

The program will reimburse plan sponsors for 80 percent of retiree claims between $15,000 and $90,000 that are paid or incurred after June 1, 2010.

In order to be eligible for the program, plans must have procedures in place to generate savings for participants with chronic conditions -- those high-cost conditions for which $15,000 or more in claims are likely to be incurred during a plan year. Reimbursements may be used to pay for increases in the plan sponsor's share of the premium or other increase in plan costs.

A new Web portal, to be introduced by July 1, 2010 (see Web portal to provide information on insurance options ) will provide information on the program, including instructions on how to participate.

Employers will need to submit an application to the Health and Human Services Department to participate in the program. Applications will be approved in the order in which they are received, and must be approved before any claims may be filed for reimbursement.

Reimbursement of claims is conditional upon the availability of program funds, so plan sponsors should submit applications as soon as possible once forms become available, which is expected to be in June.