HHS to Stop Processing ERRP Applications Due to Fund Exhaustion

delay2.JPGThe Affordable Care Act’s Early Retiree Reinsurance Program (ERRP) is coming to an end sooner than anticipated. According to a notice (pdf) to be published in the April 5 edition of the Federal Register, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) will stop processing ERRP applications on May 5, 2011. Created under the new health reform law, the ERRP provides $5 billion in temporary financial help for employer health plans that continue to provide health coverage to “early retirees,” defined as individuals age 55 and older who are neither active employees nor eligible for Medicare, and to the early retirees’ spouses, surviving spouses, and dependents. Under the plan, the HHS will reimburse plan sponsors for certain claims between $15,000 and $90,000. The program began on June 1, 2010, and was scheduled to terminate on January 1, 2014, or whenever the $5 billion has been exhausted, whichever date is earlier. Due to the popularity of the program, all $5 billion of the allocated funds is expected to be dispersed soon. As stated in the Federal Register notice, the agency has “projected the availability of program funding based on the rate at which appropriated funds are currently being used to reimburse plan sponsors, and we have concluded that we have approved a sufficient number of applications to exhaust the program funding.”

According to a CMS memo (pdf) issued to staff members, the program has provided more than 1,300 employers nationwide with nearly $1.8 billion in reimbursements.

Photo credit: NobbyZ

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