Coverage Programs banner

Home > Coverage Programs > HealthTrust > BA Resources >
Healthcare Reform > Early Retiree Reinsurance Program

Early Retiree Reinsurance Program

As outlined in an email sent May 14, 2010 to LGC HealthTrust groups that offer medical coverage, the Patient Protection and Affordable Care Act (ACA) established the Early Retiree Reinsurance Program (Program). The Program includes a reinsurance subsidy for employer sponsors of group health plans (Plan Sponsors) that provide medical coverage to early retirees (age 55 to Medicare eligibility) and their covered spouses, surviving spouses and dependents.

We have obtained a draft of the U.S. Department of Health and Human Services “HHS) Early Retiree Reinsurance Program Application (PDF). However, HHS guidance for its completion is still outstanding. Please click on the following links to access related information:

While submission of the application is your responsibility, it is our intent to submit claims data directly to HHS on your behalf.

NOTE: LGC’s fees for claims submission associated with the Program are in place for the initial two plan years for which a member is applying for Program reimbursement. For January renewal groups, the fee applies with respect to claims incurred through December 31, 2011. For July renewal groups, Program services will be performed with respect to claims incurred through June 30, 2011.

Early Retiree Reinsurance Program Application with Guidelines

It is our understanding that there may be an interim period between the release of the Early Retiree Reinsurance Program Application (PDF) and the date of submission; however, since final regulations have not been released, we encourage you to begin compiling your information now. Applications will be submitted directly to HHS but also must be approved by HHS in order to be eligible for reimbursement. It is important that you submit the required information with your application to ensure approval. As time is of the essence, we suggest that you compile all the information required within the application as soon as possible and recommend that you complete the application immediately upon its release.

Early Retiree Reinsurance Program Application Outline

PART I: Plan Sponsor and Key Personnel Information
This section references specific identifying information relative to your group. School Administrative Units (SAU) should provide the name and Federal Employer Tax Identification Number (EIN) associated with the SAU Office as claims data will only be provided in the aggregate. The Application requires identification of two separate individuals within your group with responsibility for submission — an Authorized Representative and the Account Manager. Identify these individuals now.

PART II: Plan Information
This section addresses plan information specific to your group. We suggest that you begin compiling the information requested in this section immediately. Utilize the Organization Name that you indicated in Part I as the Plan Name followed by “Group Health Plan” (e.g., SAU #29 Group Health Plan).

Benefit Option Name & Unique Benefit Option Identifier
For the Benefit Option Name and Unique Benefit Option Identifier (UBOI) referenced in Part II, utilize the Coverage codes and Carrier Group Numbers located on your Carrier ID table (e.g., BC3T10-RX10/20/30, 340006005). The Benefits Administrator for your group should have a copy of this document. You can only list one benefit option and its associated Carrier Group Number in Part II, B. The remaining benefit options and Carrier Group Numbers can be provided on the last page of the application; however, you must list each benefit option and its associated Carrier Group Number separately in the table format that is provided. Be sure to only include those benefit options that are available to your early retirees; Medicomp (MC3) and Medicomp without prescription plans (MCNRX) do not apply.

Chronic and High-Cost Conditions
For submission with your application, please download these PDFs on Anthem Blue Cross and Blue Shield Chronic Disease Management, CVS Caremark Chronic Disease Management and New Hampshire Local Government Center’s (LGC) Chronic Disease Management programs. These documents can serve as the response to Part II, C “Programs and Procedures for Chronic and High-Cost Conditions.”

Estimated Amount of Reimbursements
The LGC is suggesting that members utilize a projected reimbursement amount of approximately $3,800 for each qualified early retiree. January and July members will each utilize a different percentage factor of this amount based on the number of months eligible for reimbursement. Further guidance for completing this section is noted in red on the Early Retiree Reinsurance Program Application (PDF).

Intended Use of Reimbursements
The regulations specify that the proceeds under this program must be used to reduce:

NOTE: Proceeds under this program must not be used as general revenue for the Plan Sponsor; severe penalties will result from improper use of program reimbursements. LGC cannot provide you with the wording for this answer; therefore, you must identify your own intended use for reimbursements. We encourage you to begin developing your response as soon as possible as we believe this will be an important part of the application approval process.

PART III: Banking Information
It is our understanding that Plan Sponsors will be required to accept electronic fund transfers for program reimbursements. You will need to have this capability in place prior to submission of your application.

PART IV: Plan Sponsor Agreement
The legislation requires an assurance that you have a written agreement with LGC regarding claims and other information being disclosed for participation in the Program. The LGC is requiring a fee for assistance with this Program and the ongoing submission of claims on your behalf. These fees are identified in section 4 of the Services Agreement that was emailed on May 18, 2010 to LGC member groups which provide medical coverage. The fees will be waived if you do not have claims eligible for reimbursement or if HHS denies your Application. In order to submit claims on your behalf, the Services Agreement must be completed, signed and returned to LGC prior to claims submission. Due to the complexity associated with the claims data, we are unable to provide you with the specific amount of claims, if any, that may be eligible for reimbursement.

Policies and Procedures to Detect Fraud, Waste and Abuse

You can download (as PDFs) Anthem Blue Cross and Blue Shield's fraud and abuse policies and CVS Caremark Standard Audit Practice information. You do not need to include these documents with your application but should retain them for your records in case you are required to produce them.

It is imperative that employers interested in submitting an application begin compiling the information outlined above. As communicated, applications must be approved by HHS; incomplete applications will be dismissed. It is our understanding that reimbursements will be provided on a first-come first-serve basis, so timeliness is essential.

For related questions or concerns, please email LGC’s Member Services Department, call 800.852.3358 or contact your LGC Member Relations Advisor directly.