Early retiree reinsurance program takes shape

The Department of Health and Human Services (HHS) has issued interim final rules explaining the soon-to-be-launched Early Retiree Reinsurance program (75 Fed Reg 24450, May 5, 2010). Under the program, created by the Patient Protection and Affordable Care Act (HR 3590, P.L. 111-148), the government has made available $5 billion to reimburse early retiree medical plans for up to 80 percent of claims between $15,000 and $90,000. In order to be eligible for the program, a plan covering early retirees (age 55 or older, but not eligible for Medicare) must have a program in place designed to generate cost savings with respect to participants with chronic and high-cost conditions.  Chronic and high-cost conditions are those that are likely to generate claims of $15,000 or more per year for a single participant. The plan must also ensure that it has policies and procedures in place to protect against fraud, waste and abuse, and must make its records and data available for audit by the Secretary of HHS. The data necessary for the program and in the course of an audit is protected health information (PHI) under the HIPAA privacy rules, so the employer, as plan sponsor, must implement a written agreement with the plan or the health insurance carrier to ensure that data is accessible to the Secretary in compliance with HIPAA.  Applications for reimbursement of claims should be available by the end of June. For more information, contact your health plan advisor.