City Council September 6, 2011 ERRP Presentation
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City Council September 6, 2011 ERRP Presentation






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City Council September 6, 2011 ERRP Presentation City Council September 6, 2011 ERRP Presentation Presentation Transcript

  • Early Retiree Reinsurance Program Update September 6, 2011
  • What is ERRP?
    • Included in the health insurance reform law is a provision that establishes the temporary Early Retiree Reinsurance Program (ERRP) through the Department of Health and Human Services (HHS). The program was launched
    • June 21, 2010 and will end no later than January 2014 or when funds are exhausted.
    • This provision addresses the recent erosion in the number of employers providing health insurance to early retirees.
    • The program provides needed financial help for employer based plans to continue to provide coverage to plan participants and provides financial relief to participants.
  • ERRP Application & Training
    • Human Resources submitted an application to the HHS in July 2010 and was approved on
    • August 31, 2010.
    • Online training was held by in
    • October and November 2010.
    • After open enrollment in December 2010, HR started working with BC/BS to retrieve the necessary data. In May 2011 a contract was signed with BC/BS to administer the ERRP program for the City.
  • How Does ERRP Work?
    • The ERRP will reimburse plans 80% for certain individual claims that reach the “cost threshold” of $15,000 and are under the “cost limit” of $90,000.
    • Eligible claims by early retirees (those age 55 but not yet eligible for Medicare) must be for chronic and high-cost conditions for which $15,000 or more in health benefit claims are likely to be incurred during a plan year by one participant.
    • Original numbers showed 184 eligible participants in 2010 and 190 eligible participants in 2011.
  • ERRP Estimates
    • If claims mirror those filed in 2009, then reimbursement estimates from BC/BS range:
    • In Year 1 :
    • Low = $91,217 Expected = $307,484 High = $383,915
    • In Year 2 :
    • Low = $102,619 Expected = $345,920 High = $431,904
  • HHS Rules
    • According to the HHS rules, the ERRP funds must be used for both of the following:
    • To reduce the employer’s premium or health benefit costs,
    • AND
    • To reduce health benefit premium contributions, co-payments, deductibles, coinsurance or other out-of-pocket costs, or any combination of these costs, for plan participants.
  • Current Status
    • August 17, 2011 – BC/BS requested additional information following HHS changes to reporting.
    • August 24, 2011 – Edited lists were returned to BC/BS for final review.
    • September 2, 2011 – Awaiting final list returned from BC/BS to upload to ERRP website and seek ERRP final approval.
  • Future Council Meeting
    • Once claims are processed by ERRP and the City receives funds, Human Resources will present the checks to the City Council and seek direction on the use of the funds.