City Council September 6, 2011 ERRP Presentation


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City Council September 6, 2011 ERRP Presentation

  1. 1. Early Retiree Reinsurance Program Update September 6, 2011
  2. 2. What is ERRP? <ul><li>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 </li></ul><ul><li>June 21, 2010 and will end no later than January 2014 or when funds are exhausted. </li></ul><ul><li>This provision addresses the recent erosion in the number of employers providing health insurance to early retirees. </li></ul><ul><li>The program provides needed financial help for employer based plans to continue to provide coverage to plan participants and provides financial relief to participants. </li></ul>
  3. 3. ERRP Application & Training <ul><li>Human Resources submitted an application to the HHS in July 2010 and was approved on </li></ul><ul><li>August 31, 2010. </li></ul><ul><li>Online training was held by in </li></ul><ul><li>October and November 2010. </li></ul><ul><li>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. </li></ul>
  4. 4. How Does ERRP Work? <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>Original numbers showed 184 eligible participants in 2010 and 190 eligible participants in 2011. </li></ul>
  5. 5. ERRP Estimates <ul><li>If claims mirror those filed in 2009, then reimbursement estimates from BC/BS range: </li></ul><ul><li>In Year 1 : </li></ul><ul><li>Low = $91,217 Expected = $307,484 High = $383,915 </li></ul><ul><li>In Year 2 : </li></ul><ul><li>Low = $102,619 Expected = $345,920 High = $431,904 </li></ul>
  6. 6. HHS Rules <ul><li>According to the HHS rules, the ERRP funds must be used for both of the following: </li></ul><ul><li>To reduce the employer’s premium or health benefit costs, </li></ul><ul><li>AND </li></ul><ul><li>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. </li></ul>
  7. 7. Current Status <ul><li>August 17, 2011 – BC/BS requested additional information following HHS changes to reporting. </li></ul><ul><li>August 24, 2011 – Edited lists were returned to BC/BS for final review. </li></ul><ul><li>September 2, 2011 – Awaiting final list returned from BC/BS to upload to ERRP website and seek ERRP final approval. </li></ul>
  8. 8. Future Council Meeting <ul><li>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. </li></ul>