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May 13, 2010 By Jim van Iwaarden 4 Comments

Update: the retiree health reinsurance gold rush

Last week, the HHS published an interim final rule for the new Early Retiree Reinsurance Program (should we call it ERRP?).

In our first post on this, we noted that a lot was still unknown.  There still is, but it’s becoming clearer.

The White House fact sheet says “Employers can use the savings to either reduce their own health care costs, provide premium relief to their workers and families or a combination of both”.  But §149.40 of the rules says that the application must also specify “How the sponsor will use the reimbursement to maintain its level of contribution to the applicable plan”.

I’ve had a tough time reconciling those two, but the HHS helps us out:  “For example, for a sponsor that pays a premium to an insurer, if the premium increases, program funds may be used to pay the sponsor’s share of the premium increase from year to year, which reduces the sponsor’s premium
costs.”  For big plans, that premium increase can be a lot of money.

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Filed Under: Early Retiree Reimbursement Program (ERRP), FAS 106, GASB 45, Other post-employment benefits (OPEB), Public plans Tagged With: early retiree reinsurance program, ERRP, GASB 45, health care reform, retiree medical

Previous Post: « Off-Year GASB 45 Accounting
Next Post: Passing the §401(a)(26) “meaningful benefit” test »

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  1. Preparing to Apply for the ERRP Subsidy « The VIA retirement plan blog says:
    June 9, 2010 at 8:05 am

    […] Program (ERRP): the first one gave a quick overview of the amount of funds available, while the second post described options for spending the reimbursement. In this post, I’d like to give a quick overview […]

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  2. ERRP Website Update « The VIA retirement plan blog says:
    September 17, 2010 at 7:51 am

    […] busy gearing up for the implementation of the ERRP. As you may recall from our earlier posts (1, 2, 3), this is a program that’s part of the larger healthcare reform bill and is intended to […]

    Log in to Reply
  3. ERRP Reimbursement and Website Update « The VIA retirement plan blog says:
    September 17, 2010 at 7:54 am

    […] busy gearing up for the implementation of the ERRP. As you may recall from our earlier posts (1, 2, 3), this is a program that’s part of the larger healthcare reform bill and is intended to […]

    Log in to Reply
  4. ERRP funds are going fast, but employers still have time to act « The VIA retirement plan blog says:
    January 19, 2011 at 2:57 pm

    […] been watching the ERRP since its inception (posts 1, 2, 3, 4), and didn’t think the $5 billion allocation would last long. A July 2010 EBRI article […]

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