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Health Care Reform Alert - Immediate Action Needed Under Retiree Reinsurance Program

Release Date: May 12, 2010

The Patient Protection and Affordable Care Act, the recently enacted health care reform law (see our Alert: www.jaeckle.com/EmployerHealthCareChallenges), establishes a federal subsidy for health plans that cover certain early retirees. Under the Early Retiree Reinsurance Program, a qualifying plan can receive a subsidy equal to 80% of its annual costs that are more than $15,000 but not more than $90,000 for a retiree. Only limited funds were allocated to the program and they will be disbursed on a ?first come first served? basis until exhausted, at which point the program will end. The available funds are expected to be substantially less than the amounts eligible for reimbursement. Sponsors of plans that cover early retirees should therefore take immediate steps to determine whether their plans could qualify for the subsidy and, if they could, prepare to apply for program certification beginning next month.

What should sponsors do?

A sponsor of a health plan that covers early retirees should immediately begin to analyze whether the plan has costs for which the reinsurance subsidy could be available. For insured plans, this will require working with the insurer, which may require a plan amendment and other actions in order to comply with the HIPAA privacy rule. If a sponsor determines that it could benefit from the subsidy, it should be prepared to submit an application as soon as HHS makes the application available, which is expected to occur next month (June 2010), and to submit claims for reimbursement as soon as the claim submission mechanism is up and running.

To read the rest of the alert, please click here.

If you have any questions about the retiree reinsurance program or any other aspect of health care reform, please contact Robert W. Patterson at 716.843.3910 or rpatterson@jaeckle.com, or Michele O. Heffernan at 716.843.3850 or mheffernan@jaeckle.com.

This Jaeckle Alert, prepared by the attorneys at Jaeckle Fleischmann & Mugel, LLP, is intended for general information purposes only and should not be considered legal advice or an opinion on specific facts. For more information on these issues, contact one of the attorneys listed above or your existing Firm contact. Prior results do not guarantee a similar outcome. The invitation to contact is not a solicitation for legal work in any jurisdiction in which the contacted attorney is not admitted to practice. Any attorney/client relationship must be confirmed in writing.