Health Care Reform: Update on Early Retiree Reinsurance Subsidy

1. Health Care Reform: Update on Early Retiree Reinsurance Subsidy

2. Health Care Reform: Early Retiree Reinsurance Subsidy • Legislation • Program Requirements • Qualifying Benefit Plans • Support for the Application Process • Support for the Claims Reporting Process • Q&A

3. Legislation Overview • The Early Retiree Reinsurance Subsidy provides $5 billion to employers to help them maintain health coverage for early retirees ages 55-64, their spouses, surviving spouses and dependents • Applications will be available from the Department of Health and Human Services in June (exact timeline not yet determined) and will be processed on first-come, first-served basis • The program will end on January 1, 2014, or when the $5 billion runs out, whichever comes first • Qualifying Employer Benefit Plans • Fully insured and self-insured groups, regardless of size, including plans sponsored by • private entities • state and local governments • non-profits • religious entities • unions

4. Requirements to Participate • To participate in the retiree reinsurance program, the sponsor’s employment-based plan must: • Be certified by the secretary of HHS • Have programs in place that have generated or have the potential to generate cost savings for chronic and high-cost conditions • Have a written agreement in place with its health insurance issuer or plan to ensure any personal health information disclosure required to meet the program’s specifications meets HIPAA guidelines • Attest that policies and procedures are in place to protect against fraud, waste and abuse under the plan

5. Qualifying Reimbursable Costs • Plan sponsors (employers) can submit for reimbursement of payments for: • Medical, surgical, hospital services (including mental health) • Prescription drug costs • Member cost-share payments (copays, coinsurance, deductible) • Other benefits that may be specified by the secretary of HHS • Eligible expenses do not include those for “excepted benefits” under HIPAA, which would include long-term care benefits, as well as stand-alone dental and vision plans • For fully insured plans, premiums are not eligible for reimbursement • Reimbursement will be made at 80% of cumulative claims between $15,000 and $90,000 per member in a given plan year

6. Use of Reimbursement Funds • Funds must be used to lower overall health costs for enrollees • HHS encourages plan sponsors (employers) to use their reimbursement under the program for both of the following purposes: • To reduce the plan sponsor’s health benefit premiums or health benefit costs • To reduce health benefit premium contributions, copayments, deductibles, coinsurance or other out-of-pocket costs, or any combination of these costs, for plan participants • Reimbursement cannot be used as general revenue for the plan sponsor (employer)

7. Application and Claims submission • The plan sponsor (employer) will submit an application for each plan • Application will be available directly from HHS sometime in June • Plan will submit application directly to HHS • Applications will be processed in the order received by HHS • Details about information to be submitted with the application is included in the FAQs • An application must be approved by the secretary of HHS before an plan sponsor (employer) may request reimbursement under the program. • Claims must be incurred and paid before submission and reimbursement payment is made to the plan sponsor (employer) • Claims data must include: • Health benefit provided • Provider or supplier • Incurred date • Individual for whom benefit was provided • Date and amount of payment minus any known price concessions • Negotiated price concessions must be deducted from claims expense before submission

8. Support for the Application Process • We will assist with appropriate reporting and information required for the application and claims submission process • Data for use in projecting the estimated reimbursement amounts for the first 2 plan-year cycles in the application • Data to complete the application – submit as soon as possible • Ongoing data to submit claims eligible for reimbursement under Early Retiree Reinsurance Subsidy • Information about programs we administer that generate savings for participants with chronic and high-cost conditions • Information about policies and procedures we administer to detect fraud, waste and abuse

9. Support for the Claims Reporting Process • We will generate claims reimbursement reports for clients, in accordance with specifications defined by HHS, and provide them to the client or designated third-party recipient • If clients choose to include member cost-share in their reimbursement reports, clients will need to collect and submit the prima facie evidence, as required by HHS • client will be responsible for submission to HHS • If clients contract for pharmacy through us, we will include Rx claims with medical claims in one consolidated report • Clients may be required to sign our PHI form to receive claims reporting

10. Be Prepared to Submit your Application Quickly • Gather all necessary information for the application, as outlined in the Interim Rule (Section 149.40) • Prepare a summary indicating how you will use any reimbursement received under the program to meet the requirements of the program • Prepare a list of all benefit options under the plan for which reimbursement may be claimed • To assist with long-term cost reporting, clients should name the benefit options in accordance with our benefit naming convention (i.e., PPO 25, BlueCare 2000)

11. Summary • The Early Retiree Reinsurance Program provides $5 billion to plan sponsors (employers) to help them maintain health coverage for early retirees ages 55-64 who are not active employees or eligible for Medicare, and their spouses, surviving spouses and dependents, regardless of age or Medicare eligibility • Applications will be available from HHS and will be submitted by the client directly to HHS • Applications will be processed on a first-come, first-served basis • All plan sponsors (except federal) are eligible, regardless of size • We will assist with appropriate reporting and information required for the application and claims submission process • Gather information now for a quicker submission when the application comes available