[Federal Register Volume 77, Number 55 (Wednesday, March 21, 2012)]
[Notices]
[Page 16551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6728]



[[Page 16551]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-9996-N3]


Early Retiree Reinsurance Program

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice establishes a timeframe by which plan sponsors 
participating in the Early Retiree Reinsurance Program (ERRP) are 
expected to use ERRP reimbursement funds. Sponsors are expected to use 
such funds as soon as possible, but not later than December 31, 2014.

DATES: Effective Date: This notice is effective March 16, 2012.

FOR FURTHER INFORMATION CONTACT: David Mlawsky, (410) 786-6851.

SUPPLEMENTARY INFORMATION:

I. Background

    The Patient Protection and Affordable Care Act (Pub. L. 111-148, 
enacted on March 23, 2010) (the Affordable Care Act), included a 
provision that established the temporary Early Retiree Reinsurance 
Program (ERRP) which provides reimbursement to eligible sponsors of 
employment-based plans for a portion of the costs of providing health 
coverage to early retirees (and eligible spouses, surviving spouses, 
and dependents of such retirees), during the period beginning on the 
date on which the program is established, and ending on January 1, 
2014. Section 1102(a)(l) of the Affordable Care Act required the 
Secretary to establish the program within 90 days of enactment of the 
law (by June 21, 2010). In the May 5, 2010 Federal Register (75 FR 
24450), we published an interim final regulation with comment period, 
implementing the program as of June 1, 2010. Section 1102(e) of the 
Affordable Care Act appropriates funding of $5 billion for the 
temporary program.
    Consistent with section 1102(c)(4) of the Affordable Care Act, the 
rule at 45 CFR 149.200 states:

    A sponsor must use the proceeds under this program to--(1) 
reduce the sponsor's health benefit premiums or health benefit 
costs, (2) reduce health benefit premium contributions, copayments, 
deductibles, coinsurance, or other out-of-pocket costs, or any 
combination of these costs, for plan participants, or (3) reduce any 
combination of the costs in (a)(1) and (a)(2) of this section. 
Proceeds under this program must not be used as general revenue for 
the sponsor.

    We have published several guidance documents that further clarify 
this section of the rule (see the Guidance on Complying with the 
Prohibition on Using Early Retiree Reinsurance Program Reimbursements 
as General Revenue under the Regulations and Guidance section of 
www.errp.gov, and the Common Questions under the Use of Reimbursement 
section at www.errp.gov).
    We have provided the available ERRP funds to reimburse plan 
sponsors' eligible early retiree health care costs with the expectation 
that plan sponsors will use the funds in an allowable manner, as 
outlined in 45 CFR 149.200, as soon as possible after receiving ERRP 
funds. In February 2012, we released Common Question 800-13, which 
provided the date, December 31, 2014, by which plan sponsors are 
expected to use the received funds.

II. Provisions of This Notice

    Section 1102(c)(4) of the Affordable Care Act, immediately 
following its discussion of how ERRP reimbursements may be used, 
states: ``The Secretary shall develop a mechanism to monitor the 
appropriate use of such payments by such entities.'' We believe that 
one necessary component of such a mechanism is a deadline by when plan 
sponsors are expected to use ERRP reimbursements. Thus, one of the 
Common Questions we have published to clarify the ERRP rule at 45 CFR 
149.200 sets forth our expectation as to when a plan sponsor that has 
received ERRP reimbursement will use that reimbursement (Common 
Question 800-13). This notice reiterates and formalizes our expectation 
that a sponsor will use ERRP reimbursement funds as soon as possible, 
but not later than December 31, 2014. We believe this deadline is 
consistent with the January 1, 2014 statutory end date of the ERRP, and 
also affords plan sponsors the flexibility and time they may need in 
order to appropriately use ERRP reimbursement.
    Common Question 800-13 also states, and we reiterate in this 
notice, that a sponsor is not required to use ERRP reimbursement funds 
by the end of the plan year in which they are received. Sponsors may 
use ERRP reimbursement funds in a manner permitted under the statute, 
regulation, and other ERRP program guidance.

III. Collection of Information Requirements

    This document does not impose any new information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995. However, the information collection 
requirements associated with the ERRP are currently approved under OMB 
control number 0938-1087, with an expiration date of September 30, 
2014.

    Authority:  Sections 1102(a)(l) and 1102(c)(4) of the Affordable 
Care Act (42 U.S.C. 18002(a)(l) and(c)(4)).

    Dated: March 13, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2012-6728 Filed 3-16-12; 11:15 am]
BILLING CODE 4120-01-P