Additional Guidance on ERRP as General Revenue Prohibition

The Centers for Medicare & Medicaid Services has posted additional guidance on what plan sponsors who use Early Retiree Reinsurance Program (ERRP) reimbursements to reduce health benefit premiums must do to comply with prohibition on using ERRP reimbursement as general revenue.

Document Excerpt 

This guidance is intended to give plan sponsors some flexibility in applying the maintenance of contribution requirement, while also helping to ensure that sponsors do not violate the prohibition against using ERRP reimbursement as general revenue. To the extent that a plan sponsor is unable to use the maintenance of contribution approaches set forth in this guidance, the sponsor may demonstrate compliance with this requirement in other ways. In such situations, the sponsor may be required, upon audit, to demonstrate how its approach is consistent with the statutory and regulatory requirements.

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