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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: The ERISA Industry Committee (ERIC) has submitted comments on interim final regulations implementing the Early Retiree Reinsurance Program under the Patient Protection and Affordable Care Act.
The Early Retiree Reinsurance Program, a temporary program set to commence on June 21, 2010, is intended to encourage companies to provide health care for pre-Medicare eligible retirees aged 55 to 64 and their dependents by reimbursing employment-based plans for a portion of the cost of health benefits for these individuals.
ERIC’s letter expresses concern with the approach to reimbursement specified in the interim final regulation because such a method could result in much of the $5 billion available for the program being allocated to only a few large funds.
“Under this scenario, only those funds and their plan participants that are fortunate enough to be at the very front of the application queue might benefit in the ERRP largesse; this would leave other retiree plans to struggle alone to meet the rising costs of health care, unaided by the federal funds which had been appropriated for this purpose,” said Mark Ugoretz, president of ERIC.
ERIC’s letter contends that the process for determining who will ultimately be allowed to receive ERRP funds is not clear. “The principle of ‘first-come, first served’ places a premium on being 'first in line' to file an application, yet the process for determining the ‘first in line’ does not seem to be objectively measurable or transparent,” Mr. Ugoretz explains.
ERIC urges an approach in which all companies that file a complete application within a certain period of time (for example, two days, two weeks, or even two months); be permitted to participate in the program and ultimately to be capable of being reimbursed for claims. “Within this pool of applicants, reimbursements could be apportioned on a pro rata basis, perhaps one where all retiree claims filed in each claims reimbursement period were comparably reimbursed until the $5 billion in funding were exhausted,” the letter said.
ERIC also urges that receipt of reinsurance program claims reimbursements should not impose an unreasonable “maintenance of effort” requirement on employers. The letter warns that “ERIC members have expressed significant concerns both with respect to how the Early Retiree Reinsurance Program maintenance of effort provision will be applied as well as the period of time that employers could be subject to the requirement.”
ERIC contends that the statutory prohibition on using reinsurance program funds to augment general revenue to the plan sponsor should not be narrowly interpreted to require a maintenance of effort requirement based on a zero reduction in the actual dollar amount of employer health care spending from one year to the next. “A maintenance of effort rule, and particularly one evaluated only in straight dollar terms, is needlessly restrictive,” the letter said.
Among ERIC’s other suggestions are these:
• any maintenance of effort provision adopted in compliance with the regulation should have a finite ending date and should extend no longer than employers have unused ERRP funds;
• administrative costs should be eligible for reimbursement; and
• the requirement that a plan sponsor produce proof that a retiree has paid his or her portion of a claim should be dropped.
For more information, visit http://www.eric.org.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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