Must claims be both incurred and paid in order to count towards the cost threshold and cost limit, and be reimbursed?
Yes. The ERRP statute and regulations require that claims submitted under the program be based on the actual amount expended by the sponsor (and by the early retiree or spouse, surviving spouse, or dependent, if such amounts are being submitted to HHS). Further, the ERRP regulations state that “A claim may be submitted only if it… has been incurred during the applicable plan year, and has been paid.” 45 CFR ยง149.325. We interpret the statute and regulations to mean that claims must be incurred in the applicable plan year, and paid (but not necessarily during the plan year), in order for the costs to count towards the cost threshold and cost limit, and to be reimbursed.
Related Questions
- Do the $15,000 cost threshold and $90,000 cost limit apply separately to each individual for whom a plan sponsor is submitting reimbursement requests under the Early Retiree Reimbursement Program?
- Can the amount of claims reimbursed by a stop-loss insurer be submitted for credit towards the $15,000 cost threshold or reimbursement?
- Can costs for prescription drugs count toward the cost threshold and cost limit, and be reimbursed?
