Included in the Patient Protection and Affordable Care Act (H.R. 3590), approved by Congress and signed by President Obama on March 23, 2010, is a $5 billion early retiree reinsurance program that takes effect June 23, 2010 and terminates on January 1, 2014. Under this program, employer plans can receive up to 80% of costs, minus negotiated price concessions, for health benefits between $15,000 and $90,000 (adjusted in subsequent fiscal years based on the medical component of CPI). Proceeds must be used to lower health costs for enrollees (e.g. premium contributions, co-payments, deductibles, etc.). A Fact Sheet with a general overview of the program was posted by HHS Secretary Kathleen Sebelius to The White House Blog.
Eligible "early retirees" are defined as individuals age 55 and older who are neither active employees nor eligible for Medicare. Payments for spouses, surviving spouses and dependents of eligible early retirees are also eligible under the program. Reimbursable services include medical, surgical, hospital and prescription drug costs.
The program is available to self-funded and insured plans, including private employers, state and local governments, nonprofits, religious entities, unions, etc. To receive assistance, plans must document claims and implement programs and procedures to generate cost savings for participants with chronic and high-cost conditions. All plans will be subject to audits.
Applications for the program will be available in June under a process similar to that currently in place for the Retiree Drug Subsidy (RDS) program.
As always, please contact us with any questions.
