The Department of Health and Human Services last week released the application that employers can use to apply for assistance from the Early Retiree Reinsurance Program (part of the Patient Protection And Affordable Care Act). The government has designated $5 billion to be used to help businesses pay for health care for early retirees who are at least 55 but not yet eligible for Medicare. An FAQ page on the HHS website will be helpful to employers who are looking for more details.
It’s important to note that the Early Retiree Reinsurance Program is not designed to be used directly by early retirees themselves. The application has to be completed by the health plan sponsor (not the retiree), and the idea behind the program is to encourage employers to provide retiree health benefits, as the number who do so has fallen sharply over the last couple decades.
One concern about the program is that the money designated for it may not be enough to last until 2014 when the program is scheduled to end. This was a concern raised about the program to expand high risk pool coverage too, and is likely to be an issue with many of the aspects of health care reform. But for now, in the first month of the Early Retiree Reinsurance Program, there should be lots of incentive for employers to get their applications submitted to HHS.
There are an estimated 62,700 people in Colorado who retired before they were eligible for Medicare and are receiving retiree health care benefits from their former employers. Their employers can now apply for financial assistance to help cover the cost of health care for their early retirees, and the financial assistance can be passed along to the retirees in the form of lower health care costs.