Frequently Asked Questions

The new health reform law provides $5 billion in financial relief in the form of reinsurance for employers who offer coverage for early retirees beginning in 2010. Employers have been at a competitive disadvantage as they struggled to maintain health coverage for their workers and retirees while remaining profitable and balancing budgets in the public sector. The Early Retiree Reinsurance Program allows employers who currently sponsor retiree coverage to access federal reinsurance for high cost claims, thereby reducing the overall cost of retiree coverage.

Who is eligible? Employers with early retirees who are 55 years old or older and are not eligible yet for Medicare can access financial assistance for their health coverage. Any employer or multi-employer benefit trust can apply, whether they are self-insured or purchase their plan from an insurer--including private companies, state and local governments, nonprofits, religious organizations, unions, and other employers.

How can the program be used? Employers will be reimbursed for medical claims for retirees who are 55 years or older, their spouses, surviving spouses and dependents. Employers will be able to use the savings realized from the Reinsurance Program to reduce their health care costs, to decrease health costs for their workers and families, or both.

How much of the retiree health expense will be reimbursable to the employer? The employer can be reimbursed for up to 80% of the costs of the health claims between $15,000 and $90,000. In 2010, only claims incurred after June 1 are eligible for reimbursement. Each individual beneficiary is considered separately--the company cannot add expenses of two or more individuals to meet the $15,000 threshold.

How can my employer apply for the Early Retiree Reinsurance Program? Beginning June 1, applications will be available for eligible employers through the Department of Health and Human Services. Employer plans must go through an application process that includes documentation, plans for implementation and programs to manage high cost conditions for patients.