The Department of Health and Human Services announced today that nearly 2,000 employers and other organizations are eligible to receive crucial assistance to help them continue promised health coverage for early retirees, representing the first round of successful applications for the Early Retiree Reinsurance Program. Early retiree health plans for employers such as General Motors Co., General Electric Co., unions, state and local governments and universities are eligible for assistance contained in provisions of the new health reform law.
Health and Human Services Secretary Kathleen Sebelius conveyed the importance of the program:
According to the Associated Press, “As medical costs soared in the last 20 years, employers have dramatically scaled back retiree health coverage. The share of large companies providing the benefit dropped from 66 percent in 1988 to 29 percent last year.”
The Early Retiree Reinsurance Program will help maintain promised coverage of early retirees who are over 55, but not yet Medicare eligible, providing an important bridge to help control costs until health reform comes into full effect in 2014. Organizations eligible for the program will receive partial reimbursements for health care costs that rise between $15,000 and $90,000 for each individual in the plan. The reimbursements may be used to reduce premiums or hold down rising costs for employers.
The eligible employers represent a cross-section of the American economy – from Fortune 500 companies to small businesses, local governments, union health plans, nonprofits and educational institutions from every state and the District of Columbia. HHS says that more applications to participate in the program are pending and new applications will be accepted.
Health and Human Services Secretary Kathleen Sebelius conveyed the importance of the program:
“In these tough economic times, it is difficult for employers to keep up with skyrocketing health care costs for employees and retirees. Many Americans who retire before they are eligible for Medicare see their life savings disappear because of medical bills and exorbitant rates in the individual health insurance market… The Affordable Care Act’s Early Retiree Reinsurance Program will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all.”
According to the Associated Press, “As medical costs soared in the last 20 years, employers have dramatically scaled back retiree health coverage. The share of large companies providing the benefit dropped from 66 percent in 1988 to 29 percent last year.”
The Early Retiree Reinsurance Program will help maintain promised coverage of early retirees who are over 55, but not yet Medicare eligible, providing an important bridge to help control costs until health reform comes into full effect in 2014. Organizations eligible for the program will receive partial reimbursements for health care costs that rise between $15,000 and $90,000 for each individual in the plan. The reimbursements may be used to reduce premiums or hold down rising costs for employers.
The eligible employers represent a cross-section of the American economy – from Fortune 500 companies to small businesses, local governments, union health plans, nonprofits and educational institutions from every state and the District of Columbia. HHS says that more applications to participate in the program are pending and new applications will be accepted.
