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Benefits September 1, 2010
Employers from All Sectors Applying for Subsidy for Early Retiree Benefits
September 1, 2010 (PLANSPONSOR.com) - The Department of Health and Human Services has announced the first round of nearly 2,000 applications for the Early Retiree Reinsurance Reinsurance Program that have been approved.
Reported by Rebecca Moore
Applications from every State and the District of Columbia have been approved. Starting in September, approved applicants can begin submitting claims dating back to June 1, 2010, and starting in October, they will begin to receive reinsurance payments on those claims.
HHS said the approved applications represent nearly every sector of the economy: 32% of applications came from businesses, 26% from State and local governments, 22% from union sponsors, 14% from schools and other educational institutions, and 5% from non-profits.
The program reimburses plan sponsors for 80% of the medical claims costs between $15,000 and $90,000 for early retirees ages 55-64 (see What Are the Implications of the Early Retiree Reinsurance Program?).
An analysis by the Employee Benefit Research Institute (EBRI) indicates the $5 billion set aside to fund the program will only last for two years (see EBRI Sees Retiree Health Coverage Subsidy Cash Depletion). The program will be available through the earlier of January 1, 2014, or the date when the funds are exhausted.
A listing of the companies that have been approved is at http://www.healthcare.gov/news/factsheets/early_retiree_reinsurance_program.html.