(Reprinted from BCBSGA)
The Patient Protection and Affordable Care Act includes an early retiree reinsurance program that is available to group health plan sponsors who provide medical coverage to early retirees and their spouses, surviving spouses and dependents. It is intended to encourage employers to provide health coverage to early retirees until state health exchanges and federal subsidies for health coverage are implemented. This temporary program will provide $5 billion to help employers to continue to provide coverage to certain retirees. The program provides for reimbursement of an early retiree’s (and covered dependents’) health care claims in an amount equal to 80% of the costs between $15,000 and $90,000.
The employer is then expected to use the reimbursement to help lower health care costs (such as premium contributions, copays and deductibles) for participating enrollees. The program provides for reimbursement of an early retiree’s (and covered dependents’) claims in an amount equal to 80% of health benefits costs between $15,000 and $90,000.
This program is expected to be effective from June 1, 2010, to January 1, 2014. After January 1, 2014, retirees will have additional coverage options through the health insurance exchanges. Both self-insured and fully insured employer groups can participate. To participate in the program, employers must first submit applications (likely available beginning in June) to the Department of Health and Human Services.
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