Frequently Asked QuestionsEarly Retiree Reinsurance Program
1. What impact does the law have on early retirees?
The health care law includes a temporary early retiree reinsurance program that is providing $5 billion in temporary financial aid to encourage employers and other plan sponsors to continue to provide health coverage to certain early retirees, their eligible spouses, surviving spouses, and dependents. As part of this provision, the federal government started reimbursing employer-based programs for 80 percent of retiree health care claims between $15,000 and $90,000. Early retirees are defined as persons age 55 or older who are non-active employees and are ineligible for Medicare. This provision was designed to encourage employers to continue to provide this type of coverage until 2014, when the health insurance marketplaces open.
2. What is the status of this program?
There was only a limited amount of money available for this program. Due to the volume of applications, the Department of Health and Human Services stopped accepting applications for the program on May 5, 2011. Only those employers who submitted applications prior to that time are eligible for reimbursement under this program.