Early Retirees Retain Access to Employment-Based Healthcare Coverage

Healthcare reform sets aside $5 billion to help early retirees keep their coverage.  The Department of Health and Human Services has made available an application that employers must fill out so claims incurred by members of early retiree healthcare plans can receive reimbursement.  The Early Retiree Reinsurance Program lets the government pay employers for part of healthcare claims made by retirees who are 55 or over but not yet covered by Medicare.  The plan covers eligible dependents, no matter their age.  Once a participant in an early retiree plan has $15,000 in healthcare claims for one year, the government will pay plan sponsors for 80 percent of the claims or $90,000.

Congress appropriated $5 billion for the program as part of the healthcare reform law.  It is seen as a way to encourage employers to continue their early retiree healthcare plans until 2014 when many key provisions of the new law take effect.  In the future, part of the coverage will be provided by state pools where lower-income individuals can use federal health insurance premium subsidies to buy coverage.

“Until Americans have access to affordable insurance plans through health insurance exchanges in 2014, this program will make it easier for retirees and their families to maintain employment-based coverage,” according to Kathleen Sebelius, Department of Health and Human Services Secretary.

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