PPACA Retiree Health Benefits Program Described

Insuring Resources Commentary:
Early retirement produces a serious gap in health insurance coverage for many, many baby boomers as they await later Medicare eligibility. As health insurance premiums have risen fewer employers are providing retiree access to health insurance.

Within the PPACA an interim measure was put in place before the Health Insurance Exchanges get active to aide those retirees of pre-Medicare age access health insurance. This article below describes the federal rules and the funding provided to employers. As I've noted in previous posts, the devil will be in the details as to how this program is implemented.

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Source: Keith Martin- http://ifawebnews.com
5/5/2010
The White House has announced the allocation of $5 billion for a temporary program to make it easier for employers to provide health coverage for early retirees.

The U.S. Department of Health and Human Services issued regulations to establish the Early Retiree Reinsurance Program, a part of the recently signed Patient Protection and Affordable Care Act.

In a statement, HHS Secretary Kathleen Sebelius said rising costs “have made it hard for employers to provide quality, affordable health insurance for workers and retirees.

“As a result, many Americans who retire before they are eligible for Medicare are worried about losing health insurance coverage through their former employers, putting them at risk of losing their life savings due to medical costs, “ she said. “This new program will provide much-needed relief so that employers can provide more retirees with quality, affordable insurance, starting this year.”

According to the White House, the percentage of large firms providing workers with retiree coverage has dropped from 66% in 1988 to 31% in 2008. New reform law includes the $5 billion in financial aid to employers to maintain coverage for early retirees age 55 and older who do not yet qualify for Medicare.

The temporary program, similar to a high-risk pool for uninsured Americans, will end in 2014 when health insurance exchanges should get established. Those exchanges will provide additional coverage options.

Sebelius’ agency said eligible employers can apply for the program beginning at the end of June. Applicants can be from both self-funded and insured plans, including plans sponsored by private entities, state and local governments, nonprofits, religious entities, unions and other employers, according to HSS officials.

Health benefits that qualify for relief include medical, surgical, hospital, prescription drug and other benefits that may be specified by HSS, as well as coverage for mental health services.

The White House said the amount of the reimbursement to the employer plan is up to 80% of claims costs for health benefits between $15,000 and $90,000. Claims incurred between the start of the plan year – often Jan. 1 – and June 1 are credited toward the $15,000 threshold for reimbursement.

However, only medical expenses incurred after June 1, 2010, are eligible for reimbursement under this program, according to officials.

As an example, they noted that if an individual incurs costs of $30,000 between the start of the plan year and June 1, and $40,000 after that date, the amount which may be reimbursed is $40,000 – the costs above the $15,000 threshold that occur after June 1.