Early Retirees Health Insurance Program Approved
Posted on Tue, Aug 31, 2010
Today, about 2,000 organizations, ranging from small and large companies, educational institutions, unions, nonprofit organizations and local governments have received acceptance into a program that reimburses employee claims beginning this fall.
The Early Retiree Reinsurance Program was created by Healthcare Reform, and is meant to be a bridge between now and 2014, which is the date that medical insurance exchanges will be in effect. This program offers $5 billion to unions and employers to assist them in maintaining insurance coverage for retirees that retire early at age 55 or older, that aren't qualified for Medicare yet. These 2000 employers will get reimbursed for early retirees' health claims for themselves and their spouses, dependents, and surviving spouses.
This new program will lessen the cost of businesses' medical insurance costs for many retirees. The high cost of medical care has prohibited employers from providing affordable medical insurance for their retirees and employees, while still being competitive in their field. In 1988, 66% of large employers provided employees with retiree medical coverage; whereas in 2009, just 29% of large employers provided these benefits. Medical insurance costs for older employees and retirees are more than 4 times more costly than they're for younger employees. Likewise, the deductibles they pay is about 4 times higher than a company sponsored plan.
More applications for the next round of approvals are being reviewed each day. Beginning in September, applicants that have been approved in this first batch of approvals will be able to submit their claims that are dated back from the 1st of June, 2010. Then, beginning in October, reinsurance payments will begin to be dispersed to applicants that have been approved.