PPACA’s Early Retiree Program Off to Strong Start
|September 9, 2010||Posted by Kandis Driscoll under Blog||
The Patient Protection and Affordable Care Act (PPACA) includes $5 billion for an Early Retiree Reinsurance Program.
The program, which was slated to begin on June 21, 2010 and actually began on June 1, 2010, offers much-needed financial relief to employers who want to offer coverage to younger retirees (ages 55 through 64). These individuals often experience hardship obtaining coverage once they retire or face premiums up to four times higher than young adults. Under the program, once health care costs exceed $15,000, the federal government subsidizes 80 percent of services that would be covered by Medicare. Assistance is offered up to $90,000.
Nearly 2,000 businesses in the U.S. have already been approved for funding, including Fortune 500 companies, small businesses, schools, unions, and local governments. Even states who have challenged the law are among those with businesses applying for assistance, such as Kansas, Texas, and Alaska.
Although many employers will use the subsidies to help lower premium costs for early retirees, HHS Secretary Kathleen Sebelius says that the funds are intended to slow the decline of businesses offering early retirement assistance.