Early Retiree Reinsurance Program Will End This Year
|December 15, 2011||Posted by Ashley Cohen under Blog||
California began its Early Retiree Reinsurance Program (ERRP) on June 1, 2010. The program, which received $5B nationally as a part of ACA, offers financial assistance to employers offering coverage to younger retirees (ages 55-64). These younger retirees generally face premiums up to four times higher than young adults. When health care costs are between $15,000 and $90,000, the program subsidizes 80% of the services that would normally be covered by Medicare. Due to a large interest in the program, the Center for Medicare and Medicaid Services (CMS) stopped accepting applications on May 6.
Last week, CMS announced that they have spent $4.5B of ERRP’s $5B as of December 9. Because of the early exhaustion of funds, the program will stop taking claims for expenses incurred after December 31, 2011. The program was supposed to last through 2013.
To date, the program has benefited over 5M people. For example, California’s Silgan Containers Manufacturing received $246,152 in ERRP reimbursements and was able to offset claims costs by 5%.
As of May, HHS had approved over 500 sponsors in California. Sponsors ranged from large companies (such as Allergan, America Honda Motor Company, Jack in the Box, Mattel, Nestle USA, Intel and Wells Fargo), school districts, counties, cities, unions, community colleges, etc. For a full list of California beneficiaries, click here.