Retiree Reinsurance Program Sent into Retirement
In all the talk of budget changes and healthcare reform, there are a number of health insurance-related programs not getting much media attention. ModernHealthcare.com recently reported on one of them: the Early Retiree Reinsurance Program, a section of the Patient Protection and Affordable Care Act that gives money to employers to assist in offsetting the medical costs of retired employees between the ages of 55 and 64 (as well as their spouses and dependents) will be retired itself as of May 5th, 2011.
This program, which is a $5 billion entry in the budget has, so far, paid out almost $1.8 billion of reimbursements to more than 1,300 businesses across the country.
The program is scheduled to terminate completely by January 2014, with no new applications from employers after May 5th of this year. Last October, payments began to be sent to plan sponsors for claims that were incurred after June 1 of last year.
The largest amount of money, so far, has been given to AT&T ($140 million), and the United Auto Workers Retiree Medical Benefits Trust ($206.8), with other recipients including Boeing, UPS, and BP North America. 97% of those funds were used to help reduce the amount of money early retirees had to pay for healthcare. Employers which are part of the program are allowed to choose to use these funds to offset retiree’s health care costs, company health care costs, or a combination of the two.
While payouts were made to companies in all fifty states, the highest percentage of the monies went to employers in the state of Michigan, which received $320 million.