Early Retiree Reimbursements Pick Up In Late Summer

One of the most popular provisions of health reform, the Early Retiree Reinsurance Program (ERRP), made about $231 million in reimbursements in August and September 2011, the Center for Consumer Information and Insurance Oversight (CCIIO) reported. The rate of medical expense reimbursements picked up after slowing significantly in June and July.

Beginning 90 days after enactment (June 23, 2010) and ending on Jan. 1, 2014,or when the $5 billion appropriated for the program is exhausted, the temporary reinsurance program was established to reimburse part of the claims cost for participating employment-based plans that provide health insurance coverage for early retirees (ages 55 to 65), eligible spouses, surviving spouses, and dependents of such retirees. The reimbursement is for 80% of plan claims between certain limits, $16,000 and $93,000 beginning on Oct. 1, 2011. Reimbursement is available after applying and being approved for the program and submitting reimbursement requests. An earlier blog post discussed this program.

In the first 17 months after enactment of the Patient Protection and Affordable Care Act, the ERRP has made more than $2.95 billion in reimbursements to 2,149 approved retiree medical plans. The program has been so popular among retiree medical plan sponsors that in April the CCIIO announced that it would stop accepting applications for the ERRP on May 5, 2011, anticipating that the funds allocated for the program would be exhausted early if the reimbursement trend continued at the same rate.

Retiree medical plans that received the most reimbursement so far have included public employee systems, unions, and older, more established corporations.

A comprehensive analysis of the ACA, and additional information on health reform and other developments in employee benefits, is available here.