HHS has announced the first round of applicants accepted into the Early Retiree Reinsurance Program under the healthcare reform law.
Nearly 2,000 employers have been accepted into the program and will begin to receive reimbursements for employee claims this fall
, according to a statement from HHS. The approved applications represent nearly every sector of the economy: 32% from businesses, 26% from state and local governments, 22% from union sponsors, 14% from schools and other educational institutions and 5% from not-for-profits.
"There is a lot of enthusiasm in the business community about this program," Sebelius said at a news conference. "This is a program that is providing real relief for employers."
Participating employers and unions include Corning, Indiana State University, the University of California, the United Auto Workers and Pacific Gas & Electric, Sebelius said.
“In these tough economic times, it is difficult for employers to keep up with skyrocketing healthcare costs for employees and retirees. Many Americans who retire before they are eligible for Medicare see their life savings disappear because of medical bills and exorbitant rates in the individual health insurance market,” HHS Secretary Kathleen Sebelius said a written statement. The program will make it a little easier for employers to provide high-quality health benefits to their retirees “as we work to put in place market reforms to lower costs for all.”
The retiree program was created by the Affordable Care Act as a bridge to the new health insurance exchanges in 2014, providing $5 billion in financial assistance to employers and unions to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare.
Employers accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses and dependents. “Savings can be used to reduce employer healthcare costs, provide premium relief to workers and families, or both,” according to HHS. The program ends on Jan. 1, 2014, when the exchanges are up and running.