A reinsurance program for early retirees will be available to businesses no later than June 23 of this year.
The Affordable Care Act has benefits that will help both early retirees and businesses. Among those benefits is a reinsurance program for early retirees that will be available to businesses no later than June 23 of this year. Reinsurance has been successfully used by a number of states to lower premiums for small businesses. It will help defray the high and often unpredictable costs of covering early retirees, helping them to maintain valuable group benefits at affordable levels.
The early retirment program provides $5 billion in temporary financial help for employer plans to continue to offer their group coverage to certain early retirees. An "early retiree" is defined as an individual who is 55 years of age or older and who is neither an active employee nor eligible for Medicare.
For each early retiree, his or her spouse, surviving spouse and dependents, the employer will receive payments up to 80% of costs, minus negotiated price concessions, for health benefits costing between $25,000 and $90,000 per year. Future fiscal year payments will be adjusted by the medical component of the consumer price index.
Health plans must use these payments to reduce enrollees' plan premiums, deductibles, copayments, and other out-of-pocket expenses.