Affordable Care Act Program Helps Maine Employers and Unions Cover Early Retirees

By Ramona du Houx

August 31st, 2010 

The U.S. Department of Health and Human Services today announced the first round of applicants accepted into the Early Retiree Reinsurance Program. In Maine, the following organizations have been approved in the first round:

City of Lynn
Portland Water District
University of Maine System
Unum Group

“In these tough economic times, it is difficult for employers to keep up with skyrocketing health care 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,” said Health and Human Services Secretary Kathleen Sebelius. “The Affordable Care Act’s Early Retiree Reinsurance 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.”

Rising health care costs have made it difficult for employers to provide quality, affordable health insurance for workers and retirees while also remaining competitive in the global marketplace. The percentage of large firms providing workers with retiree health coverage has dropped from 66 percent in 1988 to 29 percent in 2009. Health insurance premiums for older Americans are over four times more expensive than they are for young adults, and the deductible these enrollees pay is, on average, almost four times that for a typical employer-sponsored insurance plan.

Starting in September, approved applicants can begin submitting claims dating back to June 1, 2010 and, starting in October, approved applicants will receive reinsurance payments on those claims. This policy allows more health benefit claims to qualify for reinsurance payments for plans this year.

“There has been a tremendous amount of interest from businesses and organizations from across Maine since the Early Retiree Reinsurance Program was announced just a few months ago,” said Sebelius. “Nationally, we have received applications from more than 50 percent of Fortune 500 companies, all major unions, and government entities in all 50 States and the District of Columbia, and we are delighted to be able to notify our first round of successful applicants here today.”

Created by the Affordable Care Act to help serve as a bridge to the new health insurance Exchanges in 2014, the Early Retiree Reinsurance Program provides $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. Businesses and other employers and unions that are 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 health care costs, provide premium relief to workers and families, or both. The program ends on January 1, 2014 when State health insurance Exchanges are up and running.

HHS’ Office of Consumer Information and Insurance Oversight is continuing to accept and review additional applications in the order in which they were submitted.

In addition to announcing these approved applications, HHS announced today two new information tools for employers and unions interested in the Early Retiree Reinsurance Program – a new website (www.ERRP.gov ) and a new hotline (877-574-3777 or 877-574-ERRP). Employers and unions can find the application form and application instructions online, as well as other relevant guidance and regulations from HHS.

For more information about the Early Retiree Reinsurance Program and an interactive map displaying the employers that have been accepted into the Early Retiree Reinsurance Program please visit:

http://www.healthcare.gov/news/factsheets/early_retiree_reinsurance_program.html.