The new Office of Consumer Information and Insurance Oversight says the new Early Retiree Reinsurance Program is open for business.
The OCIIO, an arm of the U.S. Department of Health and Human Services created by the new Affordable Care Act package, has started taking applications from employers for the early retiree program.
When Congress enacted the bills that make up the ACA - the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act - it continued to permit health insurers to keep medical underwriting programs in place until plan years that start in 2014.
Early retirees ages 55 to 64 are too young to apply for Medicare unless they qualify for Social Security Disability Insurance benefits, and, in states that permit medical underwriting, those early retirees often have trouble qualifying to buy affordable individual health insurance on their own. Congress tried to fill the gap by providing $5 billion in ERRP aid.
Businesses, unions, state and local governments, and nonprofits that provide early retiree health benefits can apply to ERRP for reimbursement of 80% of medical claim costs for an individual who has claims ranging from $15,000 and $90,000. Both insured and self-funded plans can use the program.
Program participants will be able to submit claims for medical care going back to June 1, 2010, according to ERRP officials.
To participate, employers must be able to document claims and "implement programs and procedures that have or have the potential to generate cost savings for participants with chronic and high-cost conditions," officials say in the program description.
U.S. Health and Human Services Secretary Kathleen Sebelius says the program will be good for employers as well as for early retirees.
The program will "ensure more Americans have access to the health care they need," Sebelius says in a statement.
Jay Angoff, a former Missouri insurance director, is the head of the OCIIO.