The Department of Health and Human Services (HHS) announced on Tuesday that it has approved nearly 2,000 employers and unions to participate in a $5 billion early retiree reinsurance program created under the Affordable Care Act. The program, operated by HHS' new Office of Consumer Information and Insurance Oversight, will help pay health benefit claims for early retirees—those individuals age 55 or older who are not yet eligible for Medicare.
The nearly 2,000 employers, selected from the first round of applicants, represent a variety of organizations such as businesses with familiar names (Hewlett-Packard, Anheuser-Busch, Mack Trucks); hospitals and healthcare systems (Christiana Care Health Systems, Scott and White Memorial Hospital); health plans and insurers (Kaiser Foundation Health Plan, Highmark, Blue Cross Blue Shield of Michigan); plus numerous unions, state and local governments, and educational institutions.
Among the states claiming subsidies for their retired government employees are seven that currently are suing to overturn the federal healthcare reform legislation as unconstitutional. The seven—Arizona, Idaho, Indiana, Louisiana, Michigan, Nebraska, and Nevada—are part of a group of 20 states that have challenged the law's requirement to carry health insurance or face fines.
Businesses and other 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 for reducing employer healthcare costs, providing premium relief to workers and families, or both. The program will end on Jan. 1, 2014, when state health insurance exchanges begin operating.