A $5 billion Early Retiree Reinsurance Program created as part of the health care reform law will run out of money soon. $3.6 billion have already been distributed.
The $5 billion is meant to reimburse early retiree reinsurance program plan sponsors for part of the money they have paid out due to early retiree health care claims. Eligible claims are made by retirees of at least 55 years of age that are not eligible for Medicare. In addition the program only covers claims filed after June1, 2010. This program lets the government reimburse employers and other early retiree health care plan sponsors for a portion of these medical claims filed.
The program is structured to pay 80% of medical costs up to $90,000 per year, once a participant has had $15,000 in claims.
A survey is being sent out by the Centers for Medicare and Medicaid Services to understand how the plan sponsors have used this reimbursement money. The money is supposed to be used to cover both monies paid out by a plan sponsor due to claims, and to lower the retirees’ health care costs.
As a business owner, you may want to look into this program if you business is sponsoring an early retirement health care benefit. If you are looking to design a program that encourages early retirement of some employees, keep an eye on this program and its potential future as a source of funding aid.
For more information, visit the Early Retiree Reinsurance Program website. 
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on employee benefit issues. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.