The Early Retiree Reinsurance Program enables employers to better afford covering health insurance for employees who retire early.
Many Baby Boomers have invested in savings plans with the expectation of taking an early retirement. However, retirement savings are often not enough to cover the costs of health care for those who are uninsured. This forces many potential retirees to either continue working to maintain their employer sponsored insurance plans, or retire and risk living without insurance until they are eligible for Medicare.
As part of the new government healthcare plan, the Affordable Care Act of 2010 Reinsurance Program for Early Retirees will go into effect this summer. This program is designed to help employers afford the cost of health insurance coverage for employees who retire before the age of 65.
There was a time when the majority of large employment firms provided health insurance coverage to early retirees. However, that number has sunk from 66 percent in 1998 to a mere 31 percent in 2008. Early retirees who do not receive coverage will eventually be eligible for Medicare, but not until they reach the age of 65. This has left millions of early retirees with rising health costs and no affordable health insurance options.
According to a fact sheet published by the White House, Baby Boomers who fall in the 55 to 64-age bracket are 50 percent more likely to report fair to poor health than those aged 45 to 54. Their health costs are 50 percent higher as well, and high premiums have kept individual market insurance from being a viable option.
To address the needs of these Americans, the Early Retiree Reinsurance Program will provide $5 billion in temporary financial help for employer sponsored plans that offer health insurance to certain early retirees. To be eligible, an early retiree must be over the age of 55, cannot be an active employee, and cannot be able to receive Medicare. For qualifying employees (and their dependents), the employer plan will receive up to 80 percent of the costs of health benefits between $15,000 and $90,000. However, to receive reimbursement, the health insurance plans must have programs in place that save costs for participants with chronic and high-cost conditions.
The Early Retiree Reinsurance Plan will go into effect on June 23, 2010, and will last until January 1, 2014. After that time, early retirees will then be able to choose from health insurance exchanges, which are part of the larger government health care plan. While the reinsurance plan is in effect, qualifying employer plans will be eligible to receive payments for medical, surgical and hospital costs, as well as the costs of prescription drugs.
As many Americans know, there are current problems in the health care system; problems that the newly passed government health care program will attempt to address. Overhauling the health care system will not happen overnight, but the Early Retiree Reinsurance Program is one of the first steps in that direction.
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Thank you for your information, this is good news for me and many baby boomers. I am 60 year olds, I already submitted retirement package last month and my retired date is July 1st 2010. I called my Company benefit dept. several time for confirmation of REINSURANCE PRGRAM FOR EARLY RETIREE (55-64) UNDER HEALTH CARE REFORM BILL, but until today I was told : They don’t know yet and I still pay $868.00 a month for Health Insurance preminum for myself and my wife, start on July 1st 2010 (my retired date). I am confusing : If The company not inform me REDUCE PREMINUM BY JUNE 23rd 2010, I have to cancel my early retirement and keep working for health insurance only $150/month. Please, gives me your opinions. Thank you very much.
I am paying 918 month for comprehensive health care. Lots of deductibles. I have to pay out 5,000 out of pocket before it kicks in at only 80%. I am 60 and have worked since 14. I cannot believe that our age group has been hung out to dry or die. The stress alone is unbelievable. We have all been led down a path that is going to do bankrupt most people. I only hope any pray that everyone of congress and senate plus others get totally voted out. They do not care for the American people as long as they have theirs. I find it digusting that my Dad and brother’s have fought in war for our country to be free among thousands of others. Something that started out so simple to provide a national coverage for those of us who are called uninsurable could get coverage without spending lfe savings. Now it has turned out whoever could put money in who’s pockets during he change and all the lobbyist push to protect the money making insurance companies. Look at the profits…it is all about the almighty dollar. 18 states have opted out of the high risk pool which is forcing many of us to relocate to states that have it. This means leaving our families and going to another state, becoming a resident and starting over without the family support. In addition the market is making sure that no older people get hired…too high risk…It is like they want us to die and get out of the way. It has already been proven that the older workers are more respectful and can mentor others. When applying online for jobs they ask birthdate and social and I am sure there are no responses to anyone of a certain age group. Companies that get rid (keeping it legal by getting rid of a couple of younger workers) of older employees and hiring in younger at a much less wage.
You are right on all counts. I am 53 in September and contemplating retirement at 55 if iI have some form of health insurance to protect me. I can’t afford the kinds of premiums you are talking about. If I could retire that would open up a good paying job for a younger person, perhaps with a family to support. I wish the politicians in Washington would look at the bigger picture. It’s more than just my interests they are holding up. Why can’t we have a national health care program like every other industrialized nation? Between all the money from Medi-Cal, medi-Care, employer paid healthcare and individual insurance participant we could probably afford to insure every man, woman and child. The reasons we can’t just don’t add up! Have you seen the movie sicko?
I recently retired @ 61 and am having to pay my own insurance premiums after working 17 years as a state employee. How do I find out if my state is enrolled in this program?