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Health care is all the rage these days. Keeping health care coverage affordable and accessible for aging employees is a constant concern for any employer -- especially in the face of rising costs across the board. As part of President Obama's health care reform efforts, the $5 billion Early Retiree Reinsurance Program was established to help cover costs for individuals who leave the workforce between the ages of 55 and 64, according to Bloomberg.
Health and Human Services Secretary Kathleen Sebelius is quoted: "In these tough economic times, it is difficult for employers to keep up with the skyrocketing health care costs for employees and retirees. 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." The program will cover 80 percent of health costs for retiree claims ranging from $15,000 to $90,000.
Awarded on a first-come first-serve basis, the Early Retiree Reinsurance Program is specifically aimed at helping ease the financial burden associated with those employees in the limbo zone -- retired, but not yet eligible for social security benefits . The purpose of the program is to reduce health care premiums for a retiree, which will hopefully also limit the number of companies dropping health coverage for these individuals and their spouses.
To date, 2000 organizations, ranging from large businesses to local governments, have been selected in the first round of applicants to take advantage of the program, scheduled to last until January 1, 2014. Critics of the Early Retiree Reinsurance Program see it as grossly underfunded, and likely to run out two years before the announced end date. For now, the program will accept applications until funds actually do run out, and there is no limit as to the number of employees a company may apply for.