Orange County NC Website
Browse       Search
13 <br />2010 & 2011 Changes to Employer-Sponsored Health Insurance <br />Changes to Retiree Health Plans <br />What types of changes will there be in 2010 that affect retiree health plans? <br />The Department of Health and Human Services has created a reinsurance program to reimburse employers for costs <br />associated with providing health insurance to non-Medicare eligible .retirees over age 55, as well as their spouses and <br />dependents, called the Early Retiree Reinsurance Program. <br />How might the reinsurance program help employers and retirees? <br />The payments from the reinsurance program are intended to provide financial relief to employers for high cost claims and <br />to help them maintain health care coverage for early retirees. Additionally, the savings gained through the program can <br />help employers lower their health care costs or offer employees reduced premiums. <br />What types of employer plans are eligible to participate? <br />Self-funded and insured plans can apply for reimbursement, including plans sponsored by private entities, state and local <br />governments, nonprofits, religious entities, unions and other employers. <br />What types of health benefits are eligible for reimbursement? <br />Medical, surgical, hospital, prescription drug benefits qualify, as well as mental health services and any other benefits that <br />may be specified by the Secretary of HHS. <br />What is the amount of reimbursement available to employers? <br />Employers can receive up to 80 percent of claims costs for health benefits between $15,000 and $90,000. <br />How does the reimbursement formula work? <br />Claims incurred between the start of the plan yeaz (often January 1) and June 1~` are credited towazds towazd the $15,000 <br />threshold for reimbursement. However, only medical expenses incurred after June 1, 2010 aze eligible for reimbursement <br />under this program. For example, if an individual incurs costs of $30,000 between the start of the plan year and June 1, <br />and $40,000 after that date, the amount which may be reimbursed is $40,000 -the costs above the $15,000 threshold that <br />occur after June 1. If a plan incurs $90,000 or more in expenses before June 1, it is treated as having met the $15,000 <br />threshold and is eligible for reimbursement for costs incurred after June 1. <br />How much money in total is available in the fund? <br />The health reform law contains $5 billion for the Eazly Retiree Reinsurance Program. <br />When will this reinsurance program be effective? <br />The program is effective on June 1, 2010 (in advance of the June 21 start date required by the law) and will end on <br />January 1, 2014, or before then if funds are exhausted. In 2014, early retirees will be able to select coverage from the <br />health insurance exchanges. <br />How can employers apply for the Early Retiree Reinsurance Program? <br />Employers can submit applications to the Department of Health and Human Services and applications are processed in the <br />order they are received. To receive assistance, plans must first have their applications approved, and then document and <br />demonstrate claims have been paid as well as implement programs and procedures that have or have the potential to <br />generate cost savings for participants with chronic and high-cost conditions. Drag applications were made available in <br />early June at to help employers become familiar with the application process and HHS began accepting official <br />7 <br />