HHS Issues Regulations Implementing the Early Retiree Reinsurance Program


On May 4, 2010, the U.S. Department of Health and Human Services ("HHS") issued regulations implementing the Early Retiree Reinsurance Program (the "Program") as established by recent health care reform legislation. The purpose of the Program is to incentivize employers to continue providing health coverage for early retirees age 55 and older who are not yet eligible for Medicare ("Early Retirees").

Starting June 1, 2010, the Program will provide reimbursements to employers for a portion of the cost of providing health coverage to Early Retirees and their eligible spouses, surviving spouses, and dependents. Under the Program, employers will be entitled to an annual reimbursement of up to 80% of the cost of medical, surgical, hospital, prescription drug and mental health services between $15,000 and $90,000 per individual, which amounts will be adjusted each year. While only expenses incurred after June 2010 are eligible for reimbursement, eligible claims incurred from the beginning of a plan year will be counted for purposes of determining if the $15,000 minimum threshold for reimbursement has been met.

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