One program as a result of the Affordable Care Act of 2010 will help early retirees obtain insurance coverage through group health insurance plans. The reinsurance program for early retirees will provide financial assistance for employers that continue to cover early retiree’s benefits.
The early retiree reinsurance program will provide $5 billion to employer plans that provide coverage for “certain ” retirees. Payments for the program are retroactive for a plan year which will help many employers and early retirees. The temporary program will start in late June and will only last until the beginning of 2014. Then in 2014, early retirees with pre-existing conditions will be able to find coverage at a more affordable price.
According to The White House, an early retiree is any individual aged 55 and older who is not an active employee or eligible for Medicare. Adults between the ages of 55 and 64 are too young to receive assistance from Medicare but cannot purchase insurance on the individual market. Early retirees typically are in poor health and have pre-existing conditions and cannot find cheap coverage.
Employers and union employer-based health insurance plans will submit applications to the Department of Human and Health Services to participate in the program. These plans will receive payments for medical, surgical, hospital and prescription drugs costs which will benefit many early retirees. The payments from the government will go to the group health insurance plan on behalf of the early retiree.
Many employers have been cutting back their early retiree programs and this will provide financial assistance for a few years.