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Health Reform Update: Early Retirees & High Risk Pools

May 11, 2010

Health Care Reform Update

Early Retiree Reinsurance Program  

The Patient Protection and Affordable Care Act includes an early retiree reinsurance program that is available to group health plan sponsors who provide medical coverage to early retirees and their spouses, surviving spouses and dependents. It is intended to encourage employers to provide health coverage to early retirees until state health exchanges and federal subsidies for health coverage are implemented. This temporary program will provide $5 billion to help employers to continue to provide coverage to certain retirees. The program provides for reimbursement of an early retiree's (and covered dependents') health care claims in an amount equal to 80% of the costs between $15,000 and $90,000.  

The employer is then expected to use the reimbursement to help lower health care costs (such as premium contributions, copays and deductibles) for participating enrollees. The program provides for reimbursement of an early retiree's (and covered dependents') claims in an amount equal to 80% of health benefits costs between $15,000 and $90,000.  

This program is expected to be effective from June 1, 2010, to January 1, 2014. After January 1, 2014, retirees will have additional coverage options through the health insurance exchanges. Both self-insured and fully insured employer groups can participate. To participate in the program, employers must first submit applications (likely available beginning in June) to the Department of Health and Human Services.  

For additional details, take a look at the attached frequently asked questions 

States weigh in on high risk pools

The results from the Health and Human Services request to states about whether they would like to establish their own enhanced high risk pool or allow the federal government to establish a pool in the state have been assessed. Of the 14 Blue-branded states affiliated with the Anthem Blue Cross parent company, all decided to establish their own pool, except Nevada, Indiana, Georgia and Virginia. And while Maine and New York have guaranteed issue individual markets, both expressed the desire to have a process in which they could draw from federal funds to create their markets.  

The attached map (courtesy of AHIP) shows decisions reported from the states.

Anthem Blue Cross is also sending this information to employers on Monday, May 10.

Anthem Blue Cross wants you to stay informed, so you can expect more updates like these as new guidance and other important health care reform information becomes available. If you have any questions, contact your b&p sales representative.

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