Early Retiree Reinsurance Program

The Early Retiree Reinsurance Program provision of the Patient Protection and Affordable Care Act (PPACA) became effective June 23, 2010. The program allows employment-based health plans to apply for reimbursment for a portion of the cost of covering early retirees and their dependents. Since the AlaskaCare Retiree Health Plan offers health benefits to qualified early retirees and their dependents, it has applied for this program.

Summary of Provisions

Temporary Reinsurance Program for Early Retirees

Effective June 23, 2010

  • Employment-based plans (self or fully insured) providing health benefits, including prescription drugs, to early retirees (retirees age 55 through 64) and their dependents can apply to receive reimbursement for a portion of the cost of coverage.
  • An employment-based plan that participates in the reinsurance program must implement programs and procedures to generate cost savings with respect to participants with chronic or high cost conditions.
  • Reimbursement is 80 percent of a valid retiree claim between $15,000 and $90,000 (as adjusted each year based on the Medicare percentage increases).
  • Reimbursements must be used to lower costs for the plan.
  • The reinsurance program ends on January 1, 2014; but could end early should the $5 billion appropriation be spent before this date.