EARLY RETIREE REINSURANCE PROGRAM PROVIDING KEY SUPPORT TO MILLIONS OF RETIREES
Today, the Centers for Medicare & Medicaid Services (CMS) released a new report announcing that the Early Retiree Reinsurance Program (ERRP) has provided more than 1,300 employers across all 50 states with nearly $1.8 billion in reimbursements. This Affordable Care Act program is providing significant relief to a broad array of businesses, state and local governments, non-profits, unions and others that offer health insurance to their early retirees. Today’s report demonstrates both the popularity and success of the program and also builds on previously collected data, which revealed that 97-percent of the funds were used to help reduce health insurance costs for retirees and their families – putting dollars back into consumers’ hands.
CMS also announced today that, due to the overwhelming response, the ERRP program will no longer be accepting applications after May 5, 2011, consistent with the law’s guidance based on the availability of funding.
“We are thrilled with the success of the Early Retiree Reinsurance Program and excited that we are helping maintain coverage and moderate costs for millions of American workers and retirees,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS, which administers the program. “Insurance for older Americans is over four times more expensive than coverage for young adults and we are happy that this program is helping employers maintain coverage.”
The report details reimbursements received by each participating plan sponsor. Most of the individual ERRP payments made in 2010 were for less than $1 million, and 43-percent of individual payments were for less than $100,000. In addition to the smaller payments, larger plans covering millions of retirees – including private corporations, state governments, and multi-employer welfare plans – received large reimbursements that have provided essential support as they struggle to maintain coverage and keep costs low. One large employer reported that ERRP reimbursements provided a 3-percent premium discount for retirees, a savings of up to $200 million.
“Health care costs are one of the most daunting challenges to the long-term growth and success of businesses,” said Richard Popper, director of Insurance Programs at CCIIO. “This program makes sure that no matter who you worked for, a large or small company, your former employer has the resources necessary to keep you covered.”
To read the report, visit http://cciio.cms.gov/resources/files/errp_progress_report_3_31_11.pdf
Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.