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Early Retiree Reinsurance

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Coverage for pre-Medicare Minnesotans

Many Minnesotans who retire before age 65 have difficulty finding health coverage because they often have health problems and may not be able to find affordable coverage.  Most of these early retirees are not yet eligible for Medicare and many are not covered under their former employer’s health benefit plan.

The Early Retiree Reinsurance Program is a temporary federal program that began in 2010 to help employers cover early retirees, retiree spouses, surviving spouses and dependents.  Thousands of Minnesotans are benefitting because their former employers are offering coverage for early retirees.  

Beginning in 2014, these retirees would have affordable health coverage options through an Exchange.

Who is an early retiree?

The term ‘‘early retiree’’ means an individual, age 55 and older who is not yet eligible for Medicare and who is not an active employee of the employer maintaining the health benefit plan.  The term early retiree also includes the retiree’s spouse, surviving spouse and dependents.

I would like to retire early. Is my employer required to provide early retiree coverage under federal health reform?

No.  The Early Retiree Reinsurance Program is a voluntary program for employers who wish to provide benefits for their early retirees.

I will be an early retiree. How do I sign up for the Early Retiree Reinsurance Program?

The Early Retiree Reinsurance Program is a program for employers.  It does not require enrollment by individual early retirees.  If an employer participates, all early retirees, as well as covered spouses, surviving spouses, and dependents are automatically included.  A list of participating Minnesota companies is located under documents on the Early Retiree Reinsurance Program page of this site.

Who is an early retiree?

The term ‘‘early retiree’’ means an individual, age 55 and older who is not yet eligible for Medicare and who is not an active employee of the employer maintaining the health benefit plan.  The term early retiree also includes the retiree’s spouse, surviving spouse and dependents.

I would like to retire early. Is my employer required to provide early retiree coverage under federal health reform?

No.  The Early Retiree Reinsurance Program is a voluntary program for employers who wish to provide benefits for their early retirees.

I will be an early retiree. How do I sign up for the Early Retiree Reinsurance Program?

The Early Retiree Reinsurance Program is a program for employers.  It does not require enrollment by individual early retirees.  If an employer participates, all early retirees, as well as covered spouses, surviving spouses, and dependents are automatically included.  A list of participating Minnesota companies is located under documents on the Early Retiree Reinsurance Program page of this site.

If I retire from my employer before age 65, does the Early Retiree Reinsurance Program reimburse me for my premiums, deductibles or other out-of-pocket costs?

No.  The Early Retiree Reinsurance Program reimburses the employer for a portion of claims paid for early retirees, their spouses, surviving spouses and dependents.  This program is designed to make it easier for employers to provide health insurance benefits to their early retirees.

What is the effective date of the Early Retiree Reinsurance Program? And when will it end?

The Early Retiree Reinsurance Program stopped accepting applications on May 5, 2011 when the appropriated funding was exhausted.

How do employers qualify to receive payments under the Early Retiree Reinsurance Program?

Employer-sponsored retiree health plans must submit an application and be accepted into the program.  Once accepted, the participating employer can apply for reimbursement of actual claims paid on behalf of an early retiree.  The employer will need to submit evidence that the plan has implemented programs and procedures to generate cost-savings with respect to participants with chronic and high-cost conditions and documentation of the actual cost of medical claims involved.  Employers who have been accepted into the program can find information on how to submit claims at ERRP.gov.

What types of employer-sponsored plans are eligible?

All non-federal employer-sponsored health benefit plans for early retirees are eligible to participate in the program, including employer-sponsored plans that are self-funded by the employer or funded by a health insurance policy (fully insured).  Among the eligible program participants are private entities, state and local governments, nonprofits, religious entities, unions and other employers.

How much will an employer health plan covering early retirees receive?

The reinsurance program will reimburse an employer based health plan on the actual amount of health benefits provided to an early retiree, even if the claims were paid by health insurance.  The threshold for filing a claim is $15,000 per individual retiree for each plan year.  Once the threshold is met, the program will reimburse participating plans for 80 percent of claims paid in excess of the $15,000 threshold until $90,000 has been paid for that retiree in that plan year.
During the first year of the program, claims paid before June 1, 2010, can be used to meet the $15,000 threshold if they are paid in the same plan year.  Only claims paid after June 1, 2010, are eligible for reimbursement.

How much funding did Congress appropriate for the Early Retiree Reinsurance Program?

The Affordable Care Act provides $5 billion nationally to fund the reinsurance program until an Exchange is available to provide affordable coverage beginning in 2014.

Can employers still apply for the Early Retiree Reinsurance Program?

No. The $5 billion in appropriated program funding have been spent and, as of May 5, 2011, the program stopped accepting applications.

I am an employer that applied and was accepted into the Early Retiree Reinsurance Program. I am getting ready to submit a claim. Where can I find information on how to submit a claim?

The U.S. Department of Health and Human Services has created a website. Claim information and sample submissions can be found on ERRP.gov.