July 8, 2010
Employers eligible for federal funds to cover early retiree health insurance claims
$5 billion available under health care reform law
Jefferson City, Mo. - Missouri Insurance Director John M. Huff is reminding employers in Missouri that the new federal health care reform law provides funds to help with the cost of providing health insurance to early retirees. There is $5 billion available for employers who are providing coverage to retirees between ages 55 and 64.
Known as the "Early Retiree Reinsurance Program," the funds will reimburse up to 80 percent of an employer's health claims between $15,000 and $90,000 per retiree. For example, if a company pays $10,000 in claims for a retiree, no funding is available. But if the employer has claims costs of $30,000, reimbursement is available for $15,000 of those claims.
"This federal funding is intended to support the cost of providing health insurance to retirees who don't yet quality for Medicare," said Huff. "All types of organizations can apply - for-profit companies, nonprofits, state and local governments and others."
Companies with both types of private insurance are eligible for the funding: those who are self-insured and those whose health benefits are provided by an insurance company. Employers can use the savings to stabilize their own costs, lower premium costs for workers, increase coverage, or a combination of the three. More information is available from the U.S. Department of Health and Human Services website.
The funding is intended to bridge the gap between now and 2014, when early retirees will be able to buy health coverage through state-based insurance exchanges.
In addition to this funding for employers, several pieces of the health care reform law are taking effect this summer:
- The Missouri Health Insurance Pool announced it will soon be accepting applications from Missourians with pre-existing medical conditions, using $81 million in federal funding for a new high-risk pool.
- Several major health insurers in Missouri are now following the new requirement that health plans offer coverage to young adults up to their 26th birthday on their parents' policies. The law did not require the change until this fall.
- Some small businesses will be able to claim federal tax credits for the premiums they now pay to provide health insurance to their employees.
- The U.S. Department of Health and Human Services has launched a new website, healthcare.gov, which walks consumers and employers through their health insurance choices in each state, including Missouri.
Consumers with general questions about insurance or the federal health care reform law can call the Department of Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.
About the Missouri Department of Insurance, Financial Institutions & Professional Registration
The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.