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Member, Beacon International Group, Ltd.
WASHINGTON—The federal government is slightly adjusting how it will reimburse employers and other sponsors of early retiree health care plans under a $5 billion program set up by the health care reform law.
For plan years that begin on or after Oct. 1, the Early Retiree Reinsurance Program will reimburse 80% of a participant’s claims up to $93,000 after a participant incurs $16,000 in claims in a plan year, according to the Centers for Medicare & Medicaid Services.
Until then, the claim threshold will remain $15,000, with reimbursement of 80% of claims up to $90,000, CMS said last week.
CPI change determines amounts
The claim threshold and limit are adjusted each fiscal year based on the percentage increase in the medical care component of the Consumer Price Index.
Whether there will be money left in the program to reimburse employers for claims incurred by early retirees for plan years that begin after Oct. 1 remains to be seen. Through June 10, slightly more than $2.7 billion—or more than half of the total allocation—already was disbursed.
Due to the rapid disbursement of funds, CMS in April announced that it would stop accepting applications as of May 5 from early retiree health care plan sponsors to participate in the program.