WASHINGTON—New regulatory guidance resolves many questions employers have about a federal program that will partially offset claims incurred by pre-Medicare-eligible retirees and dependents, but more information will be needed before reimbursement checks begin to flow to early retiree health care plan sponsors.

Under the $5 billion Early Retiree Reinsurance Program—created by the new health care reform law—the government will reimburse employers for a portion of health claims incurred starting June 1 by retirees who are at least age 55 but not eligible for Medicare, as well as covered dependents, regardless of age.

After a participant incurs $15,000 in health care claims in a plan year, the government will reimburse plan sponsors for 80% of claims up to $90,000. In general, the reimbursement must be used to reduce employers' and retirees' health care costs.

Applications from at least 2,000 organizations—including such corporate giants as IBM Corp. in Armonk, N.Y., and Wells Fargo & Co. in San Francisco—have been approved by federal regulators to participate in the program, with perhaps nearly as many applications from other organizations under review, consultants say.

“Applications still are being sent in,” said Derek Guyton, a partner in the Chicago office of Mercer L.L.C.

Last week, government regulators moved the program closer to startup with the release of additional guidance.

One batch of information details the types of claims that will not be eligible for government reimbursement or credited toward the $15,000 threshold. Ineligible claims, which are for health care services not covered by Medicare, include custodial care, hearing aids and auditory implants, and cosmetic surgery, except when required for prompt repair of accidental injury or for the improvement of the functioning of a malformed body part. Also ineligible are claims for in-vitro fertilization, artificial insemination and abortion, except if the pregnancy resulted from rape or incest or endangers the woman's life.

Further guidance on excluded health care services may be issued later, the Department of Health and Human Services said.

In addition, regulators issued a form—called “Notice about the Early Retiree Reinsurance Program”—that participating employers must distribute to enrollees in their early retiree health care plans.

The notice provides basic information about the reimbursement program, including the requirement that an employer receiving government reimbursement use the money to reduce or offset enrollees' costs and/or to offset or reduce its own costs in providing the coverage.

Previous guidance details procedures employers must follow in sending lists of early retirement health care plan participants who have incurred at least $15,000 in claims and whose claims now are eligible for reimbursement.

In all, “Some pretty extensive guidance has been issued,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.

But key additional guidance, said Todd Delahanty, a senior consultant with Aon Hewitt Inc. in Lincolnshire, Ill., has yet to be issued: the application form employers must use to obtain reimbursement, and filing instructions for the form.

Observers expect that form to be released soon, with the first government reimbursement checks issued by the end of October.

The Employee Benefit Research Institute in Washington has estimated the $5 billion fund will be depleted next year.