Leeway given in early retiree reimbursement applications

WASHINGTON—Employers that did not use the U.S. Postal Service to send in their applications to participate in a new early retiree health care reimbursement program will not be required to submit a new application, the Department of Health and Human Services said.

HHS said such applications will be accepted, though it prefers that the Postal Service be used as requested. In addition, employers that sent in a second application after learning they should have used the Postal Service should not contact HHS, which said it is developing a process to respond to such situations.

Under the Early Retiree Reinsurance Program, the government will reimburse employers for a portion of health care claims incurred by retirees who are at least age 55 but not eligible for Medicare, as well as by retirees’ covered dependents, regardless of age.

After a participant in an early retiree plan 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. The reimbursement applies to claims incurred June 1 or later.

As part of the health care reform law, Congress appropriated $5 billion for the program, which was seen as a way to encourage employers to continue their early retiree health care plans until at least 2014.

That is when many key provisions of the health care reform law kick in, including establishing state pools, through which lower-income individuals can use federal health insurance premium subsidies to purchase coverage.