Early Retiree Reinsurance Program: Real Impacts on Real People

Last week, I traveled to Cranberry Township Pennsylvania where I met Bill. He worked as a toolmaker for 37 years at MSA (Mine Safety Appliances) and recently retired at age 62. Bill worked hard his entire life, and in his retirement has the peace of mind knowing that because of the early retiree health coverage provided by his former employer, he has secure health insurance for himself and for his wife.

But for too many Americans between the ages of 55 and 64, the health insurance marketplace is far too expensive. In fact, someone who is in their 60s may find themselves paying many times more for the same plan than someone in their 20s.

That’s why it’s more important than ever that we support the businesses that do right by their employees and provide a health insurance plan for those who retire before they become eligible for Medicare. The Affordable Care Act, the health reform signed into law by President Obama in March, does just that.

The Early Retiree Reinsurance  Program, a key provision within the new law, reimburses employers and unions that provide a health insurance plan for early retirees for some of their highest claims costs, easing the cost burden of providing coverage and therefore continuing to provide coverage for their retirees and their families.

Unfortunately, we’ve seen too many employers and unions decide to discontinue this key benefit. In 1988, 66 percent of large businesses provided health coverage to their retirees, and in 2009 that had dropped to just 29 percent.

The Early Retiree Reinsurance Program seeks to halt this trend and shore up the financial foothold for employers and unions who want to provide coverage to their retirees. We’ve accepted nearly 3,000 employers and unions into the program, from all 50 states and the District of Columbia.

Designed as another bridge to the new health insurance Exchanges that will become available in 2014, the $5 billion program will reimburse businesses and other employers and unions for medical claims of their early retirees and their dependents. Savings may be used to reduce employers or union health care costs; provide premium or out-of-pocket relief to workers, retirees, and their families; or both.

And, it’s important to know that we continue to accept applications for this program. If you are interested learning more, you can visit www.errp.gov or call 1-877-574-3777.

By helping employers continue to offer coverage for early retirees, we’re helping them compete -- while providing a measure of certainty and security for their former workers at a time when it could not be more important. It’s one step towards making sure people like Bill can enjoy their retirement, knowing that the health insurance benefits they earned will be secure for them into the future.