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Early Retiree Reinsurance Program (ERRP)

Employers that provide health insurance to early retirees (ages 55 to 64, who aren't Medicare eligible) began applying for a share of the government's incentive money in the summer of 2010. This incentive is designed to encourage employers to continue providing health care benefits to employees who opt for early retirement.

Who's eligible?
Employers who have been accepted by the Department of Health and Human Services (DHHS). No new applications will be accepted after May 6, 2011.

How does it work?
First, you have to be accepted into the program. (See "How do I apply?" below.) If accepted, you'll receive money for medical claims for early retirees (ages 55 to 64) and their eligible spouses, surviving spouses and dependents. The program reimburses the employer plan for up to 80% of its medical and pharmacy claims between $15,000 and $90,000. . For plan years beginning on or after October 1, 2011, reimbursement will be between $16,000 to $93,000. You can use the money either to reduce your health care costs; or to lower participants' premium contributions, copays or deductibles - or a combination of both! (Note: Reimbursement funds cannot be used as general revenue.)

Employers must have, or plan to implement, programs and procedures to generate cost-savings for participants in the plan with chronic and high-cost conditions.

When it's effective
The program is in place from June 23, 2010, until Jan. 1, 2014, or until the $5 billion funding is used up. Only employers who have already been accepted may participate. After that, the insurance exchanges should be up and running, and retirees will be able to choose from coverage options there.

Additional information
DHHS has posted information about how to receive reimbursement under this program, including training materials, on www.errp.gov.

Find out how Priority Health is addressing this requirement.