Federal Program To Aid With Retiree Health Costs

Copyright 2010 Ventura County StarAll Rights Reserved Ventura County Star (California)

June 30, 2010 Wednesday

LOCAL

528 words

Federal program to aid with retiree health costs

Kim Lamb Gregory [email protected]

Retirees from 55 to 64 may now have a health insurance bridge that will take them to 2014, when the more affordable health insurance exchange takes effect.

Those retiring from a company that offers retiree healthcare benefits and applies for the new Early Retiree Reinsurance Program (ERRP), will have an alternative to private health insurance.

The Department of Health and Human Services' Office of Consumer Information and Insurance Oversight (OCIIO) Tuesday began accepting applications from employers who would like to participate in ERRP.

Created by the Patient Protection and Affordable Care Act, ERRP provides $5 billion to help businesses provide health coverage to retirees 55 and older who have not yet reached age 65, when they can qualify for Medicare.

Department of Health and Human Services Secretary Kathleen Sebelius said Tuesday that the program is intended to help employers afford coverage for retirees who don't yet qualify for Medicare, as well as to help retirees afford a policy that won't deplete their savings.

"Today, Americans who have retired but are not yet eligible for Medicare are often unable to find coverage that is affordable and meets their health needs on the individual market," Sebelius said in a news release. "This program will help both retirees and employers facing spiraling healthcare costs and ensure more Americans have access to the healthcare they need."

Local businesses contacted by The Star were unaware such a program existed, but at least one owner was interested.

"It sounds like a good deal to me," said Lee Cole, chief executive officer of Calavo Growers, which has offices in Santa Paula. "We'll check it out."

Calavo employs about 450 people in California.

A spokesperson for Amgen Inc. in Thousand Oaks said the new program wouldn't apply to their early retirees because the health coverage they provide to them is in a different form.

"We have a retiree medical savings accounts staff members and Amgen can contribute to," said Amgen media relations representative Kristen Davis.

It doesn't matter how large or how small a business is, as long as it has an existing health plan for early retirees, and has at least one retiree producing health claims of a minimum of $15,000 per year, but not beyond $90,000. The ERRP program will reimburse employment-based plans for up to 80 percent of claim costs for each early retiree, his or her spouse, or his or her dependents.

Rep. Lois Capps, D-Calif., on Tuesday urged businesses, unions, and local governments in her constituency to apply as soon as possible.

Ashley Schapitl, a spokesperson for Capps' Washington, D.C. office, pointed out numbers from a 2009 Kaiser Family Foundation and Health Research & Educational Trust survey illustrating how difficult it has become for employers to provide retiree healthcare coverage.

In 1988, 66 percent of large companies (200 or more workers) provided retirees with healthcare coverage compared with 29 percent in 2009, she said.

"Applications will be evaluated on a first-come, first-served basis, so it's important for them to get in," Schapitl said.

On the net:

http://www.hhs.gov/ociio/Documents/application.pdf.

June 30, 2010