Reinsurance provision in health insurance bill

[oliverdickens]

Have found this tidbit that ARRP supposedly say will help early retirees, but do not explain how.

It reads:

A new insurance exchange would help people who don’t have affordable insurance through their jobs. Until the exchange is set up, employers who give health care benefits for retirees ages 55 to 64 would get federal aid through a temporary reinsurance program.

Does anyone know what it means and if it will help a person like me that has a health insurance program through a fortune 500 company that is self insured using BCBS as the administrator.

Makes no sense to me, so hoping someone can explain what ARRP doesn't

Thanks

 

[Coach]

oliverdickens, I can't speak directly to what AARP is talking about, but wonder if it is similar to what I've experienced. I retired early as a part of a buy-out my employer was doing. As a retiree I'm entitled to continue my employee health insurance until 65 -- but I have to pay the full premium. Then Congress passed a subsidy of COBRA insurance continuation for people laid off where the federal government pays, as I recall, 65% of the premium -- I pay the remaining 35%. I think this was good for 9 months originally, but it's been extended at least once, perhaps twice, and I'm in my 12th month.

Strictly speaking, I wasn't laid off, but the feds decided quitting or retiring in the face of possible layoff qualified. Strictly speaking, I'm not on COBRA, but the fed decided continuing employer insurance qualified.

Perhaps the plan AARP is talking about would be similar -- subsidies to employers who allow early retirees continue company heath insurance.

Coach

 

[DWPC]

Strictly speaking, I wasn't laid off, but the feds decided quitting or retiring in the face of possible layoff qualified. Strictly speaking, I'm not on COBRA, but the fed decided continuing employer insurance qualified.
Coach

I'm facing a similar situation in a few months...can you tell me where I can find more info on the "in the face of possible layoff" issue. The only COBRA subsidy information I've seen is in conjunction with unemployment benefits...not any voluntary retirement.

 

[M Paquette]

A new insurance exchange would help people who don’t have affordable insurance through their jobs. Until the exchange is set up, employers who give health care benefits for retirees ages 55 to 64 would get federal aid through a temporary reinsurance program.

That's part of the current health insurance reform bill working it's way through the entrails of Congress.

The idea is that if an employer offers retiree health insurance, that the employer can in turn buy a thing called re-insurance for their retiree group health plan. Many employers self-insure, paying for all claims on their own health coverage budget, and having the insurance company provide claims processing services. This generally works well with a younger, healthy workforce. Retirees and to a lesser extent, older current employees (not yet retired for medical reasons) add a risk of an occasional added expense from those expensive ailments that crop up later in life, such as some cancers, heart disease, and such.

The re-insurance pool lets the employer buy insurance to cover for unexpected expenses in their self-insured pool of retirees, making their costs more predictable, and so making it easier for them to continue or consider adding retiree medical coverage.

 

[Coach]

I'm facing a similar situation in a few months...can you tell me where I can find more info on the "in the face of possible layoff" issue. The only COBRA subsidy information I've seen is in conjunction with unemployment benefits...not any voluntary retirement.

DWPC, the paperwork from my employer references IRS Notice 2009-07, specifically questions 9 and 28.

Coach

 

[Coach]

I've found some more information about this, in the senate bill, section 1102. Although at times I wonder if it's written in English, it seems to me to be saying that if an early retiree (at least 55 and not eligible for Medicare) covered by an employer plan runs up payments to providers of more than $15,000 in a year (including co-pays, deductibles, etc.), the plan can apply for reimbursement of 80% of the amount over $15,000 but not over $90,000, said reimbursement to be used to reduce plan costs. Limits adjust for inflation. This takes effect within 90 days and lasts until 2014.

Coach

 

[huusom]

Re-insurance for early retirees

What will this do for people who retired and not covered by any employer insurance program?

Does anyone know?

 

[M Paquette]

What will this do for people who retired and not covered by any employer insurance program?

Does anyone know?

This particular clause is an incentive for companies to offer or continue to offer insurance coverage for retirees. If you, like me, do not have retirement medical coverage from an employer, this particular clause does nothing for us.

I'm relying on the availability and affordability of individual insurance, and hoping I don't get bit by recision should I have to use it. I've budgeted for a tripling of the insurance rate between now (age 56) and when I'm pushed onto Medicare at 65.

 

[jamcarls]

The federal regulations were published Early Retiree Reinsurance Program 75 FR 24450 Wednesday, May 5, 2010 Interim final rule with comment period. NY times had an article on this. Dodd issued a press release with some detail and examples