ERRP Funds Will Likely be Exhausted by the End of 2012

health care cost2.JPGAccording to the budget request for the U.S. Department of Health and Human Services (HHS), the Early Retiree Reinsurance Program (ERRP) will likely use the remainder of its funds in 2012, effectively ending the program. Created by the Affordable Care Act, the ERRP provides $5 billion in temporary financial help for employer health plans that continue to provide health coverage to “early retirees,” defined as individuals age 55 and older who are neither active employees nor eligible for Medicare, and to the early retirees’ spouses, surviving spouses, and dependents. Under the plan, the HHS will reimburse plan sponsors for certain claims between $15,000 and $90,000. The program began on June 1, 2010, and terminates on January 1, 2014, or whenever the $5 billion has been exhausted, whichever date is earlier. As discussed in the HHS’s Budget in Brief, (pdf) the HHS expects to pay about $3.6 billion in reimbursements under the program by the end of fiscal year 2011, and will distribute the remaining funds in 2012. As stated in the budget documents, more than 5,000 plan sponsors have been approved since the program’s inception.

This entry was written by Ilyse Schuman.

Photo credit: Andriy Solovyov

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.