On March 2, the U.S. Department of Health and Human Services (HHS) released a report examining the national health care reform law’s Early Retiree Reinsurance Program (ERRP).  Under the program, health reform allocates $5 billion for businesses, unions, and state and local governments to cover health care costs for early retirees between the ages of 55 and 65.  The report found that, as of December 31, 2010, HHS had approved over 5,000 employers for participation in the program and paid $535 million for 4.5 million individuals’ health services.  The report highlights methods that participating plans use to reduce costs for individuals with high-cost and chronic health conditions. Running through December 2014, the program will cover 80 percent of the costs of retirees’ claims between $15,000 and $90,000 and offer coverage for early retirees’ spouses and dependents.

From the report:

The Early Retiree Reinsurance Program (ERRP) was established by section 1102 of the Patient Protection and Affordable Care Act (the Affordable Care Act) enacted on March 23, 2010. Congress appropriated $5 billion for this temporary program and directed the Secretary of Health and Human Services (HHS) to set up the program within 90 days of enactment. Accordingly, HHS published an Interim Final Rule to implement the ERRP on May 5 with an effective date of June 1, 2010, and the program began accepting applications on June 29, 2010. The ERRP is scheduled to end no later than January 1, 2014 and will serve as a bridge to the new health insurance marketplace to be established through State-based Health Insurance Exchanges in 2014.

Full Report: Implementation and Operation of the Early Retiree Reinsurance Program (PDF | 269 KB) 

Healthcare.gov. (2011). Implementation and operation of the early retiee reinsurance program.