Alabama – Early Retiree Reinsurance Program
Rising health care costs have made it difficult for employers to provide quality, affordable health insurance for workers and retirees while also remaining competitive in the global marketplace. The percentage of large firms providing workers with retiree health coverage has dropped from 66 percent in 1988 to 29 percent in 2009.1 Health insurance premiums for older Americans are over four times more expensive than they are for young adults,2 and the deductible these enrollees pay is, on average, almost four times that for a typical employer-sponsored insurance plan.3
The Affordable Care Act creates a new program called the Early Retiree Reinsurance Program to help address this challenge that employers and older employees are facing. The Early Retiree Reinsurance Program provides $5 billion in financial assistance to employers and unions to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare.
Businesses, other employers, and unions that are accepted into the program will receive reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents. Savings can be used to reduce employer health care costs, provide premium relief to workers and families, or both. Applicants who are approved into the program receive reinsurance for the claims of high-cost retirees and their families (80 percent of the costs from $15,000 to $90,000). The program ends on January 1, 2014 when State health insurance Exchanges are up and running.
HHS has approved the following sponsors from Alabama. More applications are being approved each day.
- Alabama Aircraft Industries, Inc- Birmingham
- Alabama West Florida Conference*
- American Cast Iron Pipe Company
- Blue Cross and Blue Shield of Alabama
- City of Dothan, Alabama
- City of Huntsville General Activities
- City of Huntsville Utilities
- City of Mobile, Alabama
- City of Montgomery
- City of Phenix City
- City of Tuscaloosa
- Coca-Cola Bottling Company United, Inc.
- Council of the City of Anniston*
- DCH Healthcare Authority
- Decatur Utilities
- Drummond Company, Inc.
- Electric Cooperative Voluntary Employees Benefit A
- Energen Corporation
- IBEW-NECA Local 505 Health Plan
- Jefferson County Commission
- Jim Walter Resources, Inc.
- Legacy Vulcan Corp.
- Local 903 IBEW Health and Welfare Plan
- Mechanical Contractors - U. A. Local 119 Welfare Plan
- Mercedes-Benz U.S. International, Inc.
- Mobile County Commission
- Montgomery County Commission
- National Cement Co of Alabama
- Pemco World Air Services
- Phifer, Incorporated
- PowerSouth Energy Cooperative
- Public Education Employees' Health Insurance Plan
- Regions Financial Corporation
- Sheetmetal Workers Local 441 Health & Welfare Plan
- State Employees' Insurance Board
- The City of Auburn, Alabama, A Municipal Corporation
- The Water Works Board of the City of Birmingham
- The Westervelt Company
- Tombigbee Healthcare Authority
- Tuscaloosa County Office of Treasurer
- Walter Energy, Inc.
- Water Works and Sanitary Sewer Board of the City of Montgomery AL
*New program participants as of May 24, 2011. List to be updated monthly.
[1] Kaiser / HRET. Employer Health Benefits: 2009 Survey.
[2] Center for Policy and Research. Individual Health Insurance 2009.
[3] Kaiser Family Foundation. 2010. Survey of People Who Purchase Their Own Insurance.