Rhode Island – 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 Rhode Island. More applications are being approved each day.
- Amica Mutual Insurance Company
- BarringtonTown of
- Blue Cross & Blue Shield of Rhode lsiand
- Brown University
- Care New England
- Charlestown Town of*
- City of Central Falls*
- City of Cranston*
- City of East Providence*
- City of Newport*
- City of Newport, Rhode Island
- City of Pawtucket Rhode Island*
- City of Providence Rhode Island
- City of Warwick*
- Cookson America, Inc.
- Cumberland School Departments*
- Factory Mutual lnsurance Company
- Finance Director Town of South Kingstown
- Frost Controls Inc
- Lifespan Corporation
- Lincoln Public School Dept*
- Lincoln Town of*
- North Kingstown Town of*
- Plumbers & Pipefitters Local Union 51 Health & Welfare*
- Portsmouth School Department
- Rhode Island Public Transit Authority
- Smithfield Public Schools*
- SOUTH KINGTOWN SCHOOL DEPARTMENT
- State of Rhode Island and Providence Plantations
- Teamsters Local 251 Health Services & Insurance Plan
- Textron Inc.
- The Town of North Providence
- Tiverton School Dept
- Town of Bristol*
- Town of Johnston*
- Town of Middletown*
- Town of Portsmouth
- Town of Smithfield*
- Town of West Warwick*
- UFCW and Participating Employers Interstate Health & Welfare Fund
- Women & Infants Hospital
- Woonsocket Education Department*
*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.