Reform Alert - News from the Blues' Office of National Health Reform

Blue Cross Blue Shield of Michigan and Blue Care Network to assist employers in applying for early retiree reinsurance

April 27, 2010

Blue Cross Blue Shield of Michigan and Blue Care Network to assist employers in applying for early retiree reinsurance

Some Blue Cross Blue Shield of Michigan and Blue Care Network customers may be eligible to receive early retiree reinsurance funds made available by the recently passed Patient Protection and Affordable Care Act. Blue Cross Blue Shield of Michigan and Blue Care Network are well prepared to assist group customers in managing the early retiree reinsurance application and funds recovery process.

The reform law enables employers that offer health coverage for early retirees between the ages of 55 and 64 to apply for reimbursement of 80 percent of early retiree costs between $15,000 and $90,000. The Department of Health and Human Services is developing an online application process that we anticipate will be available in June. The funds are expected to be dispersed to qualified employers on a first-come, first-served basis. There are $5 billion available for early retiree reinsurance.

While the Department of Health and Human Services has yet to provide the actual application needed to apply for early retiree reinsurance, it has identified information that will likely be required:

  • An acknowledgement that the information in the application is being provided to obtain federal funds 
  • The projected amount of reimbursement to be received for the first two plan year cycles with specific amounts for each plan year 
  • A statement that policies and procedures are in place to detect and reduce fraud, waste, and abuse 
  • A description of the procedures or programs the employer has in place to generate cost savings with respect to chronic and high-cost conditions 
  • An assurance that the employer has a written agreement with its health insurance carrier or employment-based plan to provide Health and Human Services information and data necessary to verify compliance with program requirements 
  • A summary of how the employer will use the money to lower premiums, deductibles, coinsurance or copayments in future years 

Group customers and agents representing group customers that offer early retiree health coverage are encouraged to contact their Blue Cross Blue Shield of Michigan or Blue Care Network sales representative for more information about the early retiree reinsurance process, timelines and applicable fees.

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.

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