Today, Rep. Lois Capps (D-Calif) announced that California received nearly $65 million in funding from the Early Retiree Reinsurance Program (ERRP) to reduce costs for both health plan sponsors and retirees in 2010. The Early Retiree Reinsurance Program was created by the Affordable Care Act to help early retirees aged 55-64 not yet eligible for Medicare keep their employer sponsored insurance. Too often, increasing costs force employers to drop retiree coverage. The Early Retiree Reinsurance program will reimburse employment based plans for up to 80% of claim costs for each early retiree, his/her spouse, or his/her dependents.
As of December 31, 2010, 518 health plan sponsors in California had been approved for participation in the program, and have collectively received nearly $65 million in funding. The following is a sample of program sponsors that have been approved for participation in the Early Retiree Reinsurance Program in California’s 23rd Congressional District: Agilent Technologies in Ventura County, Allergan, Inc. in Goleta, the County of Santa Barbara, the City of Santa Barbara, the City of Ventura, Guadalupe Union School District, Santa Barbara County Schools, Santa Barbara Community College district, Santa Maria-Bonita School District, Ventura County Schools Business Services Authority.
In addition, California’s Public Employees Retirement System (CALPERS) was awarded over $57 million to reduce costs for early retirees, their spouses, and dependents. CALPERS was able to leverage the funding from ERRP to lessen 2011 premium increases by three percent, saving up to $200 million and benefitting over 1.1 million employees in California.
“The verdict is in, and the Early Retiree Reinsurance Program has been a clear success for California and the 23rd Congressional district. Financial resources provided by the program have reduced costs for state and local governments, private companies, and, most important, retirees. Given the fiscal crises facing our state and local governments, this program provides much needed resources to help them balance their budgets, lessen cuts to important programs, and keep taxes low. The individual insurance market is often prohibitively expensive for early retirees who are not yet eligible for Medicare. This program will help guarantee that these people won’t be dropped from their current plans, bridging the gap between now and 2014 when the health insurance exchanges are fully operational,” said Capps.