Planning to benefit from the early retiree reinsurance program? Get going, there is no second chance.

If I screw this up my boss is going to fry me!

Whether you are an employer or retiree hoping to see his or her health insurance premium stabilized, your chances of getting your share of the five billion dollar early retiree reinsurance pool depends on your speed and accuracy.

There is no room for error. Remember, you are competing with the states, union plans and other large employers. Make a mistake in filing and you go to the back of the line, file too late and the money is gone.  The much touted windfall for employers (intended to keep them providing early retiree coverage at least until 2014) may be a slight breeze for most.

Here is a good article from Business Insurance:

…“How long will the funds last?  That’s a great question. No one has a firm answer,” said Michael Morfe, a senior vp with Aon Consulting in Somerset, N.J. While no one can predict how long the federal funds will last, some benefit experts say they could be exhausted in as little as 18 months…

And under rules published last week by the Department of Health and Human Services, the agency that will administer the program, the program could close even before some employers get their applications in…

Under the HHS rules, employers will be required to project reimbursement amounts during a two-year period. HHS will use those projections to determine “if and when we should stop accepting funding applications,” the agency said in the rules…Ultimately, the bulk of the reimbursements may go to a small number of sponsors with very large plans, Mr. Stover said…

The design of some early retiree health care plans—and the rules attached to the federal program—may result in some employers not even trying to get reimbursed. Under the HHS rules, employers must maintain “the level of effort in contributing to support” the plans. The rules don’t specify how long this maintenance of effort must be applied. In addition, employers must apply the reimbursement to reduce their own costs, the costs of plan participants or a combination of the two. An employer could not simply pocket the reimbursement, said Fran Bruno, a consultant with Mercer L.L.C. in Washington…

Still, the economic benefits for some employers and their early retirees could be considerable. Buck Consultants, for example, estimates that between 10% and 20% of early retiree health care plan participants would pierce the $15,000 claims threshold, setting the stage for 80% reimbursement of claims above that amount.

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