Federal Health Care Reform Update - Young adults and early retirees

Federal health care reform has brought about the issuance of rules from federal agencies regarding covering young adults to age 26 and a new program designed to assist communities that provide health care coverage to early retirees.

Young adults - The Departments of Treasury, Health and Human Services and Labor have issued an interim final rule that allows young adults to remain on their parents’ health insurance policies up to age 26. 

A White House-issued fact sheet urges employers to make this coverage available to their employees, which would extend coverage to young adults regardless of their dependent status, place of residence or marital status. Cities and towns, like any other employer, are required to follow this rule. According to the White House fact sheet, the rule is set to go into effect September of this year, however, many insurers including BCBSM are extending coverage immediately.

Early retirees -  The Department of Health and Human Services has also announced a temporary program, the Early Retiree Reinsurance Program (EERP), designed to make it easier for employers to provide health insurance coverage to early retirees. 

Under the program, communities that provide their retireers with health care coverage (at least 55 years of age and not yet eligible for Medicare) are eligible to receive reimbursements for up to 80 percent of the cost of certain claims totaling between $15,000 and $90,000.  $5 billion in total is available through the program.

To receive reimbursements, plan sponsors must provide retirees with coverage that meets certain criteria. Health care plans must be employer sponsored; provide basic benefits that are self-funded or provided by third party insurers; generate cost savings through treatment of chronic or high-cost conditions, such as cancer; and reduce costs or eliminate co-payments for patients.

The program will officially begin on June 1, 2010 and run through January 1, 2014. See a copy of the press release  and fact sheet announcing the program.  

Arnold Weinfeld follows federal issues for the Michigan Municipal League. He can be reached at 517-908-0304 or by e-mail.