Read how an Early Retiree Subsidy Program works, including eligibility and the application process.

1. HEALTHCARE REFORM
2010
Early Retiree Subsidy Program

2. Overview of the EARLY RETIREE SUBSIDY PROGRAM
enacted as part of the PATIENT PROTECTION AND
AFFORDABLE CARE ACT
• On March 23, 2010, the Patient Protection and Affordable Act was
signed into law. Included in this health insurance reform law is a
provision that established the Early Retiree Subsidy Program.
• The Early Retiree Subsidy Program provides reimbursement to
participating sponsors for a portion of the costs of providing health
coverage to early retirees who are between the ages of 55 and 65
(and eligible spouses and dependents of such retirees).
• The law requires the Secretary of Health and Human services to
establish a program within 90 days of enactment, which is June 23,
2010. We expect the program to be established by June 1, 2010.
The program will expire on January 1, 2014 and funding for the
program is limited to $5 billion dollars.

3. Who is ELIGIBLE to receive the Subsidy
Any retiree 55 to 65 year old whose healthcare spend exceeds $15,000
per year for both medical and prescription claims.
The plan is eligible for up to 80% of the “excess costs” minus
negotiated price concessions for health benefits between $15,000 and
$90,000.
The “excess costs” of spouses and dependents of early retirees will
also qualify for the Early Retiree Subsidy.
For example, if you had an early retiree with $45,000 in medical and
prescription claims during the year, the Early Retiree Subsidy would be
$45,000 - $15,000 x 80% = $24,000 reimbursement to the plan.

4. Application Process
The Applicant (Health Plan) must submit an application to the Secretary
HHS to participate in this program, which is signed by an authorized
representative of the applicant who certifies that the information
contained in the application is true and accurate to the best of the
authorized representative’s knowledge and belief.
An Applicant must submit an application for each plan for which it will
submit a reimbursement request.
In connection with each application the Applicant must submit the
following: Applicant’s Tax Identification Number, Applicant’s name and
address and Contact name, telephone number and email address.
The Applicant must submit an assurance that the sponsor has a written
agreement with its health insurance issuer or employment based plans
regarding disclosure of information to the Secretary.

5. Application Process Continued
The Applicant must submit an acknowledgment that the information
in the application is being provided to obtain Federal funds and that all
subcontractors acknowledge that information provided in connection
with a subcontract is used for the purpose of obtaining Federal Funds.
The Applicant must submit an attestation that polices and procedures
are in place to detect and reduce fraud, waste and abuse and that the
sponsor will produce the policies and procedures, and necessary
information, records and data, upon request by the Secretary to
substantiate existence of the policies and procedures and their
effectiveness.

6. Application Process Continued
A summary indicating how the applicant will use any reimbursement
received under the program to meet the requirements of the program,
including:
How the reimbursement will be used to reduce health plan costs (copays,
deductibles, out of pocket costs, etc.)
What procedures or programs the sponsor has in place that have generated or have
the potential to generate cost savings with respect to plan participants with chronic
and high cost conditions
How the sponsor will use the reimbursement to maintain its level of contribution to
the applicable plan

7. Application Process Continued
Projected amount of reimbursement to be received under the
program for the first two plan year cycles with specific amounts for
each of the two cycles.
A list of benefit options under the employment based plan that any
early retiree for whom the sponsor receives program reimbursement
may be claimed.
Any other information the Secretary requires.

8. QUESTIONS
Contact Susan Schrembs at Premier Consulting Assoc. at
716-688-5600
Or
Eric Singer at Part D Advisors at
888-207-6478