The Department of Health and Human Services says reimbursement application forms will be ready in June just prior to the start of a temporary federal program in which the government will partially repay employers for a portion of their retiree health care claims.
Under that program, authorized as part of the massive health care reform measure President Barack Obama signed into law last month, the federal government will pay $5 billion to reimburse employers with health care plans covering early retirees, defined as those between ages 55 and 64. Specifically, the government will reimburse employers 80 percent of each claim between $15,000 and $90,000.
In its fact sheet, HHS says medical, surgical, hospital and prescription costs are eligible for tax-free reimbursement.
However, employers that receive government payments will be required to use the proceeds to lower early retirees’ health care costs, such as by reducing premium contributions, co-payments or deductibles.
Congress allocated $5 billion for the program, which will begin June 23 of this year and end January 1, 2014. However, unless Congress authorizes additional funding, the $5 billion fund is expected to be exhausted quickly.
A fact sheet is available online.