June 30, 2011
--- The majority of respondents to a recent HighRoads survey indicated
the Early Retiree Reinsurance Program (ERRP) subsidy either buys time to
re-evaluate retiree medical plan strategies or has little impact at all. ---
Sixty percent of respondents said the ERRP subsidy has little impact on
their retiree medical strategy. Of the companies for which the ERRP
subsidy plays into their retiree medical strategy, most indicate that
the subsidy buys them time to make changes to the retiree medical
strategy.
The majority of respondents (60%) also said that the
elimination of the deduction for retiree prescription drug expenses will
not result in a change to their retiree prescription drug benefit.
The survey found that 79% of respondents receive the ERRP subsidy.
ERRP, authorized by the Affordable Care Act (ACA),
allocated $5 billion dollars to provide reimbursement to participating
employment-based plans for a portion of the costs of health benefits for
early retirees and early retirees' spouses, surviving spouses, and
dependents.
In April, the Centers for Medicare & Medicaid Services
(CMS) announced that, due to the overwhelming response, the Early
Retiree Reinsurance Program will no longer be accepting applications
after May 5, 2011, as it will be out of money (see "Early Retiree Reinsurance Program to End").
The survey report is here.
Rebecca Moore