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Answers to Questions on Early Retiree Reinsurance Program
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Updated May 2011
Q
| What is the Early Retiree Reinsurance Program?
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A
| ERRP is a federal program to provide reinsurance assistance to employer- and union-sponsored health insurance programs that include coverage for retirees who are not yet eligible for Medicare.
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Q
| What’s the difference between “insurance” and “reinsurance?”
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A
| Insurance uses direct premium dollars to pay claims for health care services covered in the program. Reinsurance uses funds other than direct premiums to reimburse the insurer when the insurer must cover high-cost claims.
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Q
| How much money is available through ERRP?
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A
| The program makes available $5 billion dollars between June 1, 2010, and Jan. 1, 2014, or until the funds run out, whichever is earlier.
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Q
| What’s a “high-cost” claim in this program?
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A
| These are claims between $15,000 and $90,000.
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Q
| Has PEBB identified these claims?
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A
| PEBB reviewed and identified claims that meet criteria and submitted its findings.
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| Q | How much will PEBB receive through the program? |
| A | The program will provide $3.5 million to PEBB
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Q
| How will PEBB use these funds?
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A
| PEBB will use the funds to stabilize premium rates in its health care plans.
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