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State: small businesses may be reimbursed for retiree health care

The Idaho Department of Insurance wants small businesses to know that they may be eligible for reimbursement for the medical costs incurred by retirees age 55 and older who do not qualify for Medicare starting on June 1, when a provision of the new federal health care reform law kicks in.

The Patient Protection and Affordable Care Act, signed into law on March 23, will reimburse employer-sponsored health plans up to 80 percent of the costs generated by retirees between $15,000 and $90,000 annually. The maximum is $60,000 per person.

Only medical expenses incurred after June 1 will be eligible for reimbursement under the program, according to a news release. However, claims incurred between the start of the plan year and June 1 will be credited towards the $15,000 reimbursement threshold.

Employers can apply for the program through the Department of Health and Human Services. Carrier plans must be approved and will be subject to audits to assure fiscal integrity. Self-funded and insured plans can apply, including plans sponsored by private entities, state and local government, nonprofits, religious entities, unions and other employers.

This program ends on January 1, 2014, when early retirees will be able to choose from coverage options that will be available in health insurance exchanges.

“Currently, Americans who retire without employer-sponsored insurance and before they are eligible for Medicare have difficulty finding affordable plans that will not cause financial hardship,” said Bill Deal, insurance department director, in a statement. “The Affordable Care Act will provide $5 billion in financial assistance to employers to help them maintain coverage for early retirees.”

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