Portsmouth to Receive Funds for Early Retiree Insurance Claims

The Town of Portsmouth has been approved for the federal Early Retiree Reinsurance Program, says Finance Director David P. Faucher.

Portsmouth is among six Rhode Island applicants chosen for this program, which will help fund health insurance claims for former town employees who retire before they turn 65 years old.

"Hopefully, this is very good news, but we don't know the extent just yet," Faucher said. "It's based on reimbursements for medical claims between $15,000 and $90,000. We could apply for reimbursements as part of this."

According to the town's finance director, town employees are currently checking into how many medical claims fall into the above-mentioned price range.

"I've asked Blue Cross & Blue Shield how many fall into that category," Faucher said. "I'm waiting to hear back. Any savings would help."

Blue Cross & Blue Shield of Rhode Island was also approved for this federal program for their own employees.

The grant could help the town pay for any medical claims between $15,000 and $90,000.

Currently, 37 former town employees fall into the category of those who retired before age 65. Among them are mostly former employees of the Portsmouth police and fire departments, Faucher said.

"You can also apply the grant towards future premium increases for health insurance," said the town finance director.

Two thousand employers and unions nationwide—including Lifespan, Textron, Cookson America and Brown University—were chosen for this program in the first round of applications. The government is still accepting applications.

The Early Retiree Reinsurance Program provides 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. The program was authorized in the Affordable Care Act.

Congress appropriated funding of $5 billion for this temporary program, which became effective June 1.

The program ends no later than Jan. 1, 2014. Sponsors will be reimbursed for certain claims between $15,000 and $90,000 (with those amounts being indexed for plan years starting on or after Oct. 1, 2011).

The purpose of the reimbursement is to make health benefits more affordable for plan participants and sponsors so that health benefits are accessible to more Americans than they would otherwise be without this program.

For information about the program, visit www.errp.gov.