42 U.S.C. § 18002 — Reinsurance for early retirees

(a) Administration (1) No later than 90 days after March 23, 2010, the Secretary had to set up a temporary reinsurance program. It reimbursed participating employer health plans for part of what they spent covering early retirees — and those retirees' eligible spouses, surviving spouses, and dependents — from the day the program started until January 1, 2014. (2) Some terms used here: "Health benefits" means medical, surgical, hospital, and prescription drug benefits, plus anything else the Secretary decides counts, whether the employer self-funds them or buys insurance. An "employment-based plan" is a group health benefits plan that either (I) is run by one or more employers (including state/local governments), an employee organization, a voluntary employees' beneficiary association, or a committee that administers it, or (II) is a multiemployer plan under 29 U.S.C. § 1002(37) — and that provides health benefits to early retirees. "Early retirees" are people age 55 or older who aren't yet eligible for Medicare (Title XVIII of the Social Security Act) and who are no longer actively working for the employer that sponsors the plan. (b) Which plans can participate (1) A plan qualifies to participate if it (A) meets the requirements below and (B) submits an application to the Secretary in the required form. (2) To meet the requirements, a plan must: (A) have programs to save money on participants with chronic or high-cost conditions; (B) document the actual cost of medical claims; and (C) be certified by the Secretary. (c) How payments work (1) A participating plan submits claims to the Secretary with documentation of the actual costs involved. The claim amount is based on what the plan actually spent that plan year on an early retiree's (or their spouse's, surviving spouse's, or dependent's) health benefits — after subtracting any discounts, rebates, or other price concessions the plan negotiated. Costs the retiree paid through deductibles, copayments, or coinsurance still count toward the claim amount. (2) If the Secretary finds a claim valid, the plan gets reimbursed for 80% of the costs above $15,000 for that claim, subject to the limit below. (3) To qualify for reimbursement, a claim has to be at least $15,000 and no more than $90,000. Those two dollar amounts go up every year based on the medical care portion of the Consumer Price Index, rounded to the nearest $1,000. (4) Plans must use the payments to lower their costs — for example, by cutting premiums or reducing out-of-pocket costs for participants. They cannot use the money as general revenue, and the Secretary has to monitor that the money is being used properly. (5) These payments don't count as income for the employer or organization that runs the plan. (6) The Secretary must set up (A) an appeals process for plans that disagree with a decision, and (B) procedures to prevent fraud, waste, and abuse. (d) Audits The Secretary must conduct an audit every year of the claims data plans submit, to make sure plans are following this section's rules. (e) Funding Congress appropriated $5,000,000,000 for this program, available without a yearly limit. (f) Limitation The Secretary can stop accepting new applications if needed to stay within the available funding.