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Statutory Text

SEC. 1102 [42 U.S.C. 18002]. REINSURANCE FOR EARLY RETIREES.
(a) ADMINISTRATION.—
(1) IN GENERAL.—Not later than 90 days after the date of
enactment of this Act, the Secretary shall establish a temporary
reinsurance program to provide reimbursement to participating
employment-based plans for a portion of the cost of
providing health insurance coverage to early retirees (and to
the eligible spouses, surviving spouses, and dependents of such
retirees) during the period beginning on the date on which
such program is established and ending on January 1, 2014.
(2) REFERENCE.—In this section:
(A) HEALTH BENEFITS.—The term ‘‘health benefits’’
means medical, surgical, hospital, prescription drug, and
such other benefits as shall be determined by the Secretary,
whether self-funded, or delivered through the purchase
of insurance or otherwise.
(B) EMPLOYMENT-BASED PLAN.—[As revised by section
101012(a)] The term ‘‘employment-based plan’’ means a
group benefits plan providing health benefits that—
(i) is—
(I) maintained by one or more current or
former employers (including without limitation
any State or local government or political subdivision
thereof or any agency or instrumentality of
any of the foregoing), employee organization, a
voluntary employees’ beneficiary association, or a
committee or board of individuals appointed to administer
such plan; or
(II) a multiemployer plan (as defined in section
3(37) of the Employee Retirement Income Security
Act of 1974); and
(ii) provides health benefits to early retirees.
(C) EARLY RETIREES.—The term ‘‘early retirees’’ means
individuals who are age 55 and older but are not eligible
for coverage under title XVIII of the Social Security Act,
and who are not active employees of an employer maintaining,
or currently contributing to, the employmentbased
plan or of any employer that has made substantial
contributions to fund such plan.
(b) PARTICIPATION.— (1) EMPLOYMENT-BASED PLAN ELIGIBILITY.—A participating
employment-based plan is an employment-based plan that—
(A) meets the requirements of paragraph (2) with respect
to health benefits provided under the plan; and
(B) submits to the Secretary an application for participation
in the program, at such time, in such manner, and
containing such information as the Secretary shall require.
(2) EMPLOYMENT-BASED HEALTH BENEFITS.—An employment-based
plan meets the requirements of this paragraph if
the plan—
(A) implements programs and procedures to generate
cost-savings with respect to participants with chronic and
high-cost conditions;
(B) provides documentation of the actual cost of medical
claims involved; and
(C) is certified by the Secretary.
(c) PAYMENTS.—
(1) SUBMISSION OF CLAIMS.—
(A) IN GENERAL.—A participating employment-based
plan shall submit claims for reimbursement to the Secretary
which shall contain documentation of the actual
costs of the items and services for which each claim is
being submitted.
(B) BASIS FOR CLAIMS.—Claims submitted under subparagraph
(A) shall be based on the actual amount expended
by the participating employment-based plan involved
within the plan year for the health benefits provided
to an early retiree or the spouse, surviving spouse,
or dependent of such retiree. In determining the amount
of a claim for purposes of this subsection, the participating
employment-based plan shall take into account any negotiated
price concessions (such as discounts, direct or indirect
subsidies, rebates, and direct or indirect remunerations) obtained by such plan with respect to such health
benefit. For purposes of determining the amount of any
such claim, the costs paid by the early retiree or the retiree’s
spouse, surviving spouse, or dependent in the form of
deductibles, co-payments, or co-insurance shall be included
in the amounts paid by the participating employment-based
plan.
(2) PROGRAM PAYMENTS.—If the Secretary determines that
a participating employment-based plan has submitted a valid
claim under paragraph (1), the Secretary shall reimburse such
plan for 80 percent of that portion of the costs attributable to
such claim that exceed $15,000, subject to the limits contained
in paragraph (3).
(3) LIMIT.—To be eligible for reimbursement under the program,
a claim submitted by a participating employment-based
plan shall not be less than $15,000 nor greater than $90,000.
Such amounts shall be adjusted each fiscal year based on the
percentage increase in the Medical Care Component of the
Consumer Price Index for all urban consumers (rounded to the
nearest multiple of $1,000) for the year involved.
(4) USE OF PAYMENTS.—Amounts paid to a participating
employment-based plan under this subsection shall be used to
lower costs for the plan. Such payments may be used to reduce
premium costs for an entity described in subsection (a)(2)(B)(i)
or to reduce premium contributions, co-payments, deductibles,
co-insurance, or other out-of-pocket costs for plan participants.
Such payments shall not be used as general revenues for an
entity described in subsection (a)(2)(B)(i). The Secretary shall
develop a mechanism to monitor the appropriate use of such
payments by such entities.
(5) PAYMENTS NOT TREATED AS INCOME.—Payments received
under this subsection shall not be included in determining
the gross income of an entity described in subsection
(a)(2)(B)(i) that is maintaining or currently contributing to a
participating employment-based plan.
(6) APPEALS.—The Secretary shall establish—
(A) an appeals process to permit participating employment-based
plans to appeal a determination of the Secretary
with respect to claims submitted under this section;
and
(B) procedures to protect against fraud, waste, and
abuse under the program.
(d) AUDITS.—The Secretary shall conduct annual audits of
claims data submitted by participating employment-based plans
under this section to ensure that such plans are in compliance with
the requirements of this section.
(e) FUNDING.—There is appropriated to the Secretary, out of
any moneys in the Treasury not otherwise appropriated,
$5,000,000,000 to carry out the program under this section. Such
funds shall be available without fiscal year limitation.
(f) LIMITATION.—The Secretary has the authority to stop taking
applications for participation in the program based on the availability
of funding under subsection (e).