By Jason Millman - 03/02/11 02:00 PM EST
According to the HHS report, the department had paid out $535 milion by the end of 2010. Twenty percent of plans will use the ERRP reimbursements to reduce the sponsor’s health benefit or premium costs, 20 percent will use the money to reduce offset increases to plan participants' premium and other healthcare costs, and 60 percent will use the money for both.
HHS said the temporary program, which ends in 2014 when new state insurance exchanges open, is necessary because large firms had been increasingly dropping retiree healthcare coverage before Medicare eligibility kicks in.
"The Early Retiree Reinsurance Program is helping to control health care costs and protect coverage for early retirees and their families," HHS Secretary Kathleen Sebelius said in a statement. "This program is providing critical financial relief to help states, private employers and other organizations preserve access to affordable health coverage for millions of Americans."