Most large employers will seek retiree reinsurance under PPACA, but where does the money go?

According to a new survey from Hewitt Associates, 76% of large employers will seek their portion of the $5 billion reinsurance fund for early retiree health care expenses created under PPACA, but many are not sure how they will use the funds.

Hewitt estimates that the average federal reimbursement will represent between $2,000 and $3,000 per pre-65 retiree per year, or approximately 25 percent to 35 percent of total health care costs. As an example, for a company that covers 1,000 pre-65 retirees, participation in the ERRP could result in $2 million to $3 million in reinsurance proceeds per year.