Indiana State University Newsroom

University among first employers to receive federal funds for retiree health care

August 31, 2010

Indiana State University President Dan Bradley traveled to Washington Tuesday to help federal officials launch a new program to pay for health care costs of retired workers.

The Early Retiree Insurance Program, administered by the U.S. Department of Health and Human Services, will provide $5 billion to employers and unions to help maintain coverage for retirees 55 and older who are not yet eligible for Medicare. The program was created by the Affordable Health Care Act, which was passed and signed into law earlier this year.

Dan Bradley joined Health and Human Services Secretary Kathleen Sebelius at a Washington news conference Tuesday to announce the funding.

Bradley thanked President Obama, Secretary Sebelius and Congress for making the program possible and said "the assistance will be immediately helpful during this time of declining state appropriations and growing student enrollment."

Indiana State has a tradition of providing eligible early retirees with a health benefits bridge until they become eligible for Medicare, Bradley said.

"This support will help ensure that we can continue to do that over the next few years. The result is good for our employees who are ready to retire but fear doing so without health insurance coverage," he said.

Vacancies created by early retirements will free up funds that can be reallocated to address staffing needs in growing programs such as allied health fields, allowing the university to better meet the needs of students by shifting personnel into high demand areas, Bradley said.

Indiana State has more than 150 retirees between the ages of 60 and 64, the ages the program is designed to cover, said Diann McKee, vice president for business affairs and finance.

Cigna, the company that administers the university's health care claims, estimates the total federal reimbursement for covered retirees could be between $300,000 and $500,000, McKee said. The plan will reimburse 80 percent of individual health care claims between $15,000 and $90,000, she said.

"In these tough economic times, it is difficult for employers to keep up with skyrocketing health care costs for employees and retirees. Many Americans who retire before they are eligible for Medicare see their life savings disappear because of medical bills and exorbitant rates in the individual health insurance market," said Sebelius. "The Affordable Care Act's Early Retiree Reinsurance Program will make it a little easier for employers to provide high-quality health benefits to their retirees as we work to put in place market reforms to lower costs for all."

Businesses and unions that are accepted into the program will receive reimbursement for medical claims from early retirees and their spouses, surviving spouses and dependents. Savings employers and unions realize as a result of the program can be used to reduce employer health care costs, provide premium relief to workers and families, or both, according to the legislation. The program ends on Jan. 1, 2014 when state health insurance exchanges are scheduled in place. In addition to Indiana State, the Vigo County School Corp. is among 74 Indiana organizations and 2,000 nationwide to receive first-round funding under the program.

The Department of Health and Human Services' Office of Consumer Information and Insurance Oversight is continuing to accept and review additional applications for funding.

In addition to announcing first-round funding under the program, HHS announced two new information tools for employers and unions interested in the Early Retiree Reinsurance Program - a new website ( and a new hotline (877-574-3777 or 877-574-ERRP). Employers and unions can find the application form and application instructions online, as well as other relevant guidance and regulations from HHS.

More information about the Early Retiree Reinsurance Program and an interactive map displaying the employers that have been accepted into the Early Retiree Reinsurance Program is available at

Photo: - Indiana State University President Dan Bradley

Media contact and writer: Dave Taylor, media relations director, Office of Communications and Marketing, Indiana State University, 812-237-3743 or