On May 5, 2010, the federal Department of Health and Human Services (“DHHS”) published an interim final rule providing guidance on the requirements for employers seeking federal reimbursement for health insurance costs attributable to early retirees and their covered dependents. Under the Patient Protection and Affordable Care Act (“PPACA”) which became effective on March 23, 2010, Congress set aside $5 billion to fund a program to provide reimbursements for the cost of health coverage for early retirees aged 55 and above, but not eligible for Medicare, under employer-sponsored group health plans.

Employers providing early retiree health coverage should begin preparing now for the application process if they want to pursue reimbursement. The DHHS is anticipated to publish its application forms by June 1, 2010. The attached article contains information on the application process. Also attached to this email is a copy of the DHHS interim final rule regarding the Early Retiree Program.