In today’s business world employers all across the county are struggling with the decisions of how to operate as lean as possible without taking away anything from their employees. With regards to an employers retirees there are some options that organizations can use to help offset some of the costs. Two important and helpful programs that an employer should look into that help save money on healthcare costs are theRetiree Drug Subsidy Program (RDS) and the Early Retiree Reimbursement Program (ERRP)
In 2005 The Centers for Medicare & Medicaid Services (CMS) introduced the Retiree Drug Subsidy (RDS) program. What the program does is reimburse municipalities, unions and private employers for a portion of their eligible expenses for retiree prescription drug benefits. Over the years employers have slowly but steadily cut back on their prescription drug coverage for retirees. CMS introduced this program with the goal of encouraging employers to continue providing high-quality prescription drug coverage to their retirees. The nice part about this program is that it is very straightforward and there is usually little to no benefit design changes to current coverage.
Another more recent, yet temporary program that is offered to employers to help with healthcare costs is the Early Retiree Reimbursement Program. The Program was established by the Affordable Care Act, which was a part of the Healthcare Reform Bill passed in early 2010. The program provides $5 billion in financial assistance to employers to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare. The program will reimburse employers 80 percent of all medical costs per retiree, which includes their spouses and dependents. The cost must however be between the $15,000-$90,000 worth of expenses. Employers can use the savings to either reduce their own health care costs, provide premium relief to their workers and families or a combination of both.
Figuring out how to operate efficiently and effectively without cutting into employee benefits is a real challenge. It is becoming even more important in this economy to continue to search out and explore any available option for your organization that keeps it competitive and keeps your employees happy. There are options out there that are meant to help employers save money, for answers to questions about these programs visit rdsservices.us.