---
kind: "section"
citation: "42 U.S.C. § 18002"
title: "42"
title_heading: "The Public Health and Welfare"
number: "18002"
heading: "Reinsurance for early retirees"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/18002"
units:
  - "Chapter 157 — Quality, Affordable Health Care for All Americans"
  - "Subchapter I — Immediate Actions to Preserve and Expand Coverage"
---

# §18002. Reinsurance for early retirees

- (a) **Administration—**
  - (1) **In general—** Not later than 90 days after March 23, 2010, the [Secretary](/usc/42/18024.md?p=c) shall establish a temporary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing [health insurance coverage](/usc/42/18021.md?p=b-2) to early retirees (and to the eligible spouses, surviving spouses, and dependents of such retirees) during the period beginning on the date on which such program is established and ending on January 1, 2014.
  - (2) **Reference—** In this section:
    - (A) **Health benefits—** The term “health benefits” means medical, surgical, [hospital](/usc/42/300s–3.md?p=1), prescription [drug](/usc/42/11851.md?p=4), and such other benefits as shall be determined by the [Secretary](/usc/42/18024.md?p=c), whether self-funded, or delivered through the purchase of insurance or otherwise.
    - (B) **Employment-based plan—** The term “employment-based plan” means a group benefits plan providing health benefits that—
      - (i) is—
        - (I) maintained by one or more current or former employers (including without limitation any [State](/usc/42/18024.md?p=d) or local government or political subdivision thereof or any [agency](/usc/42/8262.md?p=1) or instrumentality of any of the foregoing), employee organization, a voluntary employees’ beneficiary association, or a committee or board of individuals appointed to administer such plan; or
        - (II) a multiemployer plan (as defined in [section 1002(37) of title 29](/usc/29/1002.md?p=37)); and
      - (ii) provides health benefits to early retirees.
    - (C) **Early retirees—** The term “early retirees” means individuals who are age 55 and older but are not eligible for coverage under title XVIII of the Social Security Act [[42 U.S.C. 1395](/usc/42/1395.md) et seq.], and who are not active employees of an employer maintaining, or currently contributing to, the employment-based plan or of any employer that has made substantial contributions to fund such plan.
- (b) **Participation—**
  - (1) **Employment-based plan eligibility—** A participating employment-based plan is an employment-based plan that—
    - (A) meets the requirements of [paragraph (2)](#b-2) with respect to health benefits provided under the plan; and
    - (B) submits to the [Secretary](/usc/42/18024.md?p=c) an application for participation in the program, at such time, in such manner, and containing such information as the [Secretary](/usc/42/18024.md?p=c) shall require.
  - (2) **Employment-based health benefits—** An employment-based plan meets the requirements of this paragraph if the plan—
    - (A) implements programs and procedures to [generate](/usc/42/2021b.md?p=8) cost-savings with respect to participants with chronic and high-cost conditions;
    - (B) provides documentation of the actual cost of medical claims involved; and
    - (C) is certified by the [Secretary](/usc/42/18024.md?p=c).
- (c) **Payments—**
  - (1) **Submission of claims—**
    - (A) **In general—** A participating employment-based plan shall submit claims for reimbursement to the [Secretary](/usc/42/18024.md?p=c) which shall contain documentation of the actual costs of the items and services for which each claim is being submitted.
    - (B) **Basis for claims—** Claims submitted under [subparagraph (A)](#c-1-A) shall be based on the actual amount expended by the participating employment-based plan involved within the plan year for the health benefits provided to an early retiree or the spouse, surviving spouse, or dependent of such retiree. In determining the amount of a claim for purposes of this subsection, the participating employment-based plan shall take into account any negotiated price concessions (such as discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations) obtained by such plan with respect to such health benefit. For purposes of determining the amount of any such claim, the costs paid by the early retiree or the retiree’s spouse, surviving spouse, or dependent in the form of deductibles, co-payments, or co-insurance shall be included in the amounts paid by the participating employment-based plan.
  - (2) **Program payments—** If the [Secretary](/usc/42/18024.md?p=c) determines that a participating employment-based plan has submitted a valid claim under [paragraph (1)](#c-1), the [Secretary](/usc/42/18024.md?p=c) shall reimburse such plan for 80 percent of that portion of the costs attributable to such claim that exceed $15,000, subject to the limits contained in [paragraph (3)](#c-3).
  - (3) **Limit—** To be eligible for reimbursement under the program, a claim submitted by a participating employment-based plan shall not be less than $15,000 nor greater than $90,000. Such amounts shall be adjusted each fiscal year based on the percentage increase in the Medical Care Component of the Consumer Price Index for all urban consumers (rounded to the nearest multiple of $1,000) for the year involved.
  - (4) **Use of payments—** Amounts paid to a participating employment-based plan under this subsection shall be used to lower costs for the plan. Such payments may be used to reduce premium costs for an entity described in [subsection (a)(2)(B)(i)](#a-2-B-i) or to reduce premium contributions, co-payments, deductibles, co-insurance, or other out-of-pocket costs for plan participants. Such payments shall not be used as general revenues for an entity described in [subsection (a)(2)(B)(i)](#a-2-B-i). The [Secretary](/usc/42/18024.md?p=c) shall develop a mechanism to monitor the appropriate use of such payments by such entities.
  - (5) **Payments not treated as income—** Payments received under this subsection shall not be included in determining the gross income of an entity described in [subsection (a)(2)(B)(i)](#a-2-B-i) that is maintaining or currently contributing to a participating employment-based plan.
  - (6) **Appeals—** The [Secretary](/usc/42/18024.md?p=c) shall establish—
    - (A) an appeals process to permit participating employment-based plans to appeal a determination of the [Secretary](/usc/42/18024.md?p=c) with respect to claims submitted under this section; and
    - (B) procedures to protect against fraud, waste, and abuse under the program.
- (d) **Audits—** The [Secretary](/usc/42/18024.md?p=c) shall conduct annual audits of claims data submitted by participating employment-based plans under this section to ensure that such plans are in compliance with the requirements of this section.
- (e) **Funding—** There is appropriated to the [Secretary](/usc/42/18024.md?p=c), out of any moneys in the Treasury not otherwise appropriated, $5,000,000,000 to carry out the program under this section. Such funds shall be available without fiscal year limitation.
- (f) **Limitation—** The [Secretary](/usc/42/18024.md?p=c) has the authority to stop taking applications for participation in the program based on the availability of funding under [subsection (e)](#e).

## Source credit

(Pub. L. 111–148, title I, § 1102, title X, § 10102(a), Mar. 23, 2010, 124 Stat. 143, 892.)

## Notes

### Editorial Notes

### References in Text

The Social Security Act, referred to in subsec. (a)(2)(C), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title XVIII of the Act is classified generally to subchapter XVIII (§ 1395 et seq.) of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables.

### Amendments

2010—Subsec. (a)(2)(B). Pub. L. 111–148, § 10102(a)(1), substituted “group benefits plan providing health benefits” for “group health benefits plan” in introductory provisions.

Subsec. (a)(2)(B)(i)(I). Pub. L. 111–148, § 10102(a)(2), inserted “or any agency or instrumentality of any of the foregoing” after “political subdivision thereof”.