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About 2,000 employers qualify for federal subsidies for retiree healthcare

Businesses, labor unions and state and local governments are seeking aid under a $5-billion program in the new healthcare law that encourages employers to keep insurance plans for retirees ages 55 to 64.

September 01, 2010|By Noam N. Levey, Los Angeles Times

Reporting from Washington — The Obama administration announced Tuesday that nearly 2,000 businesses, labor unions and state and local governments have qualified for federal subsidies to offset the cost of providing their retirees and dependents with medical insurance, another early benefit of the new healthcare law.

Among those taking advantage of the program are more than half of the nation's Fortune 500 companies, many major unions and governmental bodies in every state, according to the administration.

Several states that are suing to overturn the healthcare law are among those that plan to seek the aid, including Alaska, Arizona, Idaho, Indiana, Louisiana, Michigan, Nebraska and Nevada. All but Louisiana are represented by Republicans in the lawsuit challenging the law.

Democrats added the $5-billion program to the healthcare law to encourage employers to keep their insurance plans for retirees ages 55 to 64 until 2014, when the law will guarantee that all Americans can buy insurance.

Employers and unions that offer retiree plans will be able to get reimbursed for 80% of an individual's medical claims between $15,000 and $90,000 a year.

It is unclear if the amount of money set aside for such aid will last until 2014, however. A report by the nonpartisan Employee Benefit Research Institute estimated in June that the $5 billion would be exhausted in 2012.

If that should happen, Congress would have to appropriate more money to keep the program operating.

More information about the Early Retiree Reinsurance Program is available at

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