Fed government pays out $2.4B in early-retiree health benefits

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Fed gov't pays out $2.4B in early-retiree health benefits

WASHINGTON — A federal program subsidizing early-retiree health benefits has paid out more than $2.4 billion to employers across the country, including local government organizations and profitable Fortune 500 companies. It’s prompted criticism from Republican lawmakers who deem it a corporate “slush fund” and a “bailout” for state and local governments.

The subsidies are an often-overlooked provision of health care reform. They were meant to help those not yet eligible for Medicare by encouraging employers not to drop health benefits for workers who retire before age 65.
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Timothy Jost, a health-care expert and law professor at Washington and Lee University in Lexington, Va., said the program benefits retirees whose out-of-pocket insurance premiums might not be affordable.

“It’s not intended to be a welfare program for companies. We have enough of those,” Jost said. “Rather, it’s a program to help retirees, many of whom are in need and virtually all of whom would be in need if their retiree health benefits were terminated.”

http://www.dnj.com/article/20110619/NEWS01/110618004/Fed-gov-t-pays-out-2-4B-early-retiree-health-benefits?odyssey=mod|newswell|text|FRONTPAGE|s

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"...Much of the money has gone to large, profitable corporations. Telephone services provider AT&T has gotten $141.5 million, more than any other private company.
Verizon ranks second with $91.7 million, followed by GE’s $36.6 million and Boeing’s $34.1 million.


Rep. Marsha Blackburn, a Tennessee Republican who sits on the House subcommittee that oversees the program, said companies should have to show financial need to get government money. Some companies have used the subsidy to lower health-care premiums and lure employees into early retirement in order to downsize, she said.


...Companies can use the funds to lower their own costs, or they can pass the savings along to retirees by lowering premiums..."

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