The HHS released a $5 billion blueprint to help businesses cover the healthcare costs for those employees who retire prior to becoming eligible for Medicare.
Under the temporary program, which will run until 2014—the year coverage options are expanded—HHS will reimburse qualified employers up to 80% of claims costs for health benefits between $15,000 and $90,000. Early retirees 55 or older, their spouses and dependents are eligible.
“Rising costs have made it hard for employers to provide quality, affordable health insurance for workers and retirees,” HHS Secretary Kathleen Sebelius said in a written statement. “As a result, many Americans who retire before they are eligible for Medicare are worried about losing health insurance coverage through their former employers, putting them at risk of losing their life savings due to medical costs.”
The percentage of large firms providing workers with retiree coverage has dropped from 66% in 1988 to 31% in 2008, according to data compiled by HHS.
The announcement continues what has been a rapid-fire implementation schedule for health insurance reforms dictated by the new reform law. Over the past several weeks, the HHS has called on insurers to adopt measures that allow young adults to stay on their parents' coverage for a longer period of time and policies to end most rescissions.
The federal dollars will be distributed on a first-come, first-served basis, according to administration officials. The program itself begins immediately and runs until Dec. 31, 2013.