The Patient Protection and Affordable Care Act provided $5 billion to reimburse employers for a portion of the cost of early retiree health insurance coverage. The idea was to help assure that with the enactment of PPACA employers did not drop this coverage for early retirees and perhaps drive more Americans to government subsidized coverage. More than 5,400 plan sponsors had been accepted into ERRP as of March 17, 2011. As of May, 2011 more than $2.4 billion had been distributed. HHS stopped accepting ERRP applications on May 6 because of the expectation that payment to the enrolled employers would deplete the fund.
Senator John Kerry (D-Mass.) has introduced the Retiree Health Coverage Protection Act (S. 1088). The legislation would add $5 billion to the Early Retiree Reinsurance Program (ERRP), bringing total funding up to $10 billion. Senator Kerry believes additional funding “could be used to allow more employers to participate in the program and to further reduce the cost of the retiree health coverage.”
“Reduce the cost of the retiree health coverage?” Reducing the cost of anything does not mean shifting the cost to someone else, in this case taxpayers or more accurately U.S. Treasury bondholders, at least not outside of Washington, DC. This legislation will never become law, but it does provide an insight into the thinking of some (many) members of Congress. In the midst of a fiscal crisis, a $14 trillion and growing deficit and out of control spending, a U.S. Senator proposes giving $5 billion to some of the largest corporations in the U.S. while many of these organizations are criticized over record earnings and hoarding cash and, by the way, regularly continue to cut retiree benefits.
- What is the chance employers will drop health benefits in 2014? (quinnscommentary.com)