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Obama Administration Announces Program to Lower Coverage Costs for Early Retirees

By John Reichard, CQ HealthBeat Editor

May 4, 2010 -- The Obama administration announced Tuesday the launch of a temporary program to make it easier for employers to offer health coverage to early retirees.

The program was created under the health care overhaul law with $5 billion in funding. The White House said that employers who are accepted into the program will receive reinsurance reimbursement for medical claims for retirees age 55 and older who are not eligible for Medicare. The program also applies to claims filed by their spouses, surviving spouses and dependents.

The program allows employers to claim reimbursement for up to 80 percent of claims costs between $15,000 and $90,000. Employers can begin applying at the end of June for reimbursement, according to HHS.

The White House said that "both self-funded and insured plans can apply, including plans sponsored by private entities, state and local governments, nonprofits, religious entities, unions, and other employers."

The Business Roundtable, which includes the CEOs of many large companies, praised the program.

"While health care costs are the number one cost pressure facing our members, we are committed to providing coverage to our more than 35 million employees, retirees and their families," said John J. Castellane, the president of the group. The program " reduces costs and allows many of our member companies to continue providing this critical coverage," he said.

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