The Obama administration will spend $5 billion to reimburse 80 percent of the companies' health insurance costs provided to early retirees who leave the US workforce between the ages of 55 to 64.
The program signed by President Barack Obama in March will cost up to $90,000 a year, for each early retiree.
About half of the companies in the Fortune 500 applied for US funds to help cover costs for early retirees, according to an official release on Monday. Those selected for businesses are Deutsche Bank, Americas Holding Corp., PepsiCo Inc., Pfizer Inc., AT&T Inc., and General Motors Co. According to Health and Human Services Secretary Katheleen Sebelius, the step has been taken to help employees keep up with the tough economic downturn and skyrocketing health-care costs. The Affordable Care Act's Early Retiree Reinsurance Program will make it a bit easier for employers to provide high-quality health benefits to their retirees.
Nonprofit organizations, state and local governments and schools were included with companies in the first round of reimbursement applications approved today. The money is offered on a first-come, first-served basis, and there is no limit on the number of eligible workers. Companies can get the money for any worker whose health-care costs topped $15,000 a year.
The first payments will go to companies in the next few months.