In a little-publicized report on a little-known provision in the health-care law, the administration detailed $1.8 billion in reimbursements to corporations, unions, state and local governments and religious organizations to help them pay for health-care benefits.
The law established the Early Retiree Reinsurance Program. It provides up to $5 billion for “employers to help them maintain coverage for early retirees age 55 and older who are not yet eligible for Medicare,” according to an administration fact sheet.
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Its funding is designed to last until 2014, when the bulk of the health-care law’s benefits begin. Less than a year after becoming law, the program has already spent more than a third of that money.
The program has reimbursed about $1 billion combined to the states of Michigan, Texas, New Jersey, Ohio and California. It reimbursed Verizon (NYSE:VZ) nearly $92 million, General Electric (NYSE:GE) more than $36 million and General Motors (NYSE:GM) $19 million. The United Auto Workers received more than $206 million. Other unions benefited in the tens of millions each.
“The availability of group health insurance coverage for America’s retirees age 55 to 64 has declined significantly over the past 20 years, as the percentage of large firms providing workers with retirement health coverage has dropped from 66 percent to 28 percent,” said the administration’s report. “The (program) was designed to stabilize this market by providing financial assistance to health plan sponsors that make coverage available to millions of early retirees and their families.”
Opponents of the program said the reimbursements amount to bailouts for companies and unions that have already negotiated and agreed to these benefits.
The House Energy and Commerce Committee is examining the program. Chairman Cliff Stearns (R-FL) of the Oversight and Investigations Subcommittee said to FOX Business “It’s taxpayer money that is not paid for …to GE, Citicorp, AT&T, large corporations like that who are making billions in profit, just seems obscene frankly.”
“While some large plans received significant amounts from the program, most of the individual (program’s) reimbursement payments made in 2010 were for less than a $1 million,” said the report. “The sponsors that received some of the largest reimbursement amounts in 2010 report that program payments will benefit, either directly or indirectly, more than 4.5 million retirees” and their families.
Sampling of Recipients:
StatesMichigan $319,806,424Texas $276,245,149New Jersey $158,830,329Ohio $123,187,291California $111,721,133Illinois $102,556,381New York $104,402,728
CompaniesVerizon Communications Inc. $91,702,538General Electric Company $36,607,818General Motors, LLC $19,002,669The Boeing Company $18,759,499International Business Machines Corporation ("IBM") $12,989,690EI duPont de Nemours and Company $12,796,589United Parcel Service of America, Inc. $12,312,873Deere & Company $8,699,250Exelon Corporation $7,582,887Ford Motor Company $7,124,437The Procter & Gamble Company $6,597,553United Airlines, Inc. $5,868,926Mars, Inc. $3,453,868Chrysler Group, LLC $3,264,964
Union/Retiree PlansUnited Auto Workers $206,798,086Public Employees Retirement System of Ohio $70,557,76Teacher Retirement System of Texas $68,074,118California Public Employees' Retirement System (CalPERS) $57,834,267Employees Retirement System of Texas $30,175,627State of Michigan Public School Employees Retirement System $22,620,604State Teachers Retirement System of Ohio $20,334,357National Carriers' Conference Committee $14,161,277Oregon Educators Benefit Board $8,440,167Public Employees' Retirement Association of Colorado $8,101,677Public School Teachers $5,465,564
GovernmentsGeorgia Department of Community Health $57,936,127State of New York $47,869,044Commonwealth of Kentucky $29,666,51South Carolina Budget & Control Board $27,142,502Commonwealth of Pennsylvania $24,522,631State of Michigan $20,247,338New Mexico Retiree Health Care Authority $5,915,300City & County of San Francisco $3,692,576
BanksWells Fargo & Company $3,318,769JPMorgan Chase & Co. $2,922,102Bank of America Corporation $2,324,163Citigroup, Inc. $1,767,406Foreign Companies US OperationsAlcatel-Lucent USA, Inc. $12,512,340BP Corporation North America, Inc. $5,316,60Valero Energy Corporation $1,064,122Nissan North America, Inc. $1,011,690ThyssenKrupp Waupaca, Inc. $383,103Astrazeneca Pharmaceuticals, LP $339,453Ericsson, Inc, $197,168Thomson Reuters Holdings $161,981Mercedes-Benz U.S. International, Inc. $17,572
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