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When President Barack Obama signed his healthcare overhaul into law a year ago, some U.S. companies were quick to flag — and write down — the millions of dollars they stood to lose as a result of one aspect of the measure.
A year later, data from the Department of Health and Human Services shows the business community is one of the biggest beneficiaries of a separate provision of the overhaul, which provides billions of dollars in assistance to employers that maintain medical coverage for early retirees.
Hundreds of U.S. companies — including some that took writedowns last year that critics cited as proof of the new law’s burden on business — are participating in the program, which has paid out $530 million in the first seven months and is authorized to spend as much as $5 billion through 2014.
But while companies were quick to bemoan a potential headwind created by the overhaul, which eliminated a double subsidy they had enjoyed on certain drug expenses, no one seems keen to alert shareholders to the tailwind the companies are enjoying thanks to another aspect of the law.
The program, known as the Early Retiree Reinsurance Program, was designed to encourage health-plan sponsors — companies, labor unions, nonprofits and state and local governments — to continue to provide coverage to employees who retire before they qualify for Medicare, the government healthcare program for people aged 65 and over…
The plan is scheduled to sunset in 2014, when the health insurance exchanges created by the Obama law are scheduled to open, providing affordable insurance to everyone. But in the four years ERRP is around, it can put as much as $240,000 per early retiree back in the pocket of a company…
So far, about one-fifth of the $530 million that was dispersed in the first seven months of the program has gone to private U.S. businesses. The actual amounts each company received are not yet available.
But the official list of companies participating in the program includes half the members of the Dow Jones industrial average.
Reuters contacted the three biggest firms on that list, AT&T, Caterpillar and John Deere asking what they had told their shareholders about the benefits received from this aspect of healthcare reform. They either offered no comment – or said they’re still evaluating data.
Counting the money is more like it.