Money for early retirees and insurers' customer service

Consultants are pushing big companies to apply quickly for money from a $5 billion fund to help cover retiree health costs as part of the new health law, The Wall Street Journal reports. "Big employers shaped the health overhaul bill to tap a $5 billion fund to offset the cost of health benefits for early retirees. Now, some companies worry the early-retiree fund will be exhausted quickly." The consultants say early applicants may have a better chance of securing money, but the health department expects the money to last until 2014, the sunset date for the program, and says it will be distributed as employers file claims on behalf of retirees, not on a first-come, first-serve basis (Adamy, 6/16).

Also in health reform news, MarketWatch reports, "More insurance carriers are ramping up their services as they prepare to compete for millions of new customers starting in 2014, due to the new health-reform law. That's the year health insurers will be banned from refusing coverage to people with preexisting conditions or charging them exorbitant rates, and the first time individuals will have to carry health insurance or face a financial penalty." One insurer has even opened retail stores to help customers address coverage and billing needs (Gerencher, 6/16).

And, a new regulation affecting so-called grandfathered health plans could mean fewer small businesses will keep their current plans, cutting against the White House's pledge that people who like their health coverage could keep it in a post reform world, The New York Times reports. But, "It's unclear that companies will want to have the same insurance plan in 2014 that they have in 2010," the M.I.T. health economist Jonathan Gruber told The Agenda in January. In part, though, whether a company will have the same plan will depend on what constitutes the same plan. Congress left that up to the administration, which offered up its formulation on Monday" (Mandelbaum, 6/15).

Meanwhile, on Capitol Hill, Sen. Orrin Hatch, R-Utah, has introduced a bill that would exempt large businesses from the penalty employers face if they don't provide insurance to their employees, The Hill reports. "The Democrats' new health reform law does not technically mandate that employers offer their workers health insurance. But larger companies — those with more than 50 employees — must pay a $2,000 penalty each year per employee if they don't provide coverage to staff, and those workers instead would receive subsidies on state-based insurance exchanges. Hatch's bill would exempt those businesses from paying the penalties if they can certify to the Treasury and Labor departments that the fines would result in company layoffs." Hatch, the ranking member of the Finance Committee's health subpanel, "hopes to attach his bill to the sweeping tax extenders bill being considered by the Senate this week" (Lillis, 6/15).

Republicans are also continuing their attack on President Barack Obama, saying he "broke his promise that Americans who want to keep their current insurance coverage will be able to do so," Roll Call reports. "Although the Obama administration has moved this week to reassure the public that they will be able to maintain their current health insurance policies, Sen. Orrin Hatch (R-Utah), along with Republican Sens. John Barrasso (Wyo.) and Tom Coburn (Okla.), who are both doctors, argued otherwise, saying new regulations being written by the Department of Health and Human Services make it clear that that is not the case" (Drucker, 6/15).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.