Health care fund aids local retirees
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Western Pennsylvania companies, organizations and government agencies received more than $51 million from a $5 billion federal fund set up to help pay for insurance benefits for early retirees. The fund was part of the controversial health care overhaul legislation enacted last year.
Pittsburgh-area recipients range from Alcoa, which received $10.7 million, to Monongahela Valley Hospital, which received $6,059.
Western Pennsylvania recipients accounted for 1 percent of the money distributed from the $5 billion fund as of June 10.
Statewide, the Commonwealth of Pennsylvania received $24.5 million, Penn State University received $1.9 million and the Pennsylvania Turnpike Commission received $428,265.
The program, managed by the U.S. Department of Health and Human Services, was designed to make health insurance more affordable for workers who retire early and do not qualify for Medicare. The funds can be used to reduce costs of retirees, reduce an employer's costs of providing coverage, or both.
Backers of the health care overhaul legislation hoped the $5 billion fund would make the sweeping proposal more palatable, said Lorin Lacy, a principal in the Pittsburgh office of Buck Consultants.
"They looked at this as something that was a giveback to larger employers," he said.
They also hoped it would encourage more employers to continue providing the benefits.
That said, compared to the billions of dollars employers pay to provide such coverage, the $5 billion "is a drop in the bucket," Mr. Lacy said.
"They recognize it for what it is: short-term relief," he added.
Under the program, companies and organizations are generally reimbursed for 80 percent of the costs of benefits for retirees between the ages of 55 and 64. The costs include medical and prescription drug claims made by retirees, their spouses and other beneficiaries, according to Aon, which advises clients on health care and other issues.
First Published September 1, 2011 12:00 am
