The Department of Health and Human Services announced Tuesday that some 2,000 businesses, local governments and union pension funds have been approved for a new program to help keep health insurance in place for early retirees.
The program, which was enacted as part of the health care reform law, provides $5 billion in financial assistance to help companies and organizations keep down the costs of coverage for early retirees age 55 and older who are not eligible for Medicaid.
HHS Secretary Kathleen Sebelius said the program would be an important "bridge to 2014," when government-run exchanges for health insurance will be in place to keep costs down for older workers.
"Rising health care costs put our businesses at an enormous disadvantage against foreign competitors who paid less for their health care," Sebelius said. "Every dollar that employers spend in health care, is a dollar that they couldn't spend on hiring new workers or building a new factory or investing in research."
She added, "At the same time our early retirees became prime targets for insurance company discrimination since often older Americans have more complicated health histories and greater risk for many illnesses."
The problems for early retirees are particularly severe in the individual market, where they often see their premiums skyrocket or are denied coverage altogether, Sebelius said.
To combat the difficulties for businesses who want to keep their early retirees covered, shielding them from the vagaries of the individual market, the program will reimburse some of the costs to businesses that keep coverage in place.
"What we're saying to employers is we know covering early retirees has never been easy," she said. "It's expensive, but it's extremely important. And many employers want to continue to do the right thing."
She added, "So if employers are willing to cover retired workers between the ages of 55 and 65, if they're willing to make that investment, then we're going to help make it happen and keep it steady."
Sebelius said that the program has received "enormous interest" from employers, unions, local governments, state agencies and universities, adding that the 2,000 approved for the program would be just the beginning.
"We have received applications from more than 50 percent of Fortune 500 companies, all major unions, and government entities in all 50 States and the District of Columbia," she said.
She added, "We're continuing to accept applications and sort through them. This is a program providing real relief for employers and employees and making it possible for early retirees to keep their critical coverage and it's a partnership effort to do it together."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.