Feds To Help Illinois Cities, Companies With Early Retirement Costs

By Bill McMorris     Illinois Statehouse News

SPRINGFIELD  — A handful of central Illinois cities and some of the state’s largest companies are getting some help to cover the cost of early retirement for workers.  But just how much help it will be remains to be seen.

The federal government, through the Department of Health and Human Services, is spending $5 billion over the next four years to cover the cost of workers who can collect their retirement benefits but are not eligible for Medicare.

In Illinois, companies like John Deere and Boeing are receiving money.  As are the cities of Bloomington, Decatur, and Peoria. 

Decatur’s Assistant City Manager Billy Tyus said he doesn’t know how much the city is in-line for. But he figures the money will help recover the costs for 80 former city workers. 

“What we’re doing right now is going through the list of employees to see how many employees would [be covered] So it’s difficult right now to know how much of a reimbursement we would receive”

Tyus said because Decatur is self-insured, any money from Washington D.C. would be a big help to the city.

“Health insurance for the city of Decatur, outside of salaries and pensions, is the third-largest expense for our government.  So any assistance that we can receive…is greatly appreciated.”

Many of the workers who fall into the early retirement gap are former police officers and firefighters.  Illinois law allows them to retire at age 50.  Workers in the Illinois Municipal Retirement Fund can retire as early as age 55.  Those workers would not be eligible for Medicare until age 65.

The city of Bloomington’s Laurie Wollrab said many of her city’s early retirees are having to pay the costs that will be covered by Medicare out of their pockets right now.  That’s where the new federal money will go, but even then Wollrab doubts it will be buckets of cash.

“We’re in the tens of thousands to $100,000 or $200,000…But we won’t know until we put in our claims…and that will be sometime in October.”

Wollrab said the numbers are also thin for the 80 or so former city workers in Bloomington who’d qualify for the help.

“It will help some…but I doubt that it will be more than barely noticeable.  It may keep things more level.  But I don’t think people are going to say ‘Oh gee, this has been a great help to us.”

She adds that the idea behind the federal money is to help transition people to the new federal health care legislation that does not take full effect until 2014.

The savings could add-up for private companies though.  John Deere is one of a handful of large employers that has enrolled in the federal program.

Ken Golden with Deere said thousands of early retirees from the heavy equipment maker could benefit.

“Funds from this program will be used in two different retiree health plans. In a plan that Deere manages for retired union wage employees, we have approximately 11,000 retirees and dependents who are eligible (55 or older but not yet eligible for Medicare) and in another plan that we manage for retired salaried or non-union wage employees we have approximately 5,000 retirees and dependents who are eligible.”

Golden is not guessing at what the size of the federal help could end-up being.

The Department of Health and Human Services says the companies and cities will have a month to submit paperwork, checks will start to be cut in October. But it’s unclear what will happen if the $5 billion from Congress is spent before the new health care regulations take effect in four years.

Originally reported by Illinois Statehouse News. Read the original article here.