When the exchanges are in place, he says, “if an employer provides coverage to pre-Medicare retirees, it looks as if they won't have access to the government subsidies for the exchanges.” By contrast, if a company provides financial support so that early retirees can buy their own coverage, it seems they will be eligible for the government subsidies, he says.

“The thing to keep your eye on is how employers are going to look at the intermediate-term availability of the exchange and how they're going to slowly transform their programs to accommodate that,” Ostendorf adds. “I think you will see a lot of migration from traditional programs to providing subsidies for these benefits.”

The healthcare reform measure's program to subsidize health coverage for retirees who are not yet 65, the Early Retiree Reinsurance Program (ERRP), took effect June 1. It provides an 80% subsidy for retiree medical claims between $15,000 and $90,000.

According to a survey by HR consultancy Hewitt Associates, 76% of companies that offer retiree medical benefits intend to apply for ERRP. But a report from the Employee Benefit Research Institute estimates that the $5 billion could be used up by the end of 2011.

The perception that the subsidy will be used up fairly quickly, along with interim regulations from the Department of Health and Human Services suggesting applications would be accepted on a first come, first serve basis, has left companies anxious that they could miss out on the subsidy. Organizations representing employers have submitted comment letters asking that the process for reimbursement be amended to extend the time frame for filing.

“I think virtually all employers who have a correctly completed application will be accepted,” Ostendorf says, but adds, “There's a real incentive for employers to be ready to go right away once the application window does open.”

For a look at what concerns companies most about the healthcare reform measure, see 2018 Healthcare Tax Fuels Worry Now.