According to the Obama administration announced Tuesday it's making $5 billion available until the safety net of the new health care law is in place. President Barack Obama's health overhaul will accelerate the decline of employer sponsored retiree coverage, by making it easier for people to find and keep affordable coverage on their own, as well as improving Medicare benefits. The health care law forbids insurers from denying coverage to people with medical problems, limits what the companies can charge older individuals, and sets up competitive health insurance markets where consumers can buy a policy in many cases with direct government assistance.

Economist Paul Fronstin of the Employee Benefit Research Institute said "Employers have been offering these benefits because there is no alternative source of coverage. I think they're going to be asking themselves why they should continue offering retiree coverage". Obama said Tuesday addressing a business group said , "This is going to be a welcome reform for many businesses that are trying to do the right thing by their retirees, and for the retirees themselves". John Castellani, President of Business Roundtable which represents chief executives, "The early retiree program reduces costs and allows many of our member companies to continue providing this critical coverage".

It may be noted that like millions of other Americans, the program will run from June 1 of this year to Jan 1, 2014, when many early retirees will be able to enroll in health plans offered through new state based markets known as insurance exchanges. Valerie Jarrett , as Senior adviser to Mr. Obama , said many retirees now "pay exorbitant premiums or simply go without health insurance. In 1988, 66 percent of large firms provided health care coverage to their retirees. Twenty years later, in 2008, the percent of firms offering coverage to retirees plummeted to 31 percent".