Companies, Unions and Governments Get Millions in Subsidies Under Stealth Provision in Health Care Law

The beneficiaries of the latest taxpayer-subsidized surprise uncovered in the Patient Protection and Affordable Care Act (PPACA) includes a who’s who of Minnesota businesses, unions, cities, counties and schools, according to investigators for the U.S. House of Representatives Energy and Commerce Committee.




Altogether, 235 Minnesota employers and unions have taken advantage of a previously obscure provision in the health care law that gives federal subsidies to supplement health insurance costs for early retirees under the Early Retiree Reinsurance Program (ERRP). To date, Minnesota employers and unions have received more than $15 million in ERRP payments, nineteenth among the states for total funding received under the reimbursement program.

High profile Minnesota corporate recipients include Allianz, American Crystal Sugar, Ameriprise Financial, Andersen Windows, Blue Cross/Blue Shield, Cargill, Ecolab, Hormel, Mayo Clinic, Medtronic, Minnesota Life, SUPERVALU, Travelers, Toro, US Bank and Xcel.

Some of Minnesota biggest local governments also cashed in, including the Metropolitan Council, the Metropolitan Airports Commission and the State of Minnesota. Minnesota counties that successfully sought the subsidy include: Dakota, Hennepin, Ramsey, and St. Louis. Finally, the cities of Bloomington, Duluth, Minneapolis, and St. Paul and school districts such as Anoka-Hennepin, Edina, St. Cloud, St. Paul and Stillwater all were successful in seeking additional funds as part of the federal health care law.

Several Minnesota unions also got a big share of the federal health care funds, including Minnesota Council Number # 5 of AFSCME, Carpenters & Joiners Welfare Fund, Education Minnesota, 789 United Food & Commercial Workers, Minnesota Teamsters Construction Division, Sheet Metal # 10 Benefit Fund, and the Twin City Pipe Trades.


The PPACA which became law one year ago, appropriated $5 billion in financial assistance that is available to maintain health insurance for early retirees 55 and older who do not yet qualify for Medicare coverage. In a 23,471 word, 21 page federal register filing, eligible “employment-based plans” were defined to include plans maintained by a private employer, state or local government, employee organization, voluntary employees’ benefit association (VEBA), nonprofit organization, religious entity or a multiemployer plan.

The program was scheduled to end on January 1, 2014 when state health insurance exchanges are up and running, according to the healthcare.gov website. As word of the government give-away has spread, however, there seems to have been something of a run on the fund. In 2010, the fund was drawn down $535 million funneled to 253
entities. Since then, the number of recipients has skyrocketed to more than 5,000, leading the federal government to abruptly decide to stop accepting applications on May 6, 2011.



This is just the latest in a series of revelations related to hidden clauses and costs in the health care act. In January, FFM reported that the U.S. Department of Health and Human Services granted 24 Minnesota public and private entities with approximately 14,000 enrollees a waiver from the Affordable Care Act. In a previous report, FFM revealed that more than 100 staff members working for Minnesota congressional committee chairmen or ranking members were exempt from a key requirement in the controversial health care reform bill recently passed by Congress and signed into law.


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