At times, offering older employees the ability to take early retirement can be a way to downsize, yet minimize the number of outright layoffs. However, ensuring these former employees have some sort of health care coverage can be tricky. Most will be too young to qualify for Medicare. On the other hand, keeping them on your firm's health care plan can get expensive.

A program established through the Patient Protection and Affordable Care Act may help. The Early Retiree Reinsurance Program (ERRP) reimburses participating employer-based healthcare plans for 80 percent of the claims costs for each early retiree, spouse, surviving spouse or dependent, during a plan year. The claims must meet a threshold of $15,000, and are limited to $90,000. The claims that qualify for reimbursement are those for services that normally are covered by Medicare, including surgical, hospital and prescription drug benefits.