Employers are taking advantage of health care reform’s retiree medical options to help employees prepare for retirement and enable current retirees to obtain more cost-effective health care coverage, according to the Sixth Annual Employer Survey on Retiree Medical Strategy.
The survey by Towers Watson and the International Society of Certified Employee Benefits Specialists (ISCEBS) gathered responses from almost 250 large employers, and found that the majority have been spurred on by federally subsidized insurance options, Medicare Part D enhancements and “Cadillac tax” concerns.
“Cost inflation, tax law changes and accounting rules influence how employers have defined their offer of health care benefits to retirees. Many employers have struggled to continue providing valuable benefits while managing their financial commitment,” said Stephen Parahus, senior consultant with Towers Watson.
“Now that health care reform has created new options for retirees to purchase cost-effective individual coverage, employers are seizing the opportunity to assess their current approach to managing retiree health care benefits.”
For Medicare retirees, many employers have converted their current Retiree Drug Subsidy programs to Part D Employer Group Waiver Plans (EGWP) or plan to do so in the next two years in order to take advantage of the additional funding available to Part D plans.
Five percent of employers have put an end to group plan sponsorship all together and are instead helping Medicare retirees buy higher-value medical and pharmacy insurance in the individual market through Medicare coordinators.
Doing this helps employers reduce their financial commitment while seeing that retirees have access to good coverage options.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
