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Life Health > Health Insurance

Study: Large Employers Slash Retiree Health Benefits

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NU Online News Service, Sept. 16, 1:48 p.m. – U.S. employers are rushing to curtail or eliminate retiree health benefits, according to a new report from Watson Wyatt & Company, Washington, a benefits consulting firm.

Researchers at the firm surveyed 56 employers with at least 5,000 workers and found that 20% have already eliminated retiree medical plans for new employees. Another 17% will require new employees to pay the full cost of retiree health coverage.

Other employers are reducing the amount they are willing to contribute for retiree health coverage and increasing the number of years employees must work for them to qualify for full retiree health benefits, the Watson Wyatt researchers write.

Because of the changes, typical employer financial support will probably shrink to less than 10% of total retiree medical expense by 2031, down from more than 50% today, the researchers predict.

The researchers recommend that Congress save the retiree health benefits market by cutting red tape and creating tax incentives similar to those that encourage employers to fund pensions.

More information about the report is available at


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