Hewitt Finds 13% Increase In Retiree Plan Costs

The survey participants said the average cost of providing retiree health benefits rose about 13% in 2004.

The participants reported mixed reactions to the new Medicare Prescription Drug, Improvement and Modernization Act of 2003 drug benefits provisions.

MMA will create a new, subsidized Medicare drug benefit program, but it also created a new incentive program to encourage employers to keep existing employer-subsidized retiree drug benefits.

Although 58% of survey participants said their firms probably will keep current drug benefit programs, 17% probably will offer drug coverage only as a supplement to the Medicare plan, and 8% are likely to discontinue drug coverage, the researchers report.