Many U.S. workers still expect their employers to help them pay for medical coverage when they get old.[@@]

Paul Fronstin, a researcher at the Employee Benefit Research Institute, Washington, has published statistics illustrating the depth of workers’ ignorance in a new EBRI issue brief.

When Fronstin analyzed government data on income, benefits and worker expectations, he found that the share of U.S. “early retirees,” or retirees ages 55 to 64, who were getting retiree health benefits from former employers fell to 28.7% in 2002, from 39.2% just 5 years earlier.

The share of “Medicare-eligible retirees,” or retirees age 65 and older, who received retiree health benefits fell to 25.5%, from 28.1%, over that same period.

But Fronstin found when he analyzed worker expectations that many workers were unaware how much had changed between 1997 and 2002.

The share of workers expecting retiree health benefits fell only slightly, to 47%, from 50%.

The gap between 2002 expectations and 2002 reality was narrowest for workers who had graduate degrees.

About 53.6% of the best-educated early retirees and 46.1% of the best-educated Medicare-eligible retirees were getting retiree health benefits in 2002, while 57% of the best-educated workers were expecting to get retiree health benefits.

For workers without graduate education, the percentages of survey participants expecting retiree health benefits were about 18% to 20% higher than the actual retiree health benefits penetration rates for those demographic groups.

Many workers are living paycheck to paycheck and might have a difficult time putting money aside to pay for retiree health coverage.

But Fronstin found a considerable gap between 2002 expectations and 2002 reality even in the highest-income category, which includes workers with annual incomes over $50,000.

In the highest-income category, 61% of the workers were expecting retiree health benefits, but only 49.3% of the early retirees in that income category and only 38.8% of the Medicare-eligible retirees in that income category had retiree health benefits, Fronstin reports.

Already, decades before the boomers begin retiring in droves, “workers are far more likely to expect to receive retiree health benefits than retirees are to receive them,” Fronstin writes in his report.

In the future, if current trends continue, “baby boomers may find themselves unpleasantly surprised by what awaits them in retirement,” Fronstin says