Employers are trying out all kinds of approaches to better manage retiree health costs, though the day will eventually come when just a handful will offer such benefits to the over-65 set.
That’s the conclusion the Kaiser Family Foundation reached in what is essentially a status report titled “Retiree Health Benefits at the Crossroads.”
Companies once offered retiree benefits as a way of retaining workers but have been chipping away at them for years. One of the more recent companies to make the move was Northrop Grumman, which earlier this month told employees it would use a broker to help them choose from a variety of Medicare supplemental options.
That’s just one of a number of avenues employers are taking.
As Kaiser noted, “several major trends stand out in particular, namely, growing interest in shifting to a defined contribution approach and in facilitating access to non-group coverage for Medicare-eligible retirees, and consideration by employers of using new federal/state marketplaces as a possible pathway to non-group coverage for their pre-65 retiree population.”
The report noted that the number of companies offering coverage of any type to retirees has dwindled, from 66 percent in 1988 to 28 percent last year.
It said even employers that plan to continue providing coverage of retirees are exploring ways to reduce the corporate dollars dedicated to the task.
Though fewer in number, retiree health benefit plans remain an important source of supplemental coverage for roughly 15 million Medicare beneficiaries and a primary source of coverage for more than two million pre-65 retirees in the public and private sectors, Kaiser noted.