Decrease in Employer Health Benefits for Retirees Examined
The Washington Post on Sunday examined the effects of a decision last month by the Equal Employment Opportunity Commission that allows employers to limit health benefits for retirees ages 65 and older, the latest in a "long 15-year decline in the availability of medical insurance for retirees." According to the Post, "fewer of today's workers can look forward to the lifetime company pension and medical insurance" that previous retirees had expected, and the involvement of EEOC in the issue "shows how inventive, or desperate, aging workers have become about hanging on to whatever benefits they can." (Crenshaw, Washington Post, 5/2). EEOC in April voted 3-1 to approve a rule under which employers that reduce or eliminate health benefits for retirees who qualify for Medicare do not violate civil rights law on age discrimination. In addition, the decision allows employers to reduce or eliminate health benefits for retirees who qualify for state-sponsored health benefits similar to Medicare. The decision requires approval from the White House Office of Management and Budget but likely will stand (California Healthline, 4/27). According to recent studies, fewer than 30% of current or future early retirees have or will have employer-sponsored health benefits, and about 25% of retirees who qualify for Medicare have such benefits. A "key component of the problem" is increased life expectancy for retirees, the Post reports. The average number of years that men spend in retirement increased from 11.5 between 1950 and 1955 to 18.1 between 1995 and 2000, the Post reports. According to a 2003 study conducted by Dallas Salisbury and Paul Fronstein of the Employee Benefit Research Institute, a 65-year-old retiree without employer-sponsored health benefits would have to pay between $37,000 and $1.45 million in premiums and out-of-pocket costs to supplement Medicare coverage (Washington Post, 5/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.