Reduced Retiree Health Benefits Anticipated
Many U.S. companies are planning to reduce medical and pension benefits for current and future employees, according to two separate studies released Wednesday by consulting firm Watson Wyatt Worldwide, Long Island Newsday reports (Luhby, Long Island Newsday, 6/29). For the studies, researchers surveyed 163 mostly Fortune 500 companies (Dixon, Reuters, 6/28).
The study on health benefits finds that most employers plan to reduce medical plans for current and future retirees within the next five years (Long Island Newsday, 6/29). Fourteen percent of employers said they plan to eliminate the benefit entirely for future retirees older than age 65, and 6% plan to eliminate the benefit for current retirees in the same age group.
Only 5% of the 163 companies surveyed said they do not expect to place any additional restrictions on their medical benefits over the next five years, and 7% said they do not expect to implement further restrictions for current retirees, the study finds. In addition, out of the 77% of employers who this year took a Medicare prescription drug subsidy -- a plan aimed at encouraging employers to continue to offer retiree drug coverage -- 64% plan to accept it in the future (CQ HealthBeat, 6/28).
Cara Jareb, director of retiree medical services at Watson Wyatt, said, "There is definitely more change in the air now that Medicare Part D has come into play. There are fewer companies that are not planning on doing anything at all" (Reuters, 6/28).
In other employer health benefits news, 253 Fortune 500 companies provide equal benefits to same-sex couples, according to data the Human Rights Campaign is expected to release Thursday, USA Today reports. Duke Energy, Harrah's Entertainment, 3M, Lowe's and Clear Channel Communications are among those that began offering such benefits in 2006.
Joe Solmonese, president of HRC, said, "The (study) is important and significant, particularly the number (of companies) offering domestic-partner benefits, because it shows real growth and a trend toward equity and tolerance in the workplace."
Steve Crampton, chief counsel for the American Family Association's Center for Law & Policy, said the increase in benefits to same-sex employees is the result of "political pressure." The group opposes domestic partner benefits, USA Today reports (Armour, USA Today, 6/29).