WASHINGTON, June 28 (UPI) -- A vast majority of employers plan to curtail their medical plans for current and future retirees in the next five years.
According to a new study, only 5 percent of employers do not expect to place any additional restrictions on their medical benefits for future retirees over the next five years and 7 percent do not expect to implement further restrictions for current retirees, according to a survey of 163 mostly Fortune 500 companies by Watson Wyatt Worldwide, a global human capital consulting firm.
Fourteen percent of employers plan to eliminate the benefit entirely for future post-65 retirees and 6 percent plan to eliminate it for their current post-65 retirees.
"One bit of good news for employees is that the vast majority of employers currently providing retiree medical benefits will continue to do so," said Cara Jareb, director of retiree medical consulting at Watson Wyatt. "The bad news is that retirees -- especially future retirees -- will have to pay more for their coverage."
Nearly two-thirds of employers anticipate increasing the financial contributions for future retirees and half expect to change their plan design. Twenty-four percent intend to tighten eligibility for future retirees and 10 percent expect to place a new or lower cap on their employer contributions.
Employers also anticipate increasing consumer driven retiree options. As more companies adopt account-based programs for current employees, 26 percent anticipate offering this option to their future retirees.
