Pre-65 Retiree Health Care Coverage

Providing health care benefits for early retirees is both costly and challenging. The absence of viable private markets leaves employers with limited flexibility. The general employer trend is to move away from retiree coverage, though this is not without consequences as older employees defer retirement.

For those employers who have walked away from these programs, they have dealt with the liability, but not necessarily the cost.

2009
Average cost, Age 60-64 with spouse	$13,300
Years before actual retirement	x 2.5
Average employer subsidy	x70%
Additional employer cost for delayed retirement	$23,275
Average COBRA premium received	$6,650
Years on COBRA	1.5
Additional employer COBRA cost	$9,975
Total additional cost to employer	$33,250

(The chart above does not account for the potential nine month COBRA subsidy of 65%, where retiree pays 35% as not everyone will qualify)

Pre-65 Strategies

The most successful programs tend to focus around the general approach of creating benefit programs based on employer/government subsidy levels that can compete with the individual market space. As part of this process we feel it is important to embrace some or all of the following concepts/strategies:

		Health and wellness promotions.
		Lower cost base plans with higher deductibles.
		Tax favored savings accounts to promote consumerism and a sense of financial security for later years.
		Provide actual health care information to members promoting price transparency.

Summary

Employer/employee health care today is at a turning point. Our clients are looking for solutions that cross over the traditional lines. We bring purchasing organizations comprehensive, integrated strategies that maximize savings while maintaining corporate goals and objects.

Feel free to let us know if you would like to initiate just such a dialogue.