The St. Paul, Minnesota, manufacturing conglomerate notified employees last week that it will change retiree benefits both for those who are too young to qualify for Medicare and for those who qualify for the Medicare program. Both groups will get an unspecified health reimbursement instead of having access to a company-sponsored health plan.
The company said it made the announcement now to give retirees a chance to explore different options during this year’s benefit-enrollment period, according to a 3M memo reviewed by The Wall Street Journal. A 3M spokeswoman, Jacqueline Berry, confirmed the contents of the memo, to the Journal.
The company didn’t specify how many workers would be impacted, according to the Journal. It currently has 23,000 U.S. retirees.
Starting in 2015, 3M retirees too young to qualify for Medicare will receive financial support through a health reimbursement arrangement and won’t be able to enroll in the company’s group insurance plan. The company described that as an account retirees can use to purchase individual insurance through exchanges that the health law will create in 2014.
These workers now get credits they can use to buy the company’s health plan offering medical, dental and prescription drug coverage, or they can elect to enroll in a health savings account.
For those old enough to qualify for Medicare, 3M in 2013 will replace its current retiree medical program with a health reimbursement account, funded partly by the sponsor, which can be used to buy an individual Medicare plan. Currently, these workers have had access to a reimbursement account that could be used to buy into the company’s group health plan.
The Wall Street Journal report said that while the 3M changes won’t start to phase in until 2013, they show how companies are beginning to respond to the new law. While thousands of employers are tapping new funds from the law to keep retiree plans, others may choose to get rid of such offerings in years to come.