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Benefits March 23, 2005
EBRI: 58% of Employers Continue Prescription Drug Coverage
March 23, 2005 (PLANSPONSOR.com) - Fifty-eight
percent of private sector employers are planning on
continuing their drug benefit programs while accepting the
28% government subsidy under Medicare Part D, according to an
Employee Benefit Research Institute (EBRI) brief.
Reported by Kip McDaniel
Additionally, 17% of employers polled by EBRI stated that they will offer a supplemental plan to Medicare, while 8% are going to discontinue their coverage for retiree prescription drugs.
Interestingly, only 13% of employers did not know what strategy their firm would use, indicating that many firms have decided quickly on how to proceed following the change in Medicare prescription drug policy.
As a result of this change, EBRI is suggesting that employee behavior – especially that of workers nearing retirement – will change considerably. Already, the poll indicates that employee expectations are changing as a result of the program alteration. In 2002, 47% of workers aged 45 to 64 expected to receive retiree health care benefits, down 3% from 1997. The drop in actual coverage was even more prominent, with only 28.7% of early retirees in 2002 receiving such coverage, down over 10% from seven years before. For those who were eligible for Medicare, only 25.5% received private-sector drug coverage in 2002, down from 28.1% in 1997. EBRI believes that because of the decline in coverage, it is likely that many workers will opt not to retire early.
A copy of the EBRI brief is available here .
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