EBRI: Retiree Health Care Losing Popularity

October 17, 2007 (PLANSPONSOR.com) - The number of workers employed at companies offering retiree health care benefits slipped from 31% in 1997 to 22% in 2003, according to figures from the Employee Benefit Research Institute (EBRI).

The figures come from a July 2006 issue brief from the Washington, D.C.-based group that showed retirees increasingly have to shoulder more of the costs of their health care coverage as companies abandon expensive retiree health care plans. The brief showed that even large employers are beginning to get rid of the plans.

In 1997, 22% of private-sector establishments offered health benefits to early retirees, down to 13% by 2005.

The number of private-sector establishments offering health benefits to Medicare-eligible retirees dropped from 20% in 1997 to 13% in 2005.

The paper also pointed to another trend that shows not all workers employed by firms offering retiree health benefits will be eligible for the benefit, because employers are increasingly restricting eligibility. New hires, for example, are often not eligible for retiree health benefits.

According to another brief from EBRI released in March 2005:

  • 28.7% of early retirees had retiree health benefits in their own name in 2002.
  • 25.5% of Medicare-eligible retirees had retiree health benefits in their own name in 2002.
  • 47.4% of workers ages 45 – 64 were expecting retiree health benefits upon retirement in 2002.