This was one of the findings in a recent survey conducted by the International Foundation of Employee Benefit Plans. The foundation said the coverage among multi-employer funds compares with roughly one-third of large corporations offering retiree medical benefits.
In an effort to maintain the viability of retiree health-care benefits, 62% of the responding multi-employer fund administrators plan to increase retiree self-payment. Only 2% of respondents plan to eliminate health benefits for future retirees, according to the survey entitled Retiree Medical Benefits in the Multiemployer Sector: Meeting the Challenge.
While escalating health care costs have made it increasingly difficult to provide retiree health benefits, prescription drug costs have made a particular impact. Of the plans that offer retiree medical benefits, 94% include prescription drug coverage. Survey respondents said that prescription drugs account for 34% of the total retiree medical cost and that these costs are increasing faster than total retiree medical costs
A multiemployer fund is established through collective bargaining between one or more labor unions and two or more employers. They are most common in the construction, manufacturing, transportation, retail and service industries. The nature of these industries requires employees to be mobile and to work for several different employers throughout the year. Multiemployer funds ensure that these employees have benefits coverage despite switching employers often.