XChanges Today: A Business Brief
Volume 3: New Strategies in Retiree Health Care
Since 1988, the number of large companies offering retiree health care benefits to their workforce has declined 38 percent. Even so, nearly half of large employers plan to continue offering retiree health benefits, though many are redesigning them in response to rising costs, legislative changes, and the Affordable Care Act (ACA). While some plan sponsors will continue to rely on group-based strategies, a growing number of employers are turning to defined contribution and individual market solutions to address many of the challenges they face in offering retiree health care benefits.
Additionally, today’s employees are underprepared for the costs of retirement. While more of them are on track than in the past, only 30 percent of employees are positioned to retire comfortably at age 65.
At the end of this publication is a Q&A conducted with John Grosso, SVP of Health & Benefits Consulting at Aon. Critical factors that companies must evaluate when reviewing available exchange solutions, the financial impact companies experience after transitioning their retiree population to a private exchange and the most important factors in the retiree experience during the transition are highlighted.
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