Health exchanges for retirees

Despite rising health care costs, most employers are taking a wait and see approach with respect to their pre-65 retiree strategies, finds Aon Hewitt's 2015 Retiree Health Care survey.

The survey of 349 companies covering 3.2 million retirees found that few companies have taken action with respect to their pre-65 strategies. Just six percent of companies have already decided to move some portion of their pre-65 retirees to the public exchanges to secure health coverage, and another nine percent are offering retirees a choice between the group programme and the public exchanges.

According to the survey, the actions employers intend to take with their pre-65 strategies are likely to follow the trends already occurring in the post-65 retiree space. Fifty-eight per cent of companies are currently reassessing their long-term post-65 retiree health strategies. Of those companies that have already decided to make strategy changes, more than 33 per cent have moved forward with one that will direct post-65 retirees to an exchange to secure individual market for coverage.

Of the companies expecting to make changes to their post-65 retiree strategies in the future, an additional 33 per cent indicate strong interest in this approach. The reports says companies that transition post-65 retirees to a private retiree health exchange are generally providing subsidies that allow the vast majority of retirees to buy at least comparable coverage to their group plan, with many retirees finding greater value in the individual market.