Retiree Health Benefits

Just as employers are not legally required to offer health insurance to their employees, the provision of retiree health benefits generally is a voluntary arrangement to which employers are not bound. Since the mid-1990s, large employers (500+ employees) have cut back steadily on retiree benefits.

In firms with 500 or more employees, the percent of early retirees provided health benefits has decreased from 46 percent to 29 percent (a 40 percent drop).¹

Provision of Retiree Health Benefits by Employers with 500+ Employees, 1993-2006

Source: Mercer Human Resources Consulting, 2006. (Data for 2002 are not comparable to other years.)

In addition to those employers moving away from providing retiree health benefits, many of those that continue to provide such benefits do so under increased employee cost sharing arrangements. For these individuals, health care coverage is available, but at an increasingly steep price.²

Sources

¹Mercer Human Resources Consulting, 2006.

²Fronstin, Paul, "Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement," EBRI Issue Brief Number 295, July 2006.

Please note that EBRI's analysis defines children as individuals ages 0-17, whereas other sources may define children as ages 0-18. This difference accounts for the variance between the reported numbers of uninsured children, depending on the source and method of analysis.

Other Related Fact Sheets

Employment-Based Coverage [1]

Source of Coverage [2]

Industry and Occupation [3]

Health Behavior [4]