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HomeHR JobsRetiree medical advantages more likely to change as healthcare prices rise

Retiree medical advantages more likely to change as healthcare prices rise


One in eight employers anticipate to make modifications to their retiree medical advantages over the subsequent three years, based on new knowledge from Willis Towers Watson, whose 2022 Retiree Medical Survey queried 122 employers that make use of about 1.9 million employees. Almost half (49%) say they anticipate to introduce modifications as a result of the advantages are too costly for the corporate to keep up. Over a 3rd (36%) need to deal with unacceptable monetary dangers, whereas 33% cited the necessity to cut back the plan’s administrative burden.

What it means to HR leaders

Like most facets of healthcare advantages, employers are fascinated with the way to maintain down spending as medical prices proceed to extend. And retiree healthcare advantages aren’t any exception.

Certainly, the WTW Retiree Medical Survey discovered half of the employers (50%) are involved about will increase of their prices to offer medical advantages for retirees. These prices for retirees who aren’t eligible for Medicare are projected to extend 4.8% subsequent yr, up from 3.6% this yr. Prices for Medicare-eligible retirees are projected to rise 2.7% subsequent yr, up from 2.1% this yr.

For now, organizations stay dedicated to providing retiree healthcare advantages and a constructive retiree expertise, notes Lindsay Hunter, senior director of well being and advantages at WTW—however they’re in search of methods to offer them extra cost-effectively.

“Employers are rightfully involved about this rising burden and are finding out all choices, together with non-public marketplaces,” Hunter says.

The survey finds that 22% of employers have both stopped providing a conventional group medical plan to early retirees or are contemplating a substitute. Amongst these employers that terminated a gaggle plan, 75% are changing it with entry to and monetary help for particular person insurance coverage by a non-public market.

Different analysis has pointed to a rising improve in medical and healthcare prices for workers. It’s an issue that employers absolutely wish to rein in, however many specialists warn that reducing advantages or transferring prices to staff may trigger issues as they attempt to entice or retain expertise.

To study extra about rising healthcare prices and techniques to include them, don’t miss HRE’s 2023 Well being & Advantages Management Convention, which will likely be held from Might 3-5 in Las Vegas. Study extra and register right here.




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