Employers Look To Private Medicare Exchanges As Alternative To Group Retiree Health Coverage
May 24, 2016
According to Kaiser Family Foundation data, just 23% of employers with over 200 employees offered retiree health benefits last year. But that statistic doesn’t tell the whole story.
Rather than exiting retiree benefits, a growing number of employers are looking to other avenues to provide benefits to retirees, including private Medicare exchanges.
According to John Barkett, director of policy affairs for Willis Towers Watson, the private exchange option is appealing to employers for a variety of reasons. In a recent article for Business Insurance Barkett said, “[A private Medicare exchange] allows employers to make coverage available with predictable costs and in an affordable way.”
Barkett noted that an exchange also allows employers to offset the cost of the benefit for both themselves and retirees by creating and making contributions to tax-advantaged health reimbursement accounts (HRAs) on behalf of retirees.
While traditional employer-sponsored retiree health coverage continues to decline, data from Willis Towers Watson shows that this alternate approach is on the rise. One third of U.S. employers surveyed by Willis Towers Watson reported that they have already transitioned to a private Medicare exchange for retiree benefits and two-thirds are considering it by 2018.
For the complete article in Business Insurance, click here.