ARLINGTON, Va., July 19, 2016 (GLOBE NEWSWIRE) -- More than half (56%) of U.S. employers are confident that public health insurance exchanges will be a viable alternative to group health plans for pre-65 retirees by 2018, according to a survey from Willis Towers Watson (NASDAQ:WLTW). The survey also found that in the face of continued pre-65 retiree health care cost increases, 72% of employers plan moderate to significant changes in pre-65 retiree health benefits over the next four years.
These findings, from the Willis Towers Watson 2016 Emerging Trends in Health Care Survey, revealed that employers expect a 4.1% cost increase for pre-65 retiree health care after plan changes or 5.7% without plan changes in 2016. This compares with an expected 2.0% cost increase for Medicare-eligible retiree health care after plan changes or 3.3% before plan changes this year. These expected cost increases factor in that some employers fund retiree benefits through fixed contributions made to health reimbursement arrangements.
“Employers are seeking alternatives to providing their retirees with the same group health care coverage they offer active employees,” said John Barkett, senior director of policy affairs for Willis Towers Watson. “Many employers have already transitioned their post-65 retirees to original Medicare plus private individual Medicare plans, or are planning to. This keeps costs down and retiree satisfaction up. However, because Medicare is not available to younger retirees, employers are looking elsewhere for a solution.”
The survey found that of employers offering pre-65 retiree medical coverage today, 67% offer pre-65 retirees a subsidy for health insurance. If retirees are eligible for a federal subsidy, they can purchase plans on public exchanges with the subsidy. If not, they still can purchase plans from public exchanges without a federal subsidy or directly from health insurance companies with or without an employer subsidy.
“With employer confidence in public exchanges for pre-65 retirees growing, we expect the individual plan market to play an increasingly important role in employers being able to continue providing health benefits for that demographic,” said Joe Murad, managing director, Individual Exchange Solutions, Willis Towers Watson.
About the survey
The Willis Towers Watson 2016 Emerging Trends in Health Care Survey was fielded in January and February 2016 to gain insight into emerging trends in U.S. employer health care. The 467 employers that responded represent 12.1 million employees and are midsize to large companies across a variety of industries.
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
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Source:Willis Towers Watson Public Limited Company