The study surveyed 163 companies and surprisingly found “only 5 percent of employers do not expect to place any additional restrictions on their medical benefits for future retirees over the next five years and 7 percent do not expect to implement further restrictions for current retirees. Fourteen percent of employers plan to eliminate the benefit entirely for future post-65 retirees and 6 percent plan to eliminate it for their current post-65 retirees.”
This does not look good for future retirees who are already facing a bleak retirement scenario with slim retirement savings. The good news for current employees is the “vast majority of employers currently providing retiree medical benefits will continue to do so.”
Federal subsidies from the new Medicare Part D prescription drug program are helping to offset the cost of employer retiree medical plans. Seventy-seven percent of employers in 2006 took the federal subsidy and of those 64 percent plan to continue to take the subsidy in the future.
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