LINCOLNSHIRE, Ill., May 20, 2015 /PRNewswire/ — Challenges and opportunities created by the Affordable Care Act are prompting two-thirds of companies to consider altering their pre-65 retiree health strategies over the next few years, according to a new Aon Hewitt survey. Of those, 35 percent are favoring sourcing health coverage through the public exchanges under a defined contribution approach. Twenty-eight percent are considering eliminating pre-65 retiree coverage and subsidies altogether. Aon Hewitt’s 2015 Retiree Health Care survey of 349 companies covering 3.2 million retirees found that few companies have already taken action with respect to their pre-65 strategies. Just six percent of companies have already decided to move some portion of their pre-65 retirees to the public exchanges to secure health coverage, and another nine percent are offering retirees a choice between the group program and the public exchanges.
If this survey portends a trend among large private sector employers, state health benefit exchanges could see a rise in enrollment among retirees under age 65 not yet eligible for Medicare. In addition, new federal regulations issued in March 2015 could also support such a trend. The new rules, Amendments to Excepted Benefits, allow employers offer retirees (and part time employees) and their dependents a richer level of benefits through a widened range of excepted benefits that wrap around qualified health plans sold on the exchanges. The arrangement would operate on a trial basis under a two-year pilot program beginning January 1, 2016. The new rules took effect this week.
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