Companies Look to Transition Retirees to Health Exchanges – May 20, 2015

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.

Source: Companies Look to Transition Retirees to Health Exchanges – May 20, 2015

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.


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email or call 530-295-1473. 

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Frederick Pilot

1 Comment

  1. Patrick Pine

    This will sound politically incorrect. The sad truth is that no plan, public exchange or otherwise, really wants these groups. So while the trend may give exchanges more enrollees – these are not the enrollees they want.

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