Employer Coverage of Retirees Declines, Especially for Early Retirees
Declines are expected to continue

Source(s): Christopher Conkey, Wall Street Journal (Mar. 23)

Fewer retired workers, especially early retirees, are receiving health coverage from their former employers, reports the Wall Street Journal. A report from the nonpartisan Employee Benefit Research Institute (EBRI) found that 29 percent of early retirees had employer-sponsored health coverage in 2002, compared to 39 percent in 1997. The percentage of older retirees who are eligible for Medicare and receiving such benefits also declined over the same period, from 28 percent to 25 percent. An aging population and soaring health care costs are partly responsible for the decline, but the survey cited a 1990 Federal Accounting Standards Board ruling that changed employers' financial reporting on retiree health benefits as the primary reason. EBRI said it expects the coverage declines to continue, and warned workers to "lower expectations for employer-based health coverage in retirement." According to James Klein, president of the American Benefits Council, which represents large employers that offer health plans, "Unless Congress acts quickly, the future for retiree health care is going to be very bleak."

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