2013 Employer Health Benefits Survey
Section Eleven: Retiree Health Benefits
Retiree health benefits are an important consideration for older workers making decisions about their retirement. Health benefits for retirees provide an important supplement to Medicare for retirees age 65 or older. Among firms offering health benefits to their workers, large firms (200 or more workers) are much more likely than small firms (3-199 workers) to offer retiree health benefits to at least some of their former employees.
- Twenty-eight percent of large firms (200 or more workers) that offer health benefits to their employees offer retiree coverage in 2013, similar to 25% in 2012. There has been a downward trend in the percentage of firms offering retirees coverage, from 34% in 2006 and 66% in 1988 (Exhibit 11.1).
- The offering of retiree health benefits varies considerably by firm characteristics.
- Large firms are much more likely to offer retiree health benefits than small firms – 28% vs. 5% (Exhibit 11.2).
- Among large firms that offer health benefits, state and local governments (78%) and firms in the finance (52%) industry are more likely than large firms in other industries to offer retiree health benefits. In contrast, large firms in the wholesale industry are less likely (6%) to offer retiree health benefits when compared to large firms in other industries (Exhibit 11.2).
- Large firms with fewer lower-wage workers (less than 35% of workers earn $23,000 or less annually) are more likely to offer retiree health benefits than large firms with many lower-wage workers (35% or more of workers earn $23,000 or less annually) (32% vs. 6%). A comparable pattern exists in firms with a larger proportion of higher-wage workers (35% or more earn $56,000 or more annually) (Exhibit 11.3).
- Large firms with union workers are more likely to offer retiree health benefits than large firms without union workers – 45% vs. 22% (Exhibit 11.3).
- Large, publicly owned employers are more likely to offer retiree benefits than large private for-profits firms or private not-for-profits employers. (61% vs. 24% and 20%, respectively) (Exhibit 11.3).
- Among all large firms (200 or more workers) offering retiree health benefits, most firms offer them to early retirees under the age of 65 (90%). A lower percentage (67%) of large firms offering retiree health benefits offer them to Medicare-age retirees (Exhibit 11.4). These percentages are similar to 2012 and have remained stable over time.
- Among all large firms (200 or more workers) offering retiree health benefits, 4% offer coverage which exclusively covers prescription drugs (Exhibit 11.6).