Health Reform's Impact on Retiree Health Benefits

The Employee Benefit Research Institute's January Issue Brief highlights the potential implications of health reform on retiree health benefits.

The report cites that the issues impacted most by reform are anticipated to be: the reinsurance program for early retirees, Medicare drug benefits, tax treatment of employer subsidies under the Medicare Modernization Act of 2003, and post-retirement benefit changes.

EBRI reports that

"The proposals’ provisions will have a mixed impact on retiree health benefits: In the short term, the reinsurance provisions would help shore up early retiree coverage and Medicare Part D coverage would become more valuable to retirees. In the longer term, insurance reform combined with new subsidies for individuals enrolling for coverage through insurance exchanges, the maintenance-of-effort provision affecting early retiree benefits, increases to the cost of providing drug benefits to retirees, and enhanced Medicare Part D coverage, would all create significant incentives for employers to drop coverage for early retirees and drug coverage for Medicare-eligible retirees."

Click here to access the complete report.