HR consulting giant, Mercer, conducts an annual survey of employer-sponsored health plans each year. The 2011 survey, completed by 2,800 employers with 500 or more employees, tracks new trends in the retiree medical market. In response to health care reform, some employers are now considering the use of state or private exchanges to provide health benefits for pre-Medicare-eligible retirees.
While two-thirds of those employers with retiree health plans intend to continue offering these plans over the next 5 years, a fast growing number do not. More that half of the current retiree health plan sponsors say that if they were to terminate their plan they would provide some level of coverage through a state or private exchange.
How a Retiree Health Exchange Works
A retiree health exchange brings both pre-Medicare and Medicare eligible employees together with providers of a range of health plan options that provide coverage during retirement. Here’s how it works:
- Employer opts for an exchange instead of traditional retiree medical plan
- Employer determines whether and how much to contribute towards the cost of the health plan
- Employer directs eligible participants to an online portal to select from a wide array of plan options
- Exchange recommendation solution guides participants through the decision and enrollment process and provides full customer service
- Employer has no risk of unpredictable costs nor administrative burden