We’ve all been hearing about the anticipated changes for 2014. Specifically, state run health insurance exchanges. However, too many consumers have not thought about employers considering using these exchanges as part of their employee benefit package, let alone the benefit package for retirees.
According to a SmartBrief summary of an Aon Hewitt survey, as published in a recent Business Insurance article, “Health insurance exchanges are gaining favor among employers. Some 60% of those responding to a survey say they are reconsidering health coverage options for their Medicare-eligible retirees and are open to using exchanges. According to the survey, almost 20% of respondents are connected with a private insurance exchange and two-thirds are looking into the use of private exchanges in the future.”
“…some employers may give retirees a fixed dollar contribution, with retirees applying that contribution toward the premium charged by the plan provider. If the premium is less than the employer contribution, for example, the retiree could apply the difference to pay for out-of-pocket expenses, such as costs that fall under a plan’s deductible. In other cases, the employer makes the exchange available to retirees but does not contribute towards the premium.”
MarketWatch says Aon Hewitt surveyed “550 companies covering almost 4 million retirees…The economics of providing traditional employer-sponsored retiree health coverage are changing, and employers are seeking the most cost-effective and tax-efficient delivery models,’ said John Grosso, a senior vice president in Aon Hewitt’s Health & Benefits practice. ‘Retiree exchanges provide access to these individual market efficiencies, along with a wider choice of health plans than exists in the traditional employer-provided retiree health plan. Very often, retirees can purchase individual Medicare Advantage, Medigap or Medicare Part D plans at lower rates than the employer can offer for comparable coverage due to the federal subsidies, Medicare Part D program enhancements and market-based competition found in the individual market.”
We’d like to hear from you. Is your employer planning to offer health insurance exchanges for those that are Medicare eligible? Are they offering a fixed dollar amount toward medical care? Or are they simply making the exchange option available with no monetary contribution? Please share your stories in the comment section below, or on our Facebook page. We look forward to connecting with you!