Employers are taking advantage of health care reform’s retiree medical options to help employeesprepare for retirement and enable current retirees to obtain morecost-effective health care coverage, according to the Sixth AnnualEmployer Survey on Retiree Medical Strategy.

The survey by Towers Watson and the International Society ofCertified Employee Benefits Specialists (ISCEBS) gathered responsesfrom almost 250 large employers, and found that the majority havebeen spurred on by federally subsidized insurance options, MedicarePart D enhancements and “Cadillactax” concerns.

“Cost inflation, tax law changes and accounting rules influencehow employers have defined their offer of health care benefits toretirees. Many employers have struggled to continue providingvaluable benefits while managing their financial commitment,” said Stephen Parahus,senior consultant with Towers Watson.

“Now that health care reform has created new options forretirees to purchase cost-effective individual coverage, employersare seizing the opportunity to assess their current approach tomanaging retiree health care benefits.”

For Medicare retirees, many employers have converted theircurrent Retiree Drug Subsidy programs to Part D Employer GroupWaiver Plans (EGWP) or plan to do so in the next two years in orderto take advantage of the additional funding available to Part Dplans.

Five percent of employers have put an end to group plansponsorship all together and are instead helping Medicare retireesbuy higher-value medical and pharmacy insurance in the individualmarket through Medicare coordinators.

Doing this helps employers reduce their financial commitmentwhile seeing that retirees have access to good coverageoptions.