From the April 2013 issue of Benefits Selling Magazine •Subscribe!

Workers delaying retirement to keep health benefits

More and more workers are planning to work longer—just  so they can keep their health benefits.

According to new research by the nonpartisan Employee Benefit Research Institute, more than half of employees say working longer is their plan so they can keep their employer-sponsored health insurance.

If health benefits were guaranteed upon retirement, 27 percent said they would retire earlier than planned—up from 15 percent in 2003, the study found.

Still, the report notes delaying retirement might be wishful thinking. Only 19 percent of retirees say they were able to work longer to continue receiving health insurance through their jobs, the EBRI report says.

The report underscores the problem many older workers and retirees face with health benefits. EBRI last fall reported fewer employees are likely to get health benefits in retirement as employers drop or change the benefit.

Additionally, health care costs comprise a significant chunk of seniors’ total spending: 9 percent for those adults aged 50 to 64, 12 percent for those 65-74, and 15 percent for those 75-84.

Paul Fronstin, director of EBRI’s Health Research and Education program and author of the report, says the Patient Protection and Affordable Care Act might change the labor-market dynamics of older workers.

Retirees could stand to benefit from exchanges, where they can buy health insurance, as well as other insurance-market reforms including guaranteed issue, modified community rating, and premium and costsharing subsidies for those under 400 percent of poverty, as well as increased health plan choices, Fronstin says.

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