Of large firms that offer retiree health benefits to pre-65 retirees, 84% have a cap on their largest plan for their future liability of these benefits. In these firms, about 53% report that they have already hit the cap (which means that beneficiaries are responsible for funding much or all future cost increases unless the firm adjusts the cap), and another 28% of these firms estimate that they will hit their cap within one to three years. The picture is similar for retiree benefits offered to 65+ retirees, where 89% of firms with a cap report they have a cap on their largest plan. In these firms, 56% report that they have already hit the cap, and another 27% of these firms estimate that they will hit their cap within one to three years.

Notes: Based on responses from private-sector firms with 1,000 or more employees that offer retiree health benefits.

Source: Kaiser Family Foundation/Hewitt Associates, Current Trends and Future Outlook for Retiree Health Benefits: Findings from the Kaiser/Hewitt 2004 Survey on Retiree Health Benefits, December 2004, Exhibits 7 and 8, at http://www.kff.org/medicare/7194/retiree_ben_sec2.cfm.