Retiree health benefits are an important consideration for older workers making their decisions about retirement. Health benefits for retirees also provide an important supplement to Medicare for retirees age 65 and over. Large firms (200 or more workers) are much more likely than small firms (3-199 workers) to offer retiree health benefits. After falling dramatically in the late 1980s and early 1990s, the percentage of large firms (200 or more workers) offering retiree health benefits has remained relatively constant.
Availability of Retiree Benefits
- Thirty-three percent of large firms (200 or more workers) offer retiree coverage in 2005, similar to 36% in 2004 but down from 66% in 1988 (Exhibit 11.1).
- Retiree benefits vary substantially by firm size, industry, and the presence of union workers.
- Large firms (200 or more workers) are much more likely to offer retiree benefits than small firms (3-199 workers). Thirty-three percent of large firms offer retiree benefits, compared to just 7% percent of small firms (Exhibit 11.2).
- Among large firms (200 or more workers), state and local governments are more likely than other firms in other industries to offer retiree benefits (84% vs. 33%) (Exhibit 11.2).
- Large firms (200 or more workers) with union workers are significantly more likely to offer retiree health benefits than large firms without union workers—49% of all large firms with union employees offer retiree benefits, compared with 24% for all large firms that do not have union employees (Exhibit 11.3).
- Virtually all large firms (200 or more workers) that offer retiree benefits offer them to early retirees under the age of 65 (94%). A lower percentage (81%) of large firms offering retiree benefits offer them to Medicare-age retirees (Exhibit 11.4).
