Retiree health benefits are an important consideration for older workers making decisions about their retirement. Health benefits for retirees also provide an important supplement to Medicare for retirees age 65 and over. Large firms are much more likely than small firms 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-five percent of large firms (200 or more workers) that offer health benefits to their workers offer retiree coverage in 2006, similar to 33% in 2005 but down from 66% in 1988 (Exhibit 11.1).
- Retiree benefits vary substantially with firm size, industry, and whether workers are unionized.
- Large firms (200 or more workers) are much more likely to offer retiree benefits than small firms (3-199 workers). Among firms that offer health benefits, 35% of large firms offer retiree benefits, compared to just 9% of small firms (Exhibit 11.2).
- Among large firms (200 or more workers) that offer health benefits, state and local governments and firms in the transportation/communications/utilities industries are more likely than firms in other industries to offer retiree benefits (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—50% of all large firms with union employees that offer health benefits offer retiree benefits, compared with 27% 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 (77%) of large firms offering retiree benefits offer them to Medicare-age retirees (Exhibit 11.4).
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