Retiree Health Plans:

Health Benefits Not Secure Under Employer-Based System

HRD-93-125: Published: Jul 9, 1993. Publicly Released: Jul 9, 1993.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information on private-sector employers' reductions of retiree health benefits, focusing on the: (1) type of benefit reductions; (2) impact of Financial Accounting Standard (FAS) 106; and (3) federal courts' basis for allowing employers to reduce retiree health benefits.

GAO found that: (1) employers are controlling retiree health benefit costs by increasing premium contributions, deductibles, and copayments, modifying eligibility requirements, and using defined contribution plans; (2) shifting costs to retirees could make medical services unaffordable for some retirees; (3) a small percentage of employers have terminated retiree health plans, which could leave early retirees without health insurance; (4) although FAS 106 significantly impacts companies' financial statements by reducing income and stockholder equity and increasing liability, it does not directly impact their cash flows; (5) the Employee Retirement Income Security Act allows employers to modify their retiree health plans for current and future retirees; (6) federal courts have upheld employers' rights to modify or terminate health plans if they reserved the right to do so; and (7) retiree health benefits are not secure under the employer-based system, which may significantly affect health care reform.

Oct 29, 2015

Oct 27, 2015

  • retirement icon, source: PhotoDisc

    Social Security's Future:

    Answers to Key Questions
    GAO-16-75SP: Published: Oct 27, 2015. Publicly Released: Oct 27, 2015.

Sep 30, 2015

Sep 29, 2015

Sep 4, 2015

Jun 15, 2015

Jun 2, 2015

May 1, 2015

Feb 26, 2015

Dec 22, 2014

Looking for more? Browse all our products here