Employee Benefits:

Trends in Retiree Health Coverage

T-HRD-90-51: Published: Jul 27, 1990. Publicly Released: Jul 27, 1990.

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GAO discussed company-sponsored retiree health coverage. GAO found that: (1) only about 4 percent of all companies provide retiree health coverage; (2) companies with retiree health benefits were generally larger, employing 40 percent of private-sector workers; (3) about 9 million retirees are currently in company-sponsored plans, and about 39 percent of those are under age 65; (4) 64 million of 96 million private-sector workers do not have retiree health coverage; (5) since 1984, fewer than 1 percent of companies have terminated retiree health benefits, but companies are taking measures short of termination to limit retiree health costs; (6) companies have changed health plan provisions to shift costs to retirees or reduce benefits, and appear to be doing so at an increasing rate; (7) retirees currently receiving health benefits and active workers who may expect to receive them when they retire have limited protection from termination under current law; (8) retiree health coverage has become a major concern for companies because retiree health costs have risen and are expected to continue increase dramatically in the future; and (9) companies' annual costs will increase from over $9 billion in 1990 to about $25 billion by 2010. GAO believes that Congress may need to act to preserve company-sponsored retiree health benefits.

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