Significant Reductions in Corporate Retiree Health Liabilities Projected If Medicare Eligibility Age Lowered to 60

T-HRD-92-7: Published: Nov 5, 1991. Publicly Released: Nov 5, 1991.

Additional Materials:


Office of Public Affairs
(202) 512-4800

GAO discussed company-sponsored retiree health benefits. GAO noted that: (1) about 9 million private-sector employees rely on employer-provided health benefits; (2) a new Financial Accounting Standards Board accounting rule will burden companies by compelling them to acknowledge substantial unfunded retiree health liabilities; (3) the proposed change in liability would also provide considerable financial relief to companies by substantially reducing their pay-as-you-go costs (PAYG), accrued liabilities, and prefunding costs for retiree health benefits; (4) companies and industries with many retirees under age 65, older workforces, and industries with benefit packages would likely experience the greatest reductions in costs and liabilities; (5) the change in liability entails a substantial expansion of Medicare program costs, which would be borne in part by all employers and their employees through higher taxes; (6) companies' 1991 PAYG costs of $11.4 billion would have decreased 35 percent if the age of Medicare eligibility had been lowered to 60 and companies' accrued retiree health benefits would have dropped about 30 percent; (7) if companies were to prefund retiree health benefits, they would make annual contributions for benefits accrued during the year and for the amortization of any existing unfunded accrued liabilities; and (8) companies' 1991 prefunding costs would have dropped about 17 percent if the age of Medicare eligibility had been lowered to 60.

Mar 19, 2018

Mar 8, 2018

Feb 20, 2018

Feb 8, 2018

Feb 5, 2018

Jan 30, 2018

Jan 23, 2018

Jan 17, 2018

Jan 16, 2018

Looking for more? Browse all our products here