The survey [by Towers Perrin] finds that pre-65 retirees, who are not yet eligible for Medicare, will be hardest hit as they attempt to balance fixed incomes with steady increases in health coverage costs. At the same time, the survey also reveals that many employers are missing significant opportunities to deliver retiree benefit value while saving money and improving program effectiveness.

According to Towers Perrin, surveyed employers’ total health benefit costs for retirees will increase 6 percent for pre-65 retirees and 4 percent for post-65 retirees in 2010. While these rate increases are consistent with past experience, the effect on retirees is significant. Today, only 45 percent of survey respondents subsidize retiree health care coverage in some form. That figure reflects a steady decline over the past 20 years. In addition, many employers have put caps on their premium subsidies and, because plan costs are now well in excess of those caps, many retirees now bear the full brunt of cost inflation.

. . . Among surveyed employers, the total annual cost for pre-65 retiree health coverage has increased to $7,596 for a single retiree in 2010, compared with $5,184 for a single active employee. The 2010 cost for family coverage (for the increasing group of retirees that still have dependent children) is $19,596 -- nearly 31 percent more than comparable costs for family coverage for active employees.

. . . With health care reform destined to drive changes in employer benefit plans and increase already high program costs and administrative burdens, employers need to ensure that every dollar invested in health benefits is wisely spent, the study advises. Not surprisingly, that scrutiny applies equally to benefits for actives and retirees.

The rest of the story . . . .