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MAJORITY OF TWIN CITIES EMPLOYERS OFFER MEDICAL COVERAGE TO RETIREES BUT RETIREES REQUIRED TO SHARE IN COST

MAJORITY OF TWIN CITIES EMPLOYERS OFFER MEDICAL COVERAGE TO RETIREES
                 BUT RETIREES REQUIRED TO SHARE IN COST
    MINNEAPOLIS, Nov. 19 /PRNewswire/ -- The Minneapolis office of the Wyatt Company recently conducted a Retiree Medical Plan Survey.  Forty- three Twin Cities companies responded, representing a total of over 500,000 active employees and 65,000 retirees.
    Survey results show that 83.7 percent of the employers who responded offer coverage to pre-age-65 retirees and 70 percent offer coverage to retirees age 65 and older.
    The majority of the employees responding require the retiree to pay either a nominal amount for coverage or 100 percent of the cost of coverage, while few require a "mid-range" contribution level.  However, contribution formulas that vary the retiree's contribution level based upon length of service and/or age at retirement are becoming more popular.
    While retirees tend to pay a greater portion of the cost of coverage than active employees, over 50 percent of the retirees age 65 and older have plans that provide a better benefit level than the plans of active employees.  This improved coverage results from the way these plans coordinate benefit payments with Medicare.
    "The high level of benefits that retirees have enjoyed for many years is becoming a significant financial burden for many companies. The introduction of Financial Accounting Standards Number 106 (FAS 106) has spurred many employers to reconsider and change their retiree medical plan designs and contribution formulas," said Robert Tobey, a Wyatt consultant responsible for the survey.
    One of the significant findings of the survey was how many employers have changed or are planning to change their retirement plans.  Of the companies that offer retiree medical benefits:
    -- 50 percent have changed their cost sharing formula or plan design in the last two years.
    -- 54 percent of those that changed in the last two years expect to change again in the next 2 years.
    -- 50 percent expect to change their cost sharing formula or plan design in the next two years.
    Wyatt's "Minnesota Retiree Medical Plan Survey Results" is available for purchase by qualified employers for $500.
    The Wyatt Company is an international consulting firm specializing in the areas of human resources, financial management and systems with 3,700 employees in 70 cities.
    -0-                            11/19/91
    /CONTACT:  Peter Miller, 612-921-8737 or Elizabeth Leffel, 612-921-8723, both of the Wyatt Company/ CO:  The Wyatt Company ST:  Minnesota IN: SU: KH -- MN013 -- 5046 11/19/91 14:42 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 19, 1991
Words:407
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