NEW YORK - Employers increasingly are introducing measures to hold off rising retiree health care costs, says a new study by William M. Mercer Inc.
Among the changes by employers are: increasing retiree contributions; capping employer contributions; tightening eligibility requirements; increasing employee's co-payments; and terminating plans altogether to cope with the rising costs.
The Mercer survey is based on 850 actuarial valuations representing more than $40 billion in retiree medical liabilities and more than 3 million active and retired employees.
The fourth annual study found the median claim for retirees not eligible for Medicare rose 11% from 1992 to 1993, while the average deductible for pre-Medicare health insurance plans rose to $204 from $187.
And, the median claim for retirees eligible for Medicare rose 13%, to $983 from $872, while the average deductible increased to $189 from $179.
For the study, Mercer actuaries lowered their 1994 assumptions for both the rate of interest and medical costs by one percentage point from last year's levels; the discount rate for 1994 was 7% and the long-term medical cost trend was lowered to 6%.
Changes in accounting rules for retirement benefits other than pensions have resulted in large increases in financial statement liabilities, according to George B. Wagoner, a Mercer managing director based in Richmond, Va.
Mr. Wagoner cited the changes in health plans offered by corporations as evidence that despite the cost of such plans, "American employers appear ready to fix, rather than forgo, them."