ARLINGTON, VA, December 10, 2015 — Surveys of retirees and employers reveal a significant gap between what retirees recalled they were told about their retirement medical benefits before they retired and what employers believe they communicated. While 43% of retirees surveyed said their employers took no steps at all to help them understand and manage the cost of retiree medical benefits before they retired, just 9% of employers acknowledged they offered no help.
The employer survey was fielded in September 2014 by professional services company Towers Watson (NASDAQ: TW), and 144 HR executives at large and midsize employers that sponsor retiree medical benefits responded. In March 2015, Towers Watson surveyed 3,384 retirees aged 65 and older who formerly worked at similar large and midsize employers.
The surveys also showed that:
- Just over one-third (34%) of retirees said their employers communicated with them about the out-of-pocket costs of their medical coverage (costs not covered by an employer subsidy), versus the more than half (53%) of employers that said they did so.
- Just 19% of retirees said they were offered financial planning resources and decision-support tools to help them understand the role of medical coverage in their retirement planning, versus 41% of employers that said they did so.
“These results show a significant mismatch between what employers told us and what retirees said they experienced in preparation for health care costs, which are a significant retirement expense,” said John Barkett, a director for Towers Watson’s Individual Exchange line of business. “While the difference in employers’ and retirees’ opinions may be closing slightly, it’s evident that employers can do a better job of educating employees about retiree medical costs and benefit options as well as explaining more clearly the support retirees can expect with benefits after they’ve stopped working.”
Employer-Retiree Disconnect On Communicating About Medical Benefits
About the Surveys
Towers Watson surveyed 144 companies representing 2.1 million employees and nearly one million retirees in September 2014 for its 2015 Survey on Retiree Health Care Strategies. The survey yields insights into how employers are thinking about retirement health benefits, including the degree to which they prepare their future retirees to understand and manage the costs of medical benefits. The 3,384 retirees who responded to a Towers Watson survey in March 2015 are invited members of a survey panel made up of retirees aged 65 and older who are Medicare participants in Towers Watson’s OneExchange.
About Towers Watson
Towers Watson (NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 16,000 associates around the world, the company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Learn more at towerswatson.com.