Even if your employer has traditionally provided it, don't count on retiree health care being the same -- or even being there at all -- when you retire.
A new survey from human resources consultant Aon Hewitt shows that more than 60 percent of the firms surveyed -- both public and private -- intend to change how they handle retiree health care. Of those planning to make a change, 40 percent are already prepared to ask retirees to buy from the soon-to-be available exchanges mandated by the Patient Protection and Affordable Care Act.
It's not all bad news for those nearing retirement, says John Grosso, senior vice president of Aon Hewitt's health and benefits practice. While he says the need to save more is an "overarching theme" in all his company's retirement planning research, he thinks the changes to be brought about by the Affordable Care Act will actually make it easier for people to retire.
The Affordable Care Act prevents health insurance companies from refusing to sell insurance to people who have pre-existing conditions. It also puts some limits on what they can charge. And there are federal subsidies for people with moderate incomes.
Although many employers are revising and some are eliminating plans that provide health care to early retirees, "We don't see anything that discourages people from retiring before age 65," Grosso says.
For instance, a 60-year-old couple earning $60,000 a year -- about four times the federal poverty rate -- would be eligible for a subsidy to help them pay for health insurance. That kind of deal could encourage aging entrepreneurs to leave an employer and strike out on their own, while they still have plenty of time and energy to build a business, Grosso points out.
If you are already retired and currently participating in a retiree health care plan, the Aon study suggests there is little reason to fear it will disappear. Some 45 percent of employers who offer a health care plan to current retirees say they expect to make no significant changes. The remainder plan to do a better job of coordinating their coverage with the new health care law, but only a small segment plan to eliminate retiree health care coverage altogether.