Are you ready for the retirement wave?

A little less hair, a few more laugh lines. You see the signs every day, but not their implications: With each passing year, more and more employees are getting closer to retirement.

Over the last decade, according to the U.S. Bureau of Labor Statistics, the number of seniors in the labor force has grown nearly 60 percent.  By 2020, one quarter of the U.S. workforce will be 55 or older.

Although research shows that many employees plan to work after age 65, the majority will not stay on the job for more than 4-5 years.  Yet, as a Washington Post article reports, human resource experts, workers and executives from a range of industries agree businesses are largely unprepared for this wave of retirements.

As you plan for how this will affect both your business and employees, health insurance should be a key consideration. A report from the Urban Institute, “Will Healthcare Costs Bankrupt Aging Baby Boomers?”, states that rising health care costs pose a significant threat to boomers’ retirement security. Even those with Medicare coverage will still be burdened with substantial out-of-pocket expenses from premiums, deductibles, copays, and holes in their benefit packages.

For those considering retirement, having access to affordable health care options could greatly influence their decisions. Companies without a retiree medical program may see more of their employees staying longer in their jobs, which has its benefits and drawbacks.

Until recently, most businesses considered the costs of such programs prohibitive. In fact, data from the Employee Benefits Research Institute showed that only 6.1 percent of private-sector employers provided health insurance to Medicare-eligible retirees – a 40 percent drop-off from 1997.

Today, however, post-retirement health insurance can be a viable benefit option, even for small and mid-sized businesses. With various types of defined contribution plans, organizations can provide both active employees and retirees with a fixed dollar amount for them to then purchase individual health coverage.  Even companies that currently offer retiree coverage might consider defined contribution plans to reduce their financial exposure and establish predictable budgets for retiree health coverage.

For employers, the benefits of such plans are obvious: You control exactly how much you’ll contribute each year to help defray some of your retirees’ health care expenses. As an added bonus, you’ll also have a more robust benefits package when competing for workers. And for employees, when they feel the  time’s right to retire, the lack of health insurance won’t hold them back.



Rising benefit costs is a challenge for all companies. GlidePath, a new solution from Blue Cross Blue Shield of Michigan and Blue Care Network, offers your mid-size company an innovative way to manage spending and risk. It can transform the way you finance your company’s health insurance coverage. With GlidePath’s defined-contribution solution, you can determine your company’s health benefit budget and simplify the administrative work that goes along with offering health benefits.


Photo Credit: SalFalko

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