Benefits

Fidelity Says Health Care Reform Law Cuts Retirees Costs

By Staff Report

Apr. 1, 2011

A 65-year-old couple retiring in 2011 without employer-provided retiree health insurance will need about $230,000 to pay future medical-related expenses, Fidelity Investments said in an analysis.


That’s down 8 percent from last year’s estimate of $250,000 and is the first annual decrease in the 10 years Fidelity has been making the projections.


The $20,000 decline in the estimate from last year was driven by provisions in last year’s health care reform law that expanded Medicare coverage of brand name prescription drugs once retirees’ drug costs hit a certain level.


While the savings produced by the health reform law are “a welcome relief to many seniors, it should be considered a one-time adjustment, at least for the time being,” Fidelity Executive vice president Brad Kimler in Boston said in a written statement.


Of the $230,000 needed to cover a retired couple’s health care expenses, Fidelity estimates 31 percent will go toward paying Medicare Part B and Part D premiums; 45 percent will be consumed by expenses not covered by Medicare, such as coinsurance and deductibles imposed by Medicare; and 24 percent for out-of-pocket prescription drug expenses.


A summary of the analysis, which was released March 31, is available at fidelity.com/inside-fidelity/individual-investing/2011-rhcce.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.


 


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

What’s New at Workforce.com?

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog

Benefits

What is Earned Wage Access (EWA)? A Few Considerations

Summary Earned wage access (EWA) programs are an increasingly popular way for employees to access their...

benefits, earned wage access products, payroll, time and attendance

workforce blog

Benefits

EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog

Benefits

Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness