Jul 13, 2012 --- Provisions of the Patient Protection and Affordable
Care Act (PPACA) could cause employees to retire earlier because of health care
coverage available after leaving their companies. ---
have accumulated enough wealth to stop working but do not have adequate health
care savings for retirement, Brad Kimler, executive vice president of benefits
counseling at Fidelity, said during a Fidelity webinar hosted by PLANSPONSOR.
could particularly benefit employees ages 55 to 64 who may be contemplating
retirement but are not yet eligible for Medicare, Mike Thompson, principal of
human resource services at PwC, told PLANSPONSOR. In addition, this age
group may have previously had trouble finding coverage because of pre-existing
conditions, he said.
With health care
coverage made easier, employers may need to provide alternative incentives—such
as phased retirement—to keep their staff, said Arthur Noonan, senior retirement
consultant at Mercer. Companies may not want employees to retire earlier if
knowledgeable staff will be lost, he said.
On the other
hand, some employers may be delighted about the PPACA because it gives employees
more confidence that they can afford health care during retirement, Noonan
said. It also could save companies money if the reform prompts them to stop
offering retiree medical benefits. Companies providing retiree medical could
still provide employees with an allowance but direct them to the exchanges, he
employers are still trying to figure out how to afford health care,” Thompson
said. “This could provide an easier way to save.”