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Big firms don't favor retiree health benefits


Seventy-three percent of large U.S. employers do not want to fund retiree health benefits but are in favor of providing access to insurance for retired workers, according to a new PricewaterhouseCoopers L.L.P. study released Tuesday.

The study, "Tailoring the Approach: Employer Attitudes and Healthcare Strategies Address Distinct Issues," gauged the thoughts of 135 top executives when it comes to staving off future health care cost increases.

"This (survey) means (employers) want to provide benefits to retirees, but they get stuck on the balance sheet," said Barry Barnett, principal in PricewaterhouseCoopers' Global Human Resource Solutions Group in New York, adding that there is no easy way for employees to adequately plan to pay for retirement obligations like health care. Companies have suffered losses trying to do so, he said.

In addition to taking a hard line against funding retiree benefits, 62 % of executives surveyed said their companies should require employees who exhibit unhealthy behaviors--from obesity to smoking--to pay a larger share of their health benefits costs.

Mr. Barnett said companies are paying more attention to which employees are causing a strain on costs.

"As (employers) look at the data and...look at where the claims dollars are going...(the costs) come from the small pool of employees leading bad lifestyles," he saidOverall, the survey found that 87% of employers do not wish to abandon employer-sponsored health insurance and that 94% believe they could do a better job of supporting their employees in managing their health care to reduce overall costs.

As for the financial health of the companies surveyed, 43% of executives said their profits suffered as a result of health care costs, and 22% said health care costs will force them to lower wage increases for present employees.

The survey includes executives whose companies employ an average of 9,350 employees and earn $2.13 billion in revenue.