2012 Hot Topics in Retirement - Aon

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44 Aon Hewitt Prescription Drug Coverage Filing for the Medicare Part D Retiree Drug Subsidy (RDS) is still the most popular prescription drug coverage strategy, but employers are continuing to move away from it. For 2012, 57% of respondents reported that they will use this approach—down from 65% a year ago. In addition, only 40% stated that they anticipate using this approach in 2013. 2012 and Projected 2013 Medicare Rx Strategy for the Largest Age 65+ Plan Strategy O�er Rx coverage and file for the 28% RDS Contract with a Medicare Rx plan (PD/EGWP) to provide at least Part D Rx coverage Supplement or wrap-around individual Medicare Rx Part D coverage through the group program Discontinue group-based Rx coverage with no employer subsidy Discontinue group-based Rx coverage but provide an employer subsidy and source coverage through the individual market File with CMS to become a Medicare Rx Part D plan Actual 2012 57% 16% 15% 4% 6% 3% Projected 2013 40% 28% 13% 8% 9% 2% (n=196) (n=187) HSA-Compatible One health care reform provision is an excise tax on high-value health plans. This may have employers looking to new strategies for providing pre-65 retiree medical coverage. One possible strategy is to o�er early retirees a program that combines a high-deductible health plan (HDHP) with a health savings account (HSA). About one-quarter of employers o�ering health care to pre-65 retirees currently o�er an HSA-compatible HDHP. Note: The excise tax does not go into e�ect until 2018.
Changes to Benefits From 2011 to 2012 Percentage of Employers O�ering HSA-Compatible HDHP Yes 24% No 76% (n=219) Examining actual changes in retiree medical benefits that were made from 2011 to 2012, around three-fourths of all employers asked their retirees to increase their premiums for pre-65 coverage. Changes to Pre-65 Retiree Health Benefits From 2011 to 2012 Pre-65 Changes Increased retiree contributions to premiums Increased retiree plan design cost-sharing requirements Tightened restrictions on new retiree eligibility Introduced an HSA-compatible HDHP (high-deductible health plan) Terminated subsidized benefits for some or all future retirees Introduced a new premium subsidy cap for a group that was previously uncapped Terminated subsidized benefits for some or all current retirees Moved to a pure defined contribution subsidy approach through a health reimbursement arrangement (HRA) Facilitated retiree purchase of individual medical insurance Other (n=131; multiple responses) Percentage of Plans 73% 34% 12% 12% 11% 6% 5% 2% 3% 5% Aon Hewitt 45
Page 1 and 2: Consulting/HR Outsourcing Retiremen
Page 3 and 4: 4 10 14 33 42 48 2012 Hot Topics in
Page 5 and 6: Enhanced Automation and Individuali
Page 7 and 8: Defined Contribution Plans: Increas
Page 9 and 10: Retiree Medical Plans: Reducing Cos
Page 11 and 12: Defined Benefit Status —Among Spo
Page 13 and 14: Retirement Plan Initiatives for 201
Page 15 and 16: Employers understand the importance
Page 17 and 18: Initial Contribution Rate Default U
Page 19 and 20: Contribution Escalation Getting ind
Page 21 and 22: Roth Most financial experts agree t
Page 23 and 24: Employer Matching Contributions Inv
Page 25 and 26: Current and Future Actions on Targe
Page 27 and 28: Barriers to Adding Retirement Incom
Page 29 and 30: Communication Initiatives Many empl
Page 31 and 32: Managing Risk and Plan Expenses Ove
Page 33 and 34: Defined Benefit Plans Likely Change
Page 35 and 36: Likely Actions Planned in 2012 Risk
Page 37 and 38: Confidence and Priority Level of Ri
Page 39 and 40: Pension Plan Funded Status With his
Page 41 and 42: Funding Policy One-half of responde
Page 43: Percentage of Employers With a Pre-
Page 47 and 48: Likely Changes to Retiree Health Be
Page 50: About Aon Hewitt Aon Hewitt is the

2012 Hot Topics in Retirement - Aon

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