3M Co. will drop retirees from health plans, steer to Medicare

[Trajan]

This was actually indicative and part of an early one of the "lets pass it and see whats in it ", 'quick fails' as AP reported back in March, almost immediately after the passage of the bill;

The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.

In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.

With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.

http://www.google.com/hostednews/ap/article/ALeqM5gmzNv5LYXOA6UM_XmUHdOe9augtQD9ELVL3G1

Now-

3M Co., citing new federal health laws, said Monday it won't cover retirees with its corporate health-insurance plan starting in 2013.

Instead, the company will direct retirees to Medicare-backed insurance programs, and will provide reimbursement for that coverage. It'll also reimburse retirees who are too young for Medicare; the company didn't provide further details.

The company made the changes known in a memo to employees Friday; news of the move was reported in The Wall Street Journal and confirmed Monday by 3M spokeswoman Jackie Berry.

In its memo, the company said the new health-reform act would create new opportunities for people in their 50s and 60s to find affordable insurance.

Maplewood-based 3M (NYSE: MMM) is one of the first large companies to indicate that it won't tap a large federal-government reimbursement program created by Congress as part of the health insurance reform package, The Wall Street Journal reported. The rebate program was meant to encourage employers to keep in place their health-insurance plans for retirees.

3M said the new policy will begin in 2013 for retirees who are 65 and older and qualify for Medicare. Non-Medicare eligible retirees and their dependents will join the program in 2015.

3M noted that these changes affect current and future retirees of 3M, regardless of their retirement date.

The new policy is likely to save 3M money because it reduces the risk to the manufacturer for rising medical costs, according to a University of Minnesota professor interviewed
Monday by Minnesota Public Radio.

3M Co. will drop retirees from health plans, steer to Medicare - Minneapolis / St. Paul Business Journal

the bill set aside 5 billion for a fund to, err, SUBSIDIZE the retirees plans to keep them off medicare....seems to me 3M has did their own accounting and found that they are better off just letting them go....

In the end, so much for keeping your plan and your doctors etc.
This along with other ancillary effects like blowing up the numbers of medicare patients which will drive the ratio the of doctors (who accept it) lower by intro. of the extra patients ( access issues, hello) and the coming battle over Doctors pay for seeing these medicare patients......

The 3M decision is just part and parcel of the same issue. I am sure there will be a cavalcade of others driving a cascade effect....I wonder if Sibelius will call up 3M and threaten them?

heres a link to the issues at hand..ala WSJ as well;

3M to Change Health-Plan Options for Workers - WSJ.com

the bill set aside 5 billion for a fund to, err, SUBSIDIZE the retirees plans to keep them off medicare....seems to me 3M has did their own accounting and found that they are better off just letting them go....



que announcer- shamrock facial hair, time to tell us how this is actually a benefit and going according to plan........annnnnd you're on!

 

[waltky]

Companies dumpin' healthcare costs on retirees...

More Employers Shifting the Cost of Healthcare to Retirees
April 21, 2014 — For a growing number of Americans, healthcare may be one of the largest expenses during retirement. Take for example a 65-year old couple who retired in 2013 and is relying on Medicare to foot the bill for their healthcare. They will need an estimated $220,000 to cover their health-related expenses, excluding long-term care, dental, and over-the-counter medications, according to a Fidelity Benefits Consulting report.

The reason for the daunting costs is that the 65-year-old couple in this scenario doesn't have employer-provided retiree healthcare coverage. An increasing number of Americans may find themselves in this position as the number of employers who are no longer offering employer-sponsored retiree health plans grows. A new Kaiser Family Foundation report shows that between 1988 and 2013, there has been a steady downward trend among employers who provide health benefits to retirees – from 66% to 28% at large (200 or more employees) companies and from 40% to 28% overall. This erosion, coupled with the number of newer companies that have never offered retiree health benefits, leaves fewer than 20% of workers with employer-sponsored health plans in retirement.

Many companies, according to the same report, are continuing their plans but shifting the burden of costs in part or wholly to the retiree. These health plans pay a portion of Medicare's cost-sharing and may provide coverage where Medicare does not.

Either way, employees need to plan accordingly for their retirement as the burden of healthcare costs shift to them. "[T]hose who are already retired and are losing healthcare benefits ... should seek out a reputable Medicare Supplement Company," says Michael H. Baker, manager at Vertex Captial Advisors. Those who are not yet age 65 may turn to the health exchanges. "Losing coverage would be a qualifying event that allows one to enroll into the exchange after the deadline we just passed," he says.

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