Employment-based retiree health benefits: trends in access and coverage, 1997-2010.

Very few private-sector employers currently offer retiree health benefits, and the number offering them has been declining. In 2010, 17.7 percent of workers were employed at establishments that offered health coverage to early retirees, down from 28.9 percent in 1997. Between 1997 and 2010, the percentage of non-working retirees over age 65 with retiree health benefits fell from 20 percent to 16 percent. Because employers are under no obligation to provide retiree health benefits, except to current retirees who can prove that they were promised a specific benefit, and because (unlike defined benefit pension plans) employers are not under any obligation to pre-fund retiree health benefits, it is likely that employers will continue to make changes to those programs, especially for future retirees. Earlier research found little impact of reductions in coverage on retirees, but that may be because initial changes employers made to retiree health benefits affected future retirees as opposed to then-current retirees. Over time, more and more retirees have “aged into ” those program changes, resulting in the greater impact found in more recent studies. While many employers have dropped retiree health benefits, especially for future retirees, most that have continued to offer retiree health benefits have made changes in the benefit package they offer: raising