Citing a projected rise in health insurance costs following enactment of the Patient Protection and Affordable Care Act, 3M has announced it will soon drop retirees from its own health coverage and instead pay them to sign onto Medicare-backed insurance.
Starting in 2013, the company will reimburse retirees for the cost of Medicare coverage.
3M was short on details for what happens to retirees who are too young to be eligible for Medicare. The company said it will still reimburse at least some health insurance costs for insuring retirees under age 65. It will drop those retirees from its insurance rolls in 2015.
3M’s goal: to cut health care costs by having other insurers assume the risk for the aging group.
The federal health care reform legislation does provide a federal fund from which employers will be able to collect reimbursements in exchange for keeping retirees on company plans. 3M says it won’t take those funds and will farm out the risk to other carriers instead.