Health Insurance Exchanges

As employers look to trim retiree medical obligations, they are considering whether to establish health reimbursement arrangements (HRAs) for retirees to buy insurance from insurance exchanges established under the Patient Protection and Affordable Care Act (PPACA)—a so-called “soft landing.” The exchanges raise new issues, however, that require close consideration.

Employer-provided retiree medical coverage has been on the wane for some time. The introduction of insurance exchanges is expected to expedite the curtailment and elimination of these benefits, because individuals will have full access to individual health insurance policies through the exchanges. Although coverage through the exchanges should be available at least by 2014, there are possible impediments to such a strategy.