Legacy Costs
Legacy Costs
For many businesses one of their biggest sources of disadvantage involves legacy costs. It used to be very traditional for companies to offer full retirement benefits to their retired employees including health insurance, dental insurance, and life insurance. With the spiraling costs of insurance many such companies that offer these forms of insurance to retirees based on past agreements are struggling immensely to keep a float. Today such plans are almost unheard of other than for top executives or government employees. Given that other private employers and companies in other countries don’t have such legacy costs this is a big burden on employers. These insurance rates keep going up which is making this a massive expense. Some companies though are attempting to limit these costs and are finding ways to charge premiums to retirees such as life insurance. In many cases they are being left with very little choice, as the alternative is often bankruptcy. Given this if you are a retiree who receives employer benefits you should keep an eye to the cost of these insurance plans for yourself and budget for the outside chance that you will need to pay for such coverage out of pocket. With many companies in turmoil you shouldn’t assume your coverage will last forever.
Tags: health insurance