Retiree Health Benefits

A change in corporate accounting rules may have a profound effect on health insurance for retired workers. Under the new rule, due to take effect at the end of next year, companies will have to show the projected costs of providing health insurance benefits to their retirees as a liability on their annual financial statements. In many cases, the change will result in a significant loss in reported earnings. To minimize the potential losses, a number of firms have begun asking retirees to shoulder a greater part of the costs of their coverage. Some companies have dropped coverage for retirees altogether. The drop in retiree health benefits adds one more dilemma to the broader crisis of health care in America. An estimated 37 million people lack any insurance at all to cover health-care costs, which now are rising by about 20 percent each year.