Public Sector Retiree Health Care Benefits: A View from the American States

Abstract

This paper reports findings of a survey on retiree health care benefits in the American states. It begins with an overview of the challenges the states face following the reporting of their unfunded liabilities for other (non-pension) post employment benefits, as required by GASB 45. Next, it reports survey data on the perceived effects of health care benefits on human resources goals (recruitment, retention, and retirement), the current structure of state retiree health care programs, and measures being considered and/or adopted to deal with retiree health care costs. Survey results show that the states have adopted cost containment strategies and cost-sharing programs. They have now begun to introduce preventive medicine and wellness efforts while continuing with further cost-sharing. A few states have even begun to contemplate major cost shedding options. The paper concludes with a discussion of the implications for retiree health care policy and human resource management.