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Most Employers Will Continue Drug Coverage
WASHINGTON - Four in five businesses that provide prescription drug coverage for their retirees will accept a government subsidy next year and continue providing that benefit, according to a survey of 300 large companies.
"The widespread dropping of drug benefits that some had feared has been averted so far as business figure out what their long-term response would be," said Drew Altman, president and CEO of the Kaiser Family Foundation, which conducted the survey along with Hewitt Associates, a consulting company.
Under the Medicare law, the government provides businesses with a new financial incentive to continue providing retirees with prescription drug coverage: a tax-free subsidy equal to 28 percent of the retiree‘s drug costs.
The survey indicates the long-term future is less certain for employer coverage of prescription drugs. Looking ahead to 2010, only 50 percent of firms said they are likely to continue retiree drug coverage, while 22 percent said they likely won‘t, and 28 percent say they don‘t know.
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