Dive Brief:
- In a push to cut expenses, the newly merged Kraft Heinz Co. is having its retirees move to health exchanges instead of company-sponsored healthcare coverage, reports Bloomberg.
- The change applies to 15,000 Medicare-eligible retirees who “will have a selection of health plans that provide equal or better benefits than our group coverage at a similar or even lower cost,” according to a Kraft Heinz spokesman.
- Many agree that the move will save the company large sums of money, but union reps in cities with Kraft Heinz plants say that it will hurt workers by impacting prescription coverage.
Dive Insight:
Kraft Heinz is also shifting its retirees away from pension plans with a voluntary program that encourages certain former Kraft employees to receive their pension in an immediate lump sum or through annuity payments, reports Bloomberg.
Kraft Heinz isn’t alone in trying to pare down retiree healthcare costs. Moves like this not only save money in the short-run, but also help companies mitigate the effects of the Affordable Care Act excise tax on high cost plans (the Cadillac tax) that will go into effect in 2018, according to Aon Hewitt.
Kraft Heinz will provide a small supplement so that retirees can buy their own insurance, Bloomberg reports.
