Some of the changes brought on by the Patient Protection and Affordable Care Act (PPACA) may encourage employees to seek retirement earlier.
The healthcare expenses that arise during retirement are the factor that hold many back from exiting the workforce, as they may accumulate sufficient savings for other expenses but not be prepared to cover the cost of their medical needs. The PPACA, by helping to broaden the availability of health care coverage for those who leave the workforce, could substantially lessen the amount of preparation people need before retiring.
Experts told Plan Sponsor the effect might be particularly pronounced among employees between the ages of 55 and 60, who are not yet eligible for Medicare. At the same time, that age group may have pre-existing conditions that have traditionally made it challenging to obtain coverage for some.
Setting up phased retirement or incentives for older workers may be worth looking into in order to retain their talent and experience for longer. On the other hand, the changes may help employees secure their own retirement independently, reducing employers' role in aiding them. It will take time to determine the effects.
