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Small Business Employee Benefits and HR Blog

Large Employers Are Switching to Defined Contribution Health Plans

Note: This should not be taken as tax or legal advice

general motors defined contribution healthMany large employers are terminating traditional defined benefit retiree plans in favor of a defined contribution approach utilizing the individual market and Medicare.  

This approach relies on health reimbursement arrangements (HRAs), which retirees can use to pay for health care expenses and Medicare Part B and Part D premiums

The following companies (among others) have already decided to make the switch:
    • General Motors (GM)
    • Ford
    • Caterpillar
    • 3M