It’s hard to believe that this course is already halfway over!
It is my opinion that for a company to offer health insurance as
part of their post-retirement package is a risk for the company
because, as people get older, their medical bills get more expensive
and if the retired employee stayed on the health insurance they
would be offered the same insurance as a current working employee
so a company may consider this as a liability. Also, the insurance
coverage offered in the post-retirement package may not be enough
to cover all of the retired employee’s medical charges. Companies
must consider all variables for health insurance coverage, this
includes the different variables such as gender, cost increase, early
retirement, longer life expectancy, and location of the retired person.
In doing all of the necessary research, this can be costly and time-
consuming for the company.
When it comes to a pension plan for a retired person, during an
employee's time of work, the employee and the company put money
into a fund that is invested and generates more money over time for
the employee for when they retire or reach the retirement age. The
difference is that a health insurance plan will require a larger risk for
the company, while a pension plan will help the company account for
the benefit by contributing a sum of money during the course of
employment and lower the liability at the end of the employee's time
of work.
A company would most likely select a pension plan because it
would make sense for the company since it ensures that when the
employee retires they will not be left with nothing, but if done
properly the employee will have a pool of money to live off of for the
rest of their life, including buying their own health insurance.
With this being said, it would make the most sense to me for a
company to offer life insurance as part of their post-retirement
package since most employees will have already had life insurance
through the company over the course of their employment. This
means that they have already contributed money towards the policy
and, in turn, may save the company more money in the long run.
