Aging Work Force Requires Increased Care

Employers face a kind of Catch-22 when they employ an increasingly older work force. The talent shortage among younger workers makes retaining retirement-eligible employees an important company benefit. However, older workers are at higher risk of developing chronic illnesses, which can lead to increased claims and higher medical costs.

According to the Bureau of Labor Statistics (BLS), between 1977 and 2007, employment of workers 65 and older increased 101 percent. For men, the increase was 75 percent, but for women, the number jumped 147 percent. The number of workers age 75 and over is relatively small (0.8 percent of total employment in 2007), yet this group had the largest gain, increasing 172 percent during the same time period.

By 2016, the BLS estimates the number of workers over the age of 65 will soar by more than 80 percent.

Keeping Them at Work

Attitudes toward work and retirement are changing, and as life expectancies increase, fewer older Americans are choosing to leave the work force. Financial benefits, continued access to health insurance and the chance to remain intellectually and socially active make work an appealing option for many older workers.

Retaining older workers is also appealing to employers. In a recent study by Hewitt Associates of more than 140 midsized companies, more than 70 percent said the experience, knowledge and skills of older workers were worth offering retention programs to entice them to stay on the payroll.

According to recruitmentjobs.com, industries facing the biggest shortage of skilled workers include federal offices, manufacturing, utilities, transportation and health care. In response, these industries are adopting flexible schedules and phased retirement plans to accommodate older workers.

Some companies are even redesigning work areas and shifts for these employees. A truck manufacturer, for example, redesigned its plant to make working on the assembly line less strenuous. A national retail pharmacy chain's "snow-bird" program allows older employees — both retail staff and pharmacists — work part of the year in one area of the country and part of the year in another.

But at What Cost?

The aging American work force has a ripple effect on increased use of health care. For example, in 1999, 20 percent of family practice office visits were made by people 65 and older. This age group is expected to total 70 million by 2030. By then, researchers say seniors will make up more than 30 percent of physician office visits and 60 percent of family practitioners' hospitalized patients.

Research by the AARP showed that, on average, employees 50 to 65 years old use 1.4 to 2.2 times more health care services than workers in their 30s and 40s. However, according to the 2007 National Study of Business Strategy and Work force Development conducted by researchers at Boston College, only 36.7 percent of employers assessed the variance in health care costs by age of employees.

A 2007 analysis of MedStat insurance data from 100 companies showed that the cost of claims increases with the age of the insured, rising every 10 years for men starting at age 45 and for women at age 35. For the total insured population, the indexed average costs for health care claims rose from 0.83 at age 45 to 0.95 by age 65.

To learn how KePRO can help you manage health care costs for your entire work force, contact our business development professionals at 1.800.222.077.