For which group of individuals have employers started using defined contribution models for medical benefits?

Employers are increasingly turning to defined contribution models for medical benefits specifically for retirees and their eligible dependents. This approach allows employers to allocate a fixed amount of money towards retiree health benefits, which retirees can then use to purchase insurance from private insurers or exchange marketplaces. This model provides employers with more predictable costs while giving retirees the flexibility to choose plans that best suit their needs.

Defined contribution plans are particularly advantageous for managing the rising costs and unpredictability associated with providing healthcare benefits to retirees, who may have significantly different health needs and costs compared to active employees. This trend reflects a broader shift within benefits strategies to contain costs while still offering some level of healthcare support to retirees.

The other groups mentioned—active full-time employees, full-time employees with dependents, and part-time employees—are typically more likely to be offered traditional defined benefit plans or employer-sponsored insurance due to different workforce dynamics and requirements for medical coverage.