Important news for retirees relying on health care benefits from a previous employer.

On Tuesday of this week, GM announced that it would no longer be providing health care insurance benefits to its salaried worker retirees age 65 and older. The GM announcement was stunning and it caught many current retirees off guard. An article in this week's Wall Street Journal detailed how current retirees will see their benefits eliminated in January 2009.

Many retirees rely on this coverage to supplement the benefits they receive from Medicare. To ease the blow, GM announced that it would increase the pensions of those affected by $300 per month. However, that increase is little consolation to retirees who are learning from researchers that an average 65 year old couple will face $225,000 in out-of-pocket medical expenses over the course of a typical retirement.

The take-away from the GM news is that retirees and almost-retirees can not be certain that health benefits promised by employers will always be available. In fact, IBM, Delta Airlines, Ford, and Coca Cola have all announced changes to the benefits promised to retirees. Furthermore, now that a firm with the stature of GM has announced what some view as "draconian" changes, there may be more announcements from other companies in the near future. In fact, the Journal article reports that one in five workers had access to employer provided retiree health benefits in 2003 compared with one in three workers as recently as 1997. Clearly the trend is towards fewer and fewer companies providing these important benefits.