Other Postemployment Benefits (OPEB) is an umbrella term that characterizes retirement benefits, other than pensions, that are offered to employees of state agencies and participating political subdivisions who meet designated age and/or service related eligibility criteria. The most significant costs associated with OPEB benefits are for employer-subsidized health care for retired employees.
Nearly every state and most local governments provide access to health benefits to retired employees, and, in most cases, this coverage includes spouses and dependents. This employer-subsidized coverage typically serves as the primary health coverage until the retiree reaches age 65, when it becomes secondary to Medicare. The level of benefits, and their associated costs, depends on an assortment of factors including eligibility requirements, benefit type, and the plan’s actuarial assumptions and methods.
In 2015, approximately 80 percent of state government units offered health insurance to retirees under age 65 and approximately 70 percent offered the benefit to those over age 65. These percentages are essentially the same for large local governments (over 10,000 employees), with smaller local governments less likely to offer insurance for either