Government is hoping to persuade insurers not to hike up health premiums for people aged 65 and over to encourage businesses to keep more older staff in the workplace.

Bermuda has no statutory retirement age, but many companies require workers to retire at 65 because of the high cost of health insurance premiums.

Most private pensions also begin at 65 and staff also start to receive their government social insurance payments at that age.

Government has set up a working committee to find out when older workers need more health care - and more insurance cover - in a bid to keep older workers in employment.

Labour and Home Affairs Minister Terry Lister told The Royal Gazette yesterday that persuading insurers not to spike insurance premiums at 65 was key.

There are no plans to introduce a statutory retirement age, nor will Government legislate to keep the premiums down, he said. Instead, it will leave premium rates in the hands of insurers.

The initiative was welcome yesterday by Bermuda Employers Council, but the Health Insurance Association of Bermuda said it knew nothing about the committee and had not been consulted.

Mr. Lister said yesterday that with 22 percent over-employment, resulting in the need to bring in foreign workers, it made no sense for Bermudians who wanted to keep working to be forced to retire.

"We are trying to determine how to best meet the employment needs of this country, which has 22 percent over-employment, therefore it seems rather foolish to send people home who would like to and are able to work," he told The Royal Gazette.

"We are looking to see what changes we need to make to allow us to get to a position where companies feel comfortable continuing to have people, or hiring people, who are 65, and the employee feels comfortable staying on, because there are a lot of talented people lost when they retire.

"If we put in a mandatory 65, we would be putting that in for the first time, so we've been advised not to bother with that.

"It is believed a person's healthcare needs are far greater when they are over 65 than when they are under 65.

"We are attempting to find out what the break-even point is - when does it really jump? Is it 65? Is it 71?

"We are getting the view from employers to get them in a position from the insurance industry, that says this is how we want to treat people from there on in.

"Maybe the rates should not jump so much at 65 or 66, but jump like crazy at 71.

"I think the (insurance) industry is receptive. They are concerned about legislation to keep people in the workplace and we've said we understand that and we wont do that."

The committee, which also includes Community Affairs Minister Randolph Horton and Finance Minister Eugene Cox, started meeting in March and is expected to prepare a report to Cabinet by the end of summer.

The committee has been studying reports in Bermuda and overseas into the healthcare needs of the elderly.

Bermuda Employers Council executive director Andrea Mowbray said: "We would like to see a flexible retirement age, nothing mandatory.

"Most employers, if they have productive older employees, would like to keep them, but the only problem is the health insurance payments they face at 65.

"Social insurance payments are still paid by the employer although they stop for the employee, which isn't much of an incentive to keep them on.

"We need to somehow encourage people to be retained, because companies are forced to let them go because they can't afford to pay the premiums.

"The insurance companies say there are more claims from people in that age bracket, but I would argue that these people have been paying into the system for years and years, and they should be given some concession, not to mention the fact that people are living healthier lives and are living longer."

Gerald Simons, the president of the Health Insurance Association of Bermuda, said: "I was not aware of the existence of this committee, and I haven't been approached by the Minister, but I would be happy to discuss it with him.

"Most employers have an average premium for all their active employees so the premium is spread across the workforce, so I'm not sure what the issue is to be honest.

"The broad principle is that the older the person is, the more claims they make, and what is surprising is that the total claims made by older people is more than that of younger people, even when you take into account the subsidy for the hospital stay."