Headlines about "Health plans - retiree coverage"
Gathered from the web by the editors at BenefitsLink.com.
Proposals to Raise Military Retirees' Health Care Premiums Rejected
"The [Armed Services Committee] advanced the fiscal 2013 National Defense Authorization Act ..., approving a 1.7 percent pay raise for military service members next year as well as limiting increases to enrollee pharmacy co-pays under the TRICARE program.... But the panel rejected the administration�s recommendations to raise premiums for military retirees based on their retirement pay, among other fee hikes." (Government Executive)
[Guidance Overview] Minnesota State Agency to Pay Damages Plus Insurance Coverage to Resolve Case of 'Age 55 Cliff' Discriminatory Early Retirement Plans
"This decree ... resolves the last in a series of cases brought by the EEOC against Minnesota state agencies regarding early retirement incentive plans contained in collective bargaining agreements for certain employees. The incentive plans provided that the employee had to retire by age 55 to obtain the incentive, and would lose it if he or she worked longer, according to an EEOC statement. For an employee who did retire by age 55, the employer continued to pay the employer's share of the insurance premiums which generally ranged from 85 percent to 100 percent of the total amount of the premium -- and continued to do so until the retiree reached age 65. For an employee who retired after age 55, the employer paid nothing, and the cost of retiree insurance fell entirely on the retired employee." (Wolters Kluwer Law & Business / CCH)
Michigan Senate Bill Would Raise Lawmakers' Share of Retiree Health Contribution to 20% of Total Premium
"The Michigan Senate is currently debating legislation that would require retired public school, community college and university employees to shoulder 20 percent of [the total cost of] health insurance premiums. The requirement mirrors a new law requiring existing public employees to contribute 20 percent of health insurance premiums from their paychecks. The [Detroit News reported May 1, 2012,] that just seven months ago the Legislature and Gov. Rick Snyder approved a new law ensuring all but two of the 38 senators would get lifetime health insurance at age 55 at a cost of 10 percent." (The Detroit News)
[Opinion] How Retirement Benefits Might Sink the States
"Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state's future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, 'You won't recruit a business, you won't recruit a family to live here.' We're likely to hear more such worries in coming years." (The Wall Street Journal)
Illinois Legislators Take Aim at Subsidy for Public Employee Retiree Health Insurance
"State employees earn a subsidy toward their retiree health insurance premiums based on the number of years they worked for the state. Employees get a 5 percent reduction in premiums for each year of service. As a result, employees who work 20 or more years pay nothing for their own health insurance in retirement." (Galesbury.com)
Senate Passes U.S. Postal Service Overhaul
"The legislation ... allows the agency to offer buyout and early retirement incentives to 100,000 employees, switches to five-day delivery if officials cannot come up with other cost savings within two years, and restructures a requirement that the Postal Service prefund its retirement health benefits with more than $5 billion annually.... New amendments passed into the bill this week scale back workers� compensation benefits, curtail USPS executive compensation to a level on par with Cabinet secretaries and address the backlog of USPS retirement claims at the Office of Personnel Management." (Government Executive)
Michigan Legislature Eyes Pension Changes to Narrow $45 Billion Gap in Teacher Retirement Fund
"Of the $45 billion in unfunded liability, the state estimates about $17 billion comes from the pension side of the benefit package. Such pensions are constitutionally protected. The rest comes from health care, which is not funded actuarially, i.e., pre-funded according to statistics and estimates of demand, but on a pay-as-you-go basis, a decision made in the 1990s during the administration of Gov. John Engler." (Bridge Magazine)
Capping Benefits and Rising Costs of Employer-Sponsored Retiree Health Coverage
"Companies often say spiraling health-care costs force them share the pain with retirees. But that isn't the whole story. Many employers have been shifting more costs to retirees even as they receive billions of dollars in government subsidies to offset their own costs. Knowing what's really driving up the amounts you pay can help you anticipate what's ahead." (The Wall Street Journal)
San Diego to Save More than Expected on Retiree Health
"Agreements were reached last year with the city's unions on the new retiree health care package, which offered three options for workers. City officials expected about 3,000 of the eligible employees -- those hired before 2005 -- to opt for the plan that is similar to a 401(k) and is cheaper for the city in the long run. Instead, about 5,000 did[.]" (KUSI News)
[Guidance Overview] Health Plan Sponsors Assessing Effect of 2013 Medicare Part D Indexed Amounts
"[This publication provides] charts comparing the 2013 [Medicare Part D standard defined benefit and Retiree Drug Subsidy (RDS) amounts] to the 2012 numbers. It also reviews changes to the Part D benefit, which were made by the Affordable Care Act, and illustrates the impact of those changes on the 2013 benefit.... Plan sponsors should note the new benefit amounts for planning purposes for 2013 � both with respect to expected RDS income and to the design of any Medicare Part D prescription drug plan that is offered to retirees." (Segal)
[Guidance Overview] Final Medicare Part D Regulations Include Coverage Gap Discount Program
"The regulations include changes reflecting HHS' experience to date in administering Part D and will be of interest to sponsors of Part D prescription drug plans. In addition, some group health plans must coordinate with Part D prescription drug plans, among other reasons, to determine which coverage pays first and to disclose to Part D individuals whether the group health plan coverage is creditable." (Practical Law Company)
Pennsylvana Company to End Retiree Health Care for 900
"Consol Energy Inc. plans to end company-sponsored medical benefits for 900 retirees and instead will provide fixed annual payments and force retirees to shop for coverage beginning on Jan. 1, 2014." (TRIB-LIVE)
[Guidance Overview] As Retiree Drug Subsidy Program Becomes Less Attractive, Employers Consider Using 'Group Waiver Program'
"Employers who currently receive a federal tax subsidy for providing retiree prescription drug coverage under the retiree drug subsidy program, or RDS, will no longer be able to take a deduction for that subsidy as of 2013 ... Therefore, many employers are considering an alternative subsidy program referred to as the Employer Group Waiver Program, or EGWP, as an attractive way to achieve significant plan savings and are weighing the benefits of the EGWP against the RDS." (Groom Law Group)
Four Employee Benefit Plan Tips for HR and Finance Departments
"The Society of Actuaries exposure draft of a new mortality improvement scale, if adopted, is expected to result in increases in traditional pension plan liabilities of 2% to 4% and in retiree health care liabilities of 6% to 9%.... [I]f you have never had your [401(k)] safe harbor notice reviewed by counsel, now is a great time to make sure it is compliant.... The IRS has given employers an opportunity to correct deficiencies [under section 409A] in release language [in employment contracts and severance agreements] without any penalties or reporting requirements, but to be entitled to relief, agreements must be amended no later than December 31, 2012.... Some of the nation�s largest consulting firms (Aon Hewitt and Mercer), as well as other companies in the insurance business, are rolling out private health insurance exchanges for employers." (Poyner Spruill LLP)
Governor Quinn, Mayor Emanuel: It's Time to Look at Little Rhody
"[Chicago mayor Rahm Emanuel] described the dishonesty of a pension system fomented by pols who committed taxpayers to dole out more than they can afford to pensioners. If Chicago does nothing, he said, property taxes will have to rise by 150 percent -- a prospect he rejected as unthinkable: 'You won't recruit a business, you won't recruit a family to live here.' ... Emanuel raised, and [llinois governor Pat Quinn] discussed, the best idea of the night: that Illinois consider pension changes that the similarly Democratic state of Rhode Island adopted in November." (Chicago Tribune)
[Opinion] Surprise, Illinois! You Owe Another $54 Billion
"Beyond that $83 billion in unfunded pensions, [Illinois] state government alone faces an unfunded liability of more than $54 billion in retiree health liabilities over the next 30 years.... [O]nly 8 percent of private-sector retirees are offered health insurance benefits, and those retirees pay an average of 54 percent of the cost. Similarly requiring Illinois retirees to pay an average of 54 percent of insurance costs ... would shrink the anticipated $54 billion shortfall by $21 billion." (Chicago Tribune)
Medicare Coverage Less Generous Than Coverage in Large Employer Plans, When Available
"Medicare requires multiple deductibles and coinsurance based on service type, whereas a typical large employer plan requires a single deductible for all medical services ... In 2011, for an inpatient hospital stay Medicare required a $1,132 deductible and no coinsurance for the first 60 days whereas the typical large employer plan required 20 percent coinsurance beginning from the first day." (Wolters Kluwer Law & Business / Health Reform Talk Blog)
For Now, Kodak Backs Off on Retiree Health Benefit Cuts
"Eastman Kodak Co. retirees facing possible cuts to their company-provided health care coverage have some additional breathing room. The company, in a filing Wednesday, sought U.S. Bankruptcy Court approval for creation of a retirees committee to represent their interests through Kodak's Chapter 11 process. Kodak also said it was yanking a previous motion seeking to end the Medicare Advantage plan it provides to post-1991 retirees who are eligible for the government health insurance program." (Democrat and Chronicle)
Contrary to Predictions, Boomers Are Retiring in Droves (PDF)
"The study reports that 59% of the first Boomers to turn 65 are at least partially retired -- 45% are completely retired and 14% are retired, but working part-time. Of those still working, 37% say they'll retire in the next year and on average plan to do so by the time they're 68. Half (51%) of those who are retired say they retired earlier than they had expected. Of those who retired early, four-in-ten say they did so for health reasons." (MetLife Mature Market Institute)
Supplemental Group Health Insurance Benefit Strategies for Retirees
"As employers consider alternatives to offering retirees traditional group Medicare insurance, they may evaluate more than one supplemental insurance solution. Employers often compare an Employer Group Waiver Plan (EGWP) solution with a private Medicare exchange ... Both solutions offer some clear benefits[.]" (Extend Health)
[Guidance Overview] Municipalities Betting on Pension Bonds to Save the Day?
"The argument for the bonds is almost always that they will fill a short-term budget hole and allow the city to maintain benefits for retirees. But market experts say the risks and long-term costs are frequently ignored. Along with the interest rate payments and investment risks with which the bonds freight governments, they also provide another argument for opponents of public pensions, increasing the possibility that such benefits could be lost altogether." (Pension Pulse)
Mortality Study Points to Increasing Pension and Retiree Health Care Costs
"Traditional pension plan liabilities could rise by 2 to 4% and retiree health care liabilities 6 to 9% under a new mortality improvement scale published for comment by the Society of Actuaries (SOA). The new scale reflects the last two decades' better-than-expected mortality improvement after age 55." (Mercer)
[Guidance Overview] Early Retirement Supplements Treated As a Protected Benefit Due to Careless Drafting
"In the Savani [unpublished Fourth Circuit] case, the accrued benefit was defined by cross references to the relevant sections of the plan as the normal retirement formula reduced by a prior plan offset, plus any 'applicable supplements.' Including the supplements in the definition of accrued benefit' proved fatal to the ability of the employer to subsequently eliminate the supplements." (Employee Benefits Counsel)
The Early Retiree Reinsurance Program ? Go Forth and Spend
"CMS ... noted in February that reimbursement requests that exceed that $5 billion limit will be held in the order of receipt pending the availability of funds. Plan sponsors with reimbursement requests on hold already should have received email messages notifying them that their reimbursement requests have been placed on hold pending the availability of funds. CMS will pay reimbursement requests in the order received until available funds are exhausted." (Porter Wright Morris & Arthur LLP)
Judge Puts Hold on Kodak Cuts to Retiree Health Benefits
"Kodak in February filed a motion seeking court approval to eliminate the Medicare enhancement it provides for employees 65 and older who retired after 1991. According to Kodak, currently going through a Chapter 11 bankruptcy reorganization, such a move would save the company about $20 million a year starting in 2013." (DemocratandChronicle.com)
Employers' Accounting for Pensions and Other Retirement Plans May Be on FASB's 2012 Agenda
"Employers' accounting for pension, retiree medical and other post-retirement benefits -- specifically, the expected rate of return on plan assets and combining of various expense elements -- tops a list of new concerns stakeholders want FASB to address, according to Chairman Leslie Seidman's March 12 webcast on 2012 priorities." (Mercer)
[Official Guidance] CMS Notice on the Early Retiree Reinsurance Program
"This notice establishes a timeframe by which plan sponsors participating in the Early Retiree Reinsurance Program (ERRP) are expected to use ERRP reimbursement funds. Sponsors are expected to use such funds as soon as possible, but not later than December 31, 2014." (Centers for Medicare & Medicaid Services)
For States, Tax Revenues Are Up, but Deferred Costs Are Waiting to Be Paid
"A huge fiscal headache for state and local government leaders is the pension and retiree medical (OPEB) debt that has accumulated in the past decade and is now coming due in many states. Over $700 billion of pension underfunding and twice that much in OPEB liabilities are hanging out there waiting to be addressed. That's a $2 trillion liability that will hit their books as the accounting standards put these debts on the balance sheet for the first time. Although the pension funds have delayed sending the bills for their deficits by using actuarial smoothing practices that defer the increase in employer's required contributions, those chickens are now coming home to roost." (Governing)
Understanding Finances and Changes in State and Local Government Retiree Health Care (PDF)
"Governments need to understand what has been done so far to address OPEB liabilities, and assess whether these efforts are enough to put the provision of retiree health care on a more sustainable path." (Center for State and Local Government Excellence)
[Opinion] U.S. Chamber of Commerce and American Benefits Council Amicus Brief in Sterling Chemicals, Inc., v. Evans, in Support of Petitioners (PDF)
"The misguided decision below, which allows employee benefit plans to have been amended unknowingly and unintentionally by corporate purchase agreements that were neither identified nor intended as plan amendments, profoundly and adversely affects amici's members by throwing the terms of their plans into doubt, introducing the prospect of enormous unanticipatedliabilities, and opening the door to unnecessary, time consuming and expensive litigation over the operation of their plans for many prior years. We believe this Court's review is urgently needed." (American Benefits Council)
States Facing 96% Unfunded Retiree Benefits
"States haven't financed almost 96 percent of the $627.4 billion they were projected to owe for future retiree benefits in 2010, according to Bloomberg Rankings data. The estimated deficit grew from about 95 percent in 2009 as governors coped with lower general-fund revenue and rising demand for services following the longest recession since the Great Depression." (Bloomberg)
[Guidance Overview] Elimination of Benefits Following Spin-Off Did Not Violate ERISA Absent Intent to Interfere with Benefits
"A company's decision to spin-off a division and implement a no-hire policy, that effectively ended the right of transferred employees to pension and retiree medical benefits, did not violate ERISA section 510 because it was not specifically intended to interfere with the employees' benefit rights, the [court] has ruled." (Wolters Kluwer Law & Business / CCH)
How Long Does a Retiree Health Benefits Transition Take: Implementation Milestones
"If you are planning to move your retirees to coincide with the change to the RDS taxable status, this article will help you understand what you need to do to make the transition before the change takes place on January 1, 2013." (The Extend Health Blog)
Deficits Push N.Y. Cities and Counties to Desperation
"Even as there are glimmers of a national economic recovery, cities and counties increasingly find themselves in the middle of a financial crisis. The problems are spreading as municipalities face a toxic mix of stresses that has been brewing for years, including soaring pension, Medicaid and retiree health care costs." (The New York Times; free registration required)
[Guidance Overview] Court Bars Act 111 Arbitrators for Pennsylvania Municipalities from Reducing Post-Retirement Benefits
"The court found that the reduction of post-retirement health coverage for current employees violated Section 2692(c)(3) of the Home Rule Charter Law, which provides that a municipality shall not '[b]e authorized to diminish the rights or privileges of any former municipal employee entitled to benefits or any present municipal employee in his pension or retirement system.'" (Ballard Sphar LLP)
Providence, Ri, Mayor Asks City Retirees to Accept Reduced Pensions and Less Generous Health Care Coverage
"During a sometimes tense meeting at Rhodes on the Pawtuxet in Cranston, the mayor asked Providence's 4,300 retirees to accept three changes: the suspension of future pension cost-of-living adjustments (COLAs) until the system gets from its 32% funded level to 70%; a 20% health insurance co-share for retirees under the age of 65; and a transition to Medicare with a supplemental plan for those 65 and older." (WPRI.com)
Taking Advantage of Off-Cycle Retiree Transitions
"If you are considering a move to a Medicare Exchange for your retirees, now is the time to start thinking about an off-cycle transition. Because the Retiree Drug Subsidy loses its tax-deductible status starting in 2013, many corporate employers are timing a new retiree strategy to coincide with this pivotal legislative change." (The Extend Health Blog)
Deadline Set for Use of Early Retiree Reinsurance Program Funds
"Employers and other early retiree health care plan sponsors have until the end of 2014 to use federal government claims reimbursement funds authorized by the health care reform law, [according to] the Centers for Medicare and Medicaid Services." (Business Insurance)
California's Looming Bill for Public Employee Retiree Health Care: $62.1 Billion
"That ... is the 30-year cost of providing health and dental benefits for state workers and retirees." (The Orange County Register)
Kodak Wants to Cut Retiree Health Benefits
"The Eastman Kodak Co. is filing a motion in bankruptcy court to end health coverage for some retirees. A hearing on the motion will be held next month in New York City. The company is seeking to cut health care coverage for most Medicare-eligible retirees." (WIVB.com)
[Guidance Overview] All Early Retiree Reinsurance Funds Paid Out or Pending, but Two Key Program Dates Still Ahead
"By March 30, participating plan sponsors must have an updated early retiree list, a detailed medical claim list and a payment request approved by the automated ERRP system. Otherwise, payments made based on summary data or manually reviewed claim lists are subject to recovery. The ERRP also can recover any funds that sponsors fail to use for program purposes by Dec. 31, 2014." (Mercer)
Chart: OPEB Prefunding Analysis of California Retiree Health Benefits (PDF)
This is an analysis of the 2011 Valuation. (Gabriel, Roeder, Smith & Company)
State of California Retiree Health Benefits Program: GASB Nos. 43 and 45 Actuarial Valuation Report as of June 30, 2011 (PDF)
"The valuation was based on census information as of June 30, 2011, and measures actuarial liabilities as of June 30, 2011. The report includes expense and financial reporting information applicable to fiscal year end June 30, 2012, and a projection of annual expense for fiscal year end June 30, 2013." (Gabriel, Roeder, Smith & Company)
West Virginia Reins in Public Retiree Health Benefit Costs
"West Virginia is already reaping benefits from recent efforts to rein in public retiree health benefit costs, officials say: They expect to shrink the projected funding shortfall further, by more than $1 billion, and a Wall Street credit rating agency appears ready to praise the state's handling of its last major liability." (The Herald-Dispatch)
A New Set of Best Practices for 'Other Post-Employment Benefits'
"Fortunately, the Government Finance Officers Association (GFOA) has stepped up to the plate with a new guidance document providing best practices to public employers seeking to establish an OPEB trust. This primer covers the basic questions that most public officials and managers will face, outlines the basic legal options and pitfalls, explains in simple terms the paths available and the pros and cons of each, and directs readers to literature in the field to help support sound decisionmaking. Any finance officer can start with this roadmap and easily chart a course to implement a trust within six months." (Governing)
[Opinion] ERIC Urges Congress to Extend and Expand Retiree Health Benefits Paid for with Overfunded Pensions
"ERIC on February 21 urged House Ways and Means Committee Chairman Dave Camp and Ranking Member Sander Levin to continue allowing companies to make transfers from overfunded pension plans to pay for retiree health care and to expand current law to include retiree life insurance." (ERISA Industry Committee)
ERRP Reimbursement Requests Exceed $5 Billion Funding Limit
"The Early Retiree Reinsurance Program (ERRP) announced on February 17, 2012, that it has received requests for reimbursement that exceed the $5 billion in funding appropriated for the program under health care reform. These requests will be held in the order in which they were received, pending funds that may become available if ERRP recoups overpayments (for example, from adjustments to initial claim amounts)." (Practical Law Company)
Do Public School Teachers Really Receive Lavish Benefits?
"[A] recent paper by Jason Richwine of the Heritage Foundation and Andrew Biggs of the American Enterprise Institute claims that public school teachers enjoy lavish benefits that are more valuable than their base pay and twice as generous as those of private-sector workers . . . . According to Richwine and Biggs, this makes teachers' total compensation 52 percent higher than fair-market levels and amounts to $120 billion 'overcharged' to taxpayers each year." (Economic Policy Institute)
Obama Compromises Amid Catholic Contraception Coverage Anger
"Under the new plan put forward by the White House health insurance companies, rather than the employer, will be required to offer contraception directly to employees of religious-linked institutions if requested. The institutions -- such as universities or hospitals -- would not be required to subsidize the cost of offering birth control to their employees, nor would they be asked to refer them to organizations that provide it." (BBC News)
Employer Retiree Groups Will Move To Medicare Advantage, but How Soon Is the Question
"Employer groups stand to become a much bigger contributor to Medicare Advantage growth than they are now, but any big move probably won't occur until 2013 and beyond." (AISHealth)
West Virginia Senate Passes Bill to Pay Down Major Liability for Future Health Insurance Costs for Retired State and Public School Employees
"Under the bill, which is also expected to quickly win passage in the House of Delegates, the state will direct $30 million a year of personal income tax collections to pay down the liability, currently projected to be $5.3 billion." (The Charleston Gazette)
For 11 States and Puerto Rico, Cost of Employee Benefits Is One of Three Top Fiscal Issues for 2012 (PDF)
"Dealing with unfunded liabilities, increasing employee contributions and making significant reforms lie in the year ahead for state lawmakers." (National Conference of State Legislatures)
Providence Is Now on 'the Brink of Bankruptcy,' Mayor Taveras Warns
"Taveras said the city's retirees must accept reduced pension and health care benefits to save the city from financial ruin. A decree signed in 1991 by Mayor Buddy Cianci pushed the city's pension liability 'into the stratosphere' by giving annual cost-of-living increases of 5% and 6% to more than 600 retirees, he said." (WPRI.com)
Providence, R.I., Mayor Proposes Benefit Cuts to Avert Bankruptcy
"Mayor Angel Taveras, a Democrat, outlined plans to reduce pensions for retired municipal workers and vowed to appeal a recent state court ruling preventing the city from forcing its retirees to switch to the federal Medicare health insurance program when they turned 65." (New York Times; free registration required)
Saving Company Retiree Health Plans
"Bankruptcy judges usually let companies terminate such plans, figuring the move will make it more likely that creditors will be paid and that the company's chances of turning itself around will be enhanced if it can shed millions or even billions of dollars in retiree obligations at the stroke of a pen. Retirees, who are unsecured creditors, always are vulnerable." (The Wall Street Journal)
Establishing and Administering an OPEB Trust
"The Government Finance Officers Association (GFOA) recommends creating a qualified trust fund to prefund OPEB obligations. To ensure that the trust is established and administered properly, governments should consult qualified legal counsel and fully understand the following issues . . . ." (Government Finance Officer's Association)
PBGC Responds to American Airlines' Letter on Employee Pensions
"The American letter also downplayed the pension cuts that would occur if American's plans are terminated and PBGC benefits are substituted. Although the figure appears nowhere in the management letter, the airline itself estimates that some 13,000 current or retired employees will have their pensions cut." (Pension Benefit Guaranty Corporation)
2012 Hot Topics in Retirement: Survey Highlights (PDF)
"This year's survey results show that employers are continuing to assess the most efective way to deliver retirement benefits to their employees and keep up with the evolving retirement landscape." (Aon Hewitt)
[Guidance Overview] ERRP Reminder: March 30 Deadline for Submission of Full-Replacement Claim List
"Last month the CMS announced that the ERRP would be closed for claims incurred after December 31, 2011, due to the projected exhaustion of funds." (Deloitte via BenefitsLink.com)
New York State Retiree Health Liability Rises to $72 Billion; NYC's Is $84 Billion
"Most states cover retiree health benefits on a pay-as-you go basis. They don't set aside money annually to pre-fund the obligations, as they do with pensions. Last year, New York, the third-biggest U.S. state by population, spent $3.3 billion on health care for active and retired employees as health-care spending rose 6 percent." (Bloomberg)
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