FAS 106 Liability

[Guest Arthur]

Our company negotiated a cap on contributions for retiree medical insurance, for accrual liability purposes, what figure is used? the cap figure? (the part the company would pay?) or the cost of the policy itself?

[Effen]

First, I'm not sure this is the correct board for this question, but it will probably get a better response here.

Our company negotiated a cap on contributions for retiree medical insurance

- negotiated with the union or the insurance company?

I guess I am a little confused. Is the cap on the amount of the cost that the employer will subsidize or did your carrier agree to only raise the annual premiums by a certain percentage?

Is the plan self funded or insured? How do you determine the "rate" that is applied to the retirees?

[Guest Arthur]

First, I'm not sure this is the correct board for this question, but it will probably get a better response here.

Our company negotiated a cap on contributions for retiree medical insurance

- negotiated with the union or the insurance company?

I guess I am a little confused. Is the cap on the amount of the cost that the employer will subsidize or did your carrier agree to only raise the annual premiums by a certain percentage?

Is the plan self funded or insured? How do you determine the "rate" that is applied to the retirees?

The Cap is the amount the employer will subsidize on an insured policy negotiated with the Union. The rate is figured on an experience-rated policy, which means that it is higher than an active employee rate.

[Don Levit]

I am going to take a guess, based on my general knowledge.

The figure used on a yearly basis is the amount the company actually paid, until the cap is reached.

At that point, the amount yearly is the cap.

Don Levit