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All News > Retiree Health Plans

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Upcoming Deadline for Michigan Public Schools to Participate in Proposed IRS Closing Agreement on 3% Retiree Healthcare Contributions
Miller Johnson Link to more items from this source
[Guidance Overview]
Jan. 21, 2021

"February 5, 2021 is the deadline for Michigan public school districts to submit a Form 2848 to the State of Michigan Office of Retirement Services to participate in and be covered by the proposed IRS closing agreement related to 3% retiree healthcare contributions. Michigan public school employees who did not opt out of retiree health coverage under the Michigan Public School Employees Retirement System Act are required to make 3% contributions to ORS for retiree health coverage.... For a limited time, the IRS is allowing Michigan public school districts to participate in a closing agreement that favorably resolves the tax treatment of these contributions. The IRS indicated that the closing agreement will provide that the retiree healthcare contributions are exempt from federal income and FICA taxes."

Tags: Local Regulation  •  Retiree Health Plans  •  State and Local Government Plans

SAG-AFTRA Health Plan Facing Class Action Over Cuts to Coverage
The Hollywood Reporter Link to more items from this source
Dec. 2, 2020

"The SAG-AFTRA health plan is at the center of a putative class action brought by a group of actors who say premiums have skyrocketed and medical coverage is being stripped from elderly guild members under the guise of a COVID-19-related restructuring ... The actors -- led by the iconic Ed Asner -- are suing the SAG-AFTRA Health Fund and its board of trustees for allegedly breaching their fiduciary duties." [Asner v. The SAG-AFTRA Health Fund, No. 20-10914 (C.D. Cal. complaint filed Dec. 1, 2020)]

Tags: Coronavirus (COVID-19)  •  Health Plan Costs  •  Retiree Health Plans

How Long Does Your CBA Obligate You to Pay for Retiree Health Insurance Coverage?
Bond, Schoeneck & King Link to more items from this source
Nov. 13, 2020

"If you are a municipal employer in New York State struggling to find the answer to that question, you are not alone. In the absence of express language in your collective bargaining agreement, a definitive response is elusive. So elusive that the Second Circuit Court of Appeals has reached out to New York's Court of Appeals for guidance. Whatever answer the Court of Appeals returns, if any, the value of a carefully negotiated and precisely drafted collective bargaining agreement cannot be overstated." [Donohue v. Cuomo, No. 18-3193 (2d Cir. Nov. 6, 2020)]

Tags: Retiree Health Plans

Tighter Municipal Budgets Shrink Retiree Health Benefits
The Wall Street Journal; subscription may be required Link to more items from this source
Nov. 9, 2020

"For all 50 states combined, revenue declines for 2020 and 2021 could reach 13% cumulatively, according to Moody's Analytics projections, while the average cost of an employer health-care plan for an individual increased 4% in 2020 to $7,470, according to the Kaiser Family Foundation nonprofit."

Tags: Retiree Health Plans  •  State and Local Government Plans

District Court Permits Retirees’ Breach of Fiduciary Duty Claim Based on Misrepresentation of Lifetime Health Benefits
Kantor & Kantor Link to more items from this source
Oct. 28, 2020

"Plaintiffs brought a claim for breach of fiduciary duty ... based on Defendants' misrepresentations that Plaintiffs' retiree benefits would vest for life once they reached the equated service date, as Plaintiffs alleged that Defendants fraudulently induced Plaintiffs into continuing their employment to their detriment as a result. The court ... denied Defendants' motion to dismiss this cause of action." [Fitzwater v. Consol Energy, Inc., No. 17-3861 (S.D.W. Va. Oct. 22, 2020)]

Tags: Retiree Health Plans

Retired Hollywood Actors Protest Changes to SAG-AFTRA Health Plan
Portside Link to more items from this source
Aug. 27, 2020

"As a result of pandemic-fueled financial troubles, SAG-AFTRA on August 12 announced significant raises to premiums and minimum earnings requirements that it says are necessary to keep the entire plan afloat.... Members under 65 will ... have to earn $25,950 or work at least 100 days during a 12-month base earnings period to qualify for coverage. But the biggest change for seniors is that they will no longer be able to count residuals -- which many Hollywood retirees rely on as a fixed income -- towards that minimum earnings count."

Tags: Health Plan Costs  •  Health Plan Design  •  Retiree Health Plans

Fifth Circuit: Coal Act Retiree Benefits Can Be Modified Under Bankruptcy Code
Thomson Reuters Practical Law Link to more items from this source
Aug. 7, 2020

"[S]uccessor liability for a company's Coal Act retiree health obligations can become a major issue when the company later attempts to sell its assets. A framework in which these obligations are subject to modification therefore may be beneficial to both a company and its potential buyers. As the Fifth Circuit emphasizes, its holding in this decision is consistent with other circuits that have ruled on the issue and concluded that Coal Act obligations are subject to modification." [In re Westmoreland Coal Co., No. 19-20066 (5th Cir. Aug. 4, 2020)]

Tags: Bankruptcy  •  Retiree Health Plans

Briggs & Stratton Scraps Retiree Medical Benefits in Bankruptcy
The Wall Street Journal; subscription may be required Link to more items from this source
July 22, 2020

"[T]he day before the [company] filed for chapter 11 bankruptcy protection, Briggs & Stratton's board voted to terminate health benefits for 450 former workers and end life-insurance protection for 4,000 former workers, effective as of the end of August.... The company is seeking a court order saying it was justified in terminating the benefits, despite bankruptcy-code provisions that limit the rights of troubled companies to strip retirees of benefits."

Tags: Bankruptcy  •  Retiree Health Plans

Third Circuit Rejects Retirees' Claim for Lifetime Medical Benefits
Proskauer Link to more items from this source
June 30, 2020

"Applying ordinary principles of contract interpretation, the Court concluded that the CBA did not 'clearly and expressly' vest the retirees with lifetime benefits. In so ruling, the Court rejected the retirees' argument that because the Plan required union consent before altering medical benefits and also did not include a general durational clause, it could be inferred that 'the parties clearly expressed their intent to vest post-retirement medical benefits.' " [Blankenship v. Dominion Energy Transmission, Inc., No. 19-3374 (3d Cir. Jun. 19, 2020)]

Tags: Retiree Health Plans

Retiree Health Cost Estimates for 2020
Milliman's Healthcare Town Hall Link to more items from this source
May 29, 2020

"A healthy 65-year-old couple retiring in 2020 is projected to spend approximately $351,000 in today's dollars ($535,000 in future dollars) on healthcare over their lifetime. Expenses at age 85 are estimated to be 234% higher than that at age 65.... A healthy 45-year-old couple is projected to spend approximately $505,000 in today's dollars ($1.4 million in future dollars) on healthcare over their lifetime."

Tags: Health Plan Costs  •  Medicare  •  Retiree Health Plans

Editor's Pick The Cost of Health Care During Retirement: Expectations and Concerns of Older Workers
TIAA Institute Link to more items from this source
May 20, 2020

"Across wealth levels, many workers are concerned about their ability to pay for health expenses in retirement. Yet most individuals have not saved specifically for such costs, nor have they reviewed their employer-provided retiree health care benefits. Those who are unfamiliar with their benefits exhibit higher levels of concern about retiree health care costs. Most people expect to rely primarily on Social Security and/or their retirement plan assets to fund health care costs in retirement."

Tags: Retiree Health Plans

Taking Public Sector Retiree Medical to the Next Level
Findley Link to more items from this source
Mar. 27, 2020

"Faced with the sobering reality of more than $1 trillion in unfunded retiree healthcare liabilities, public sector employers across the country are seeking a sustainable retiree health benefit solution.... One solution that is just starting to be used is to work with state legislatures and make benefit changes that allow public sector employees to convert unused sick leave into retiree health insurance credits."

Tags: Retiree Health Plans  •  State and Local Government Plans

Editor's Pick Use of Individual Medicare Marketplaces for Public Sector Retiree Health Care: A Guide for Elected Officials (PDF)
Center for State & Local Government Excellence Link to more items from this source
Mar. 10, 2020

13 pages. "Rising retiree health care costs and changes in accounting standards are making unfunded liabilities more prominent, and states and localities are taking a variety of actions to mitigate these costs.... the purpose of this report is to provide elected and appointed officials with a basic understanding of an individual Medicare marketplace. Also known as an individual Medicare exchange, this is a model that some state and local governments are adopting with noticeable savings."

Tags: Medicare  •  Retiree Health Plans  •  State and Local Government Plans

COVID-19 and its Implications for Pension and OPEB Accounting
Bolton Link to more items from this source
Mar. 10, 2020

"If rates do not rebound before the end of the fiscal year, the rate decrease could increase governments' OPEB liabilities substantially when they prepare their June 30, 2020 financial statements. The increase could be by as much as 30% or more for less mature governments who provide Medicare supplemental benefits. The increases will be smaller for fixed dollar benefit plans or for plans with no benefit after Medicare eligibility."

Tags: Accounting  •  Coronavirus (COVID-19)  •  Retiree Health Plans

For Municipal Employers: Making Sense of Your Retiree Health 'Savings' Plan
Best Best & Krieger LLP Link to more items from this source
Feb. 20, 2020

"Several municipal clients adopted retiree health savings plans or post-employment health plans... [which] are not always fully explained when they are proposed ... as powerful tax-saving programs.... [T]hese arrangements are all variations of the retiree health reimbursement arrangement, known as RHRA ... [and] may only be funded with employer-paid contributions. They may not be funded with employee contributions ... These arrangements are not any form of HSAs."

Tags: HRAs  •  HSAs  •  Retiree Health Plans

Public-Sector Employers Have Incentive to Keep Retiree Benefits Viable
PLANSPONSOR; free registration may be required Link to more items from this source
Feb. 20, 2020

"Roughly half of public-sector employees surveyed (46%) are worried that the health care benefits they were promised in retirement will evaporate when they need them most ... 78% of Millennials working in state and local government said their health care benefits is one reason they chose a position in the public sector. And if those benefits were cut, 77% say they would be more likely to leave their jobs."

Tags: Health Plan Design  •  Retiree Health Plans

Editor's Pick State of North Carolina Finds a Relatively Painless Way to Curb Retiree Health Care Costs
MarketWatch Link to more items from this source
Feb. 7, 2020

"Rather than wait for a crisis, North Carolina took steps to phase out its retiree medical costs in an orderly and predictable fashion. First, in 2006, it raised the required years of service to qualify for retiree health care from five to 20 years. Second, in 2017, the state eliminated health insurance benefits for retirees hired after Jan. 1, 2021. The result will be a steady decline in the number of workers qualifying for OPEB over the next two decades until it reaches zero in 2041."

Tags: Health Plan Costs  •  Retiree Health Plans  •  State and Local Government Plans

Major Health Care Cuts Looming for Ohio Public Employee Retirees
The Toledo Blade Link to more items from this source
Jan. 15, 2020

"The system had planned to earmark 4 percent of the employer contributions to health care, but that never materialized as the fund lowered its investment earnings projections. With no new dollars going into what is now a $13 billion health-care fund, it is believed that it will become insolvent in about 10 years. It could be about 14 years before OPERS might be able to resume contributions into the health-care fund."

Tags: Retiree Health Plans  •  State and Local Government Plans

Retiree Medical Benefits Vested for Life and Survived CBA Termination
The Wagner Law Group Link to more items from this source
Jan. 10, 2020

"The employer asserted that the CBA contained a Term Provision which gave it the right to terminate the agreement along with the retiree health care benefits provided thereunder. The Seventh Circuit disagreed, finding that the CBA's Coverage Provision, which established the promised retiree health care coverage, 'would run independently' from the Term Provision and that the 'duration of the [retiree health care] coverage was not limited to the term of the Agreement.' The court explained that the CBA's Term Provision was 'nothing more than a durational limit' that gave the employer the right to terminate the CBA alone, and not the retiree health care benefits." [Stone v. Signode Industrial Group LLC, No. 19-1601 (7th Cir. Nov. 20, 2019)]

Tags: Retiree Health Plans

Seventh Circuit Holds Retiree Medical Coverage Vested for Life
Hodgson Russ LLP Link to more items from this source
Jan. 7, 2020

"Finding the underlying [collective bargaining] agreement unambiguous, the Seventh Circuit panel nonetheless discussed the extrinsic evidence in support of its holding, including the significant testimony of a former benefits manager who participated in negotiating the 2002 agreement, and advised participants that their medical benefits were vested for life if they retired under that agreement." [Stone v. Signode Industrial Group LLC, No. 19-1601 (7th Cir. Nov. 20, 2019)]

Tags: Retiree Health Plans

Seventh Circuit Holds Employer to Promise of Lifetime Healthcare Benefits for Retirees
Kantor & Kantor Link to more items from this source
Nov. 27, 2019

"The court noted that while ERISA does not require that welfare benefits be vested, such benefits may be vested if the contract providing the benefits contains vesting language. The court further found that the plan's language 'unambiguously provided retirees with vested lifetime health-care benefits.' ... [T]he court found that even if the plan was ambiguous regarding vesting, extrinsic evidence in the form of industry usage and the behavior of the parties showed that the benefits were intended to be vested." [Stone v. Signode Industrial Group LLC, No. 19-1601 (7th Cir. Nov. 20, 2019)]

Tags: Retiree Health Plans

Health and Pension Benefits for United Mine Workers of America Retirees: Recent Legislation
Congressional Research Service [CRS] Link to more items from this source
Nov. 21, 2019

"Eligible UMWA members receive postretirement health and pension benefits from one of three multiemployer health benefit plans and one multiemployer pension plan. ...  Legislation in the 116th Congress would expand the eligibility for retiree health plans to receive federal transfers and authorize federal transfers to the UWMA pension plan."

Tags: Multiemployer Plans  •  Retiree Health Plans

HUB International's Ambitious Vision for the Retirement Market
planadviser Link to more items from this source
Nov. 14, 2019

"Linking health care and wealth management; maximizing practice efficiency and cross-selling opportunities; addressing individuals' insurance and financial wellness needs -- HUB's new retirement plan specialist advisers hope to do all of this and more."

Tags: HSAs  •  Retiree Health Plans  •  Retirement Plan Design

CMS Announces 2020 Medicare Parts A and B Premiums and Deductibles
Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS] Link to more items from this source
[Official Guidance]
Nov. 11, 2019

"The standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020, an increase of $9.10 from $135.50 in 2019. The annual deductible for all Medicare Part B beneficiaries is $198 in 2020, an increase of $13 from the annual deductible of $185 in 2019.... The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,408 in 2020, an increase of $44 from $1,364 in 2019."

Tags: Health Plan Costs  •  Medicare  •  Retiree Health Plans

Connecticut Telecom Retirees Face Losing Health Benefits
The Wall Street Journal; subscription may be required Link to more items from this source
Nov. 7, 2019

"More than 100 Frontier retirees are expected to lose their health benefits under a new collective bargaining agreement, said Dave Weidlich, president of CWA Local 1298, which covers more than 2,000 Frontier workers.... Frontier isn't required by law to negotiate retiree medical benefits and company representatives declined to do so during recent negotiations, Mr. Weidlich said."

Tags: Retiree Health Plans

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