Last week, the HHS published an interim final rule for the new Early Retiree Reinsurance Program (should we call it ERRP?). In our first post on this, we noted that a lot was still unknown. There still is, but it’s becoming clearer. The White House fact sheet says “Employers can use the savings to either […]Read More… from Update: the retiree health reinsurance gold rush
Category: GASB 45
Off-Year GASB 45 Accounting
A full valuation (measurement) of GASB 45 liabilities is required every 2 to 3 years, depending on the size of the employer. In the years when actual measurements are performed, the GASB 45 results (ARC, Annual OPEB Cost, and Net OPEB Obligation) are fairly straightforward to calculate. However, there is often confusion about what to […]Read More… from Off-Year GASB 45 Accounting
An Alternative to the GASB 45 AMM
Many small cities and governmental entities (less than 100 employees) are still figuring out their GASB 45 liability or whether they even have a liability. GASB’s Alternative Measurement Method (AMM) is a simplified alternative to performing a full actuarial valuation, but even the AMM has a cost that some very small entities would prefer to […]Read More… from An Alternative to the GASB 45 AMM
Pre-funding OPEB liabilities
There’s a great article on funding OPEB liabilities by the MN State Auditor’s office. It’s written for counties, but it applies as well to cities, school districts and other government employers in Minnesota. Whether or not to pre-fund OPEB liabilities isn’t a no-brainer. It’s standard practice for public pensions, and it’s required for private pensions. […]Read More… from Pre-funding OPEB liabilities
GASB 45 – What’s the meaning of ARC?
Under GASB 45 accounting rules, there are many technical terms. One of these is the Annual Required Contribution (ARC). I often get questions from clients regarding the “meaning” of the ARC, so I thought that I’d give a quick and simplified explanation. Background: GASB 45 rules create a method for public employers to accrue OPEB […]Read More… from GASB 45 – What’s the meaning of ARC?
GASB 45 Dental Benefits
GASB 45 covers a variety of OPEB (Other Post Employment Benefits) such as retiree medical, dental, and vision benefits. Although retiree medical insurance gets most of the attention and generally has some of the largest liabilities, dental coverage has the potential to create a significant liability too. Just as with retiree medical benefits, retiree dental […]Read More… from GASB 45 Dental Benefits
State-mandated implicit rate subsidies
Several states (Minnesota, Iowa, Indiana and Florida) have a “mandated” implicit rate subsidy. That means almost every public-sector employer in these states has an OPEB liability. Each of these states has a statute that says public employers: must allow retirees to stay in the health plan until age 65, and can’t charge them any more […]Read More… from State-mandated implicit rate subsidies
GASB 45: the Last Wave
We’re on the last wave of compliance with GASB 45 accounting for other post-employment benefits (OPEB). The biggest calendar-year employers (Phase 1) started in 2007, midsize (Phase 2) in 2008. Now it’s 2009 audit season, when smaller employers (Phase 3) will shift from cash-basis OPEB accounting to GASB 45’s accrual basis: recognizing the cost over […]Read More… from GASB 45: the Last Wave
The retiree health reinsurance gold rush
There’s an intriguing provision in the new health care reform law for retiree medical plans: 80% reinsurance for each early retiree’s claims between $15,000 and $90,000. The official summary is here. There’s a fixed amount of money available for this, just $5 billion. When it’s gone, it’s gone. And remember that $5 billion doesn’t go […]Read More… from The retiree health reinsurance gold rush