One of the highest impact assumptions in OPEB actuarial valuations is the participation rate. This rate represents the percent of future retirees assumed to participate in the employer’s health plan during retirement. The participation assumption has a direct and leveraged effect on OPEB liabilities. For example, if the assumption is that 60% of employees are assumed to elect coverage […]Read More… from OPEB Participation Rates – “Kind of a Grey Area” Under Healthcare Reform
Although the effect of healthcare reform on retiree health plans is difficult to gauge at this point, there are several provisions that could impact the long-term costs and strategies for employer plans. Let’s start with the so-called “Cadillac Tax” on high-cost insurance plans effective in 2018. What it is: A non-deductible 40% excise tax paid by the […]Read More… from How will the “Cadillac Tax” impact your OPEB plan?
Employers who offer retiree health benefits to their employees have something new to think about: How will proposed Medicare reforms impact my plan and its costs? Although changes to the Medicare system are likely a long way off, Medicare reform is a hot topic lately and changes to the program could have a dramatic effect […]Read More… from Start Thinking About the Impact of Medicare Reform on OPEB Plans
We all knew this day would come, and now it’s here. New applications for the Early Retiree Reinsurance Program (ERRP) will be received only until 5 pm on Thursday, May 5th. The last time we blogged about this, the ERRP money was going fast. Now the urgency is clear. So if you’ve been thinking about […]Read More… from It’s now or never for ERRP application
In our last ERRP post, we noted that $1 billion of the original $5 billion in Early Retiree Reinsurance Program (ERRP) funds has been paid out. Now, according to an article this week in Business Insurance, the US Dept of Health and Human Services (HHS) estimates that $3.6 billion will have been paid out in […]Read More… from ERRP update: it’s time to make your move
As public plan sponsors complete their second (or third) actuarial valuation of GASB 45 liabilities, they may be surprised at the potential volatility of their Actuarial Accrued Liability (AAL). There are various factors that can cause large AAL changes, including adjustments to the plan provisions or switching health insurers. This post focuses on a less […]Read More… from Understanding the Leveraging Effect of GASB 45 OPEB Liabilities
billion of the original $5 billion has now been paid out under the Early Retiree Reinsurance Program (ERRP), according to an article this month in Business Insurance. We’ve been watching the ERRP since its inception (posts 1, 2, 3, 4), and didn’t think the $5 billion allocation would last long. A July 2010 EBRI article […]Read More… from ERRP funds are going fast, but employers still have time to act
Many municipalities, school districts, and other governmental entities have established OPEB trusts as a way of starting to prefund their postretirement benefit promises to employees. In addition to the perceived fiscal responsibility of prefunding OPEB benefits, setting aside assets can also help the plan sponsor’s GASB 45 accounting. This post deals with certain situations where the […]Read More… from OPEB Trust Investment Return
In the retiree benefits world, there is a general consensus that several provisions in the Patient Protection and Access to Care Act (PPACA) may cause employer sponsors of retiree health plans to rethink those programs. These changes include: – Filling of the Part D “doughnut hole” (2010-2020) – Guarantee issue insurance with no pre-existing condition […]Read More… from PPACA Starting to Impact Retiree Health Plans
A quick update on the Early Retiree Reinsurance Program (ERRP): Over the past few months, the Department of Health and Human Services (HHS) has been busy gearing up for the implementation of the ERRP. As you may recall from our earlier posts (1, 2, 3), this is a program that’s part of the larger healthcare […]Read More… from ERRP Reimbursement and Website Update
