Integrating benefits decision making

Integrated employee benefit decision making helps employees use their benefits more wisely and identify opportunities to balance their immediate benefits needs (such as health care) and future benefits needs (such as retirement). This article discusses how employers can overcome employees' behavioral barriers to making integrated employee benefit decisions by changing the ways benefits are communicated and employees are presented with action decisions. Undertaking these steps allows employers to not only improve their employees' overall financial perspectives, but also furthers plan sponsors' goals of actively promoting personal responsibility with respect to retirement funding and changing employee behavior with respect to controlling health care costs.     

The importance of LTC insurance for the retirement security of the baby boomers

Any discussion about the prospects of retirement security for the baby boomers must take into account the potentially devastating costs of future long-term care (LTC) services. Although the market for LTC insurance is growing, baby boomers' misperceptions about LTC persist, and the market for LTC insurance must be expanded. The author presents analysis showing that LTC insurance is affordable for the majority of workers, describes the current state of employer-sponsored LTC insurancebenefits and outlines policies to encourage LTC insurance.     

Facing the new facts of retirement income adequacy

A range of new factors is responsible for the current problem with insufficient retirement resources. Changes inside and outside the organization share partial responsibility, as do employee behaviors. In addition, other factors simply have been overlooked as employers and employees think about retirement income adequacy. The authors describe the current situation, discuss the significant risks it creates for both employers and employees and advise employers on what they should do to help employees build a more secure future in retirement.     

Employer involvement in defined contribution investment education

In this paper the authors consider the personnel problems that may arise for defined contribution plan sponsors if major market corrections cause older employees to delay retirement beyond previous expectations. We move from that basic premise to argue that, given the continued evolution from defined benefit (DB) to defined contribution (DC) retirement plans, employers need to be more "proactive" in educating their employees about their retirement planning. A human resources perspective is used to support this argument, apart from and in addition to legal considerations such as ERISA Section 404(c). Specifics of employer involvement and its place as a component of an organization's culture are discussed. Finally, recommendations are given for employers to consider.     

Product pricing and solvency capital requirements for long-term care insurance

This paper presents a comprehensive assessment of premiums, reserves and solvency capital requirements (SCRs) for long-term care (LTC) insurance policies using Activities of Daily Living and US data. We compare stand-alone policies, whole life insurance policies with LTC benefit riders (LTC insurance combined with whole life insurance), life care annuities (LTC insurance combined with annuities) and shared LTC insurance in terms of net premium cost and SCRs. Net premiums and best-estimate reserves for base LTC insurance policies are determined using Thiele’s differential equation. Product features such as the elimination period and the maximum benefit period are compared using a simulation-based model. We show how a maximum benefit period can reduce costs and risks for LTC insurance products. SCRs for longevity risk and disability risk are based on the Solvency II standard formula. We quantify the extent to which whole life insurance policies with LTC benefit riders and life care annuities provide lower SCRs than stand-alone LTC insurance policies.     

Communicating the need for additional savings in the face of retiree health benefit cutbacks.

In preparing for retirement, employees need to consider not only their pension benefits but also the challenge of financing their retirement health care needs. Various trends evolving in our society indicate that future retirees will be increasingly dependent on their own retirement savings. Evidence suggests that employees are not fully aware of the significance of health costs in retirement and must be educated to the need to save for retiree health care expenses. This article discusses the issues of Medicare reduction and retiree health benefit cutbacks and the relative communication and education challenges such issues pose to employers.     

Genetics,Alzheimer’s Disease,and Long-Term Care Insurance

Abstract

This paper applies a model of Alzheimer’s disease (AD) developed by Macdonald and Pritchard (2000) to the question of the potential for adverse selection in long-term care (LTC) insurance introduced by the existence of DNA tests for variants of the ApoE gene, the ε4 allele of which is known to predispose one to earlier onset of AD. It computes the expected present values (EPVs) of model LTC benefits with respect to AD for each of five ApoE genotypes, weighted average EPVs with and without adverse selection, and sample underwriting ratings. The paper concludes that adverse selection could increase costs significantly in a small LTC insurance market only if current population genetic risk is not much smaller than that observed in case-based studies, and if carriers of the ε4 allele are very much more likely to buy LTC insurance. Finally, the paper considers the cost of a combined retirement package, providing both pension and LTC insurance, and shows that it can reduce adverse selection.     

Let's put consumers in charge of health care

Businesses spend billions on health insurance. And what do they get for their money? A lot of unhappy employees. Workers fret about the quality of the care they receive, the burden of their out-of-pocket expenses, and the gaps in their coverage. For businesses, health care has become a lose-lose proposition: They pay way too much, and they get way too little. The problem is that the health care industry has been shielded from consumer pressure--by employers, insurers, and the government. As a result, costs have exploded even as choices have narrowed. But if companies embrace a new model of health coverage--one that places control over both costs and care directly into the hands of employees--the competitive forces that spur productivity and innovation in consumer markets can be loosed upon the inefficient, tradition-bound health care system. Moving to consumer-driven health care requires that companies revamp their health benefits in six ways: Give employees incentives to shop intelligently; offer a real choice of insurance plans; charge employees prices that accurately reflect the company's costs; let providers set their own prices; adjust payments for each enrollee based on need; and provide relevant information. Putting consumers in charge of health care may seem like a radical approach. But individuals are highly motivated to educate themselves about their health, their insurance, and their care, and they want to seek the most value for their money. Promoting that economic dynamic--the same that fuels consumer markets everywhere--is the best way to enhance the health care industry's productivity and quality.     

Understanding the motivations of long-term care insurance owners: the importance of retirement planning

This article is based on two recent reports by the American Council of Life Insurers (ACLI) that illuminate the reasons why individuals purchase private long-term care insurance in both the group and individual markets. This information suggests that a younger and more diverse group of individuals are becoming increasingly interested in private long-term care insurance and that workplace education linkage the purchase of long-term care insurance to retirement planning may promote coverage.     

The impact of health care reform on older workers, retirees and employers

The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 impacts everyone who uses or pays for the health care system. Among the new law's effects will be changes in older workers' health care choices as they transition from full-time employees to part-time work or other jobs and, ultimately, to retirement, and the retiree health benefit choices facing their employers. This article reviews the major issues surrounding these changes, including those affecting retiree health benefits, benefits for Medicare-eligible retirees and health care options for older Americans not yet eligible for Medicare. The authors conclude that although employers will be reacting in 2010 and 2011 with regard to some issues surrounding FASB ASC 715-60 and the early retiree reinsurance program, employers should consider waiting to make major changes until regulations are issued and the health plans for active employees have been fully vetted.     

Key points to consider in the design and delivery of group long-term care insurance services

Long-term care insurance is a rapidly growing form of risk protection that many employers are beginning to make available to employees and their family members. Benefits managers need to use care in navigating the not yet fully charted waters of this new field of group insurance.     

日本社区综合护理体系研究

应对2025年人口老龄化高峰期的到来,日本政府为了方便老年人在自己住惯了的社区接受医疗护理服务,对原有的护理保险制度和医疗保险制度进行了改革,加强了医疗与护理的联系。在护理保险制度中引进定期巡回随时应对型上门护理和复合型护理服务两项新型护理形式;在医疗保险制度改革中通过病床的分化与合作,促进居家医疗;住宅政策中创建附带服务功能的老年住宅。过去的医疗护理政策主要考虑护理供给方的立场,积极建设护理设施,而此次的社区综合护理体系考虑更多的是老年人的立场,将医疗、护理、预防、居住、生活支援有机结合起来方便老年人接受社区综合护理。在市町村主导下,日本正在构建自助、互助、共助、公助相结合的,由全社会共同支撑的社区综合护理体系。     

How universal health care would influence decisions about work and retirement

The current U.S. health care system distorts individual decisions about work and retirement. After a brief explanation of how the current health care system works, this article reviews those distortions and considers how individuals would respond to the implementation of a universal health care system. The author argues that the likely adverse impacts of an employer health insurance mandate on low-skilled workers could be more than offset by a well-designed system of government subsidies.     

Don't They Care? Or,Are They Just Unaware? Risk Perception and the Demand for Long‐Term Care Insurance

The potential need for long‐term care (LTC) is one of the greatest financial risks faced not only by the elderly but also by their adult children, who often provide care or financial assistance. We investigate adult children's role in the demand for LTC insurance. Similar to flood insurance, we find that demand for LTC insurance is low due to low risk perception. The more aware adult children are of the risk, the more likely LTC insurance is to be purchased, either by the children themselves on behalf of their parents or by the parents under the influence of their children.     

Quality of life aspirations: Exploring baby-boomer financial means-end goal structures

Motivated by industry concerns that baby-boomers are neglecting to plan for an eventual retirement, this study examines perceptions about the importance of financial means in contributing to their quality of life. Framed by means-end chain analysis and scholarship in consumer evaluations of life satisfaction, a number of theoretical expectations are empirically confirmed. Findings indicate that financial means are not high in the order of life domains that contribute to respondent quality of life. Retirement planning relies predominantly on compulsory superannuation contributions from employers, with the assumption that this would provide sufficient income to maintain their current lifestyle. Prior to retirement, respondents reported being more preoccupied with funding children's education costs and home mortgage payments. They also wished to avoid the embarrassment of approaching a financial planner until they had a reasonable sum that required more skilful investment advice. Finally, it was revealed that gender had an influence on the priority given to financial means and subsequent decisions to seek financial planning advice. These findings confirm the importance for financial planners to determine the core motivations and subordinate means through which baby-boomers envisage achieving quality of life on the journey into retirement.     

Sounds great, but what's in it for me? Helping employees understand their role in the retirement planning process

The communication of retirement plans by employers to their workers has greatly improved, but in many cases still falls short of getting employees to understand their roles in planning for their own retirement. The author states that a well-designed personalized retirement savings education program encourages employees to take ownership of their retirement plan. Three employee profiles are examined in the context of the personalized retirement education process.     

Health care consumerism: engaging the real buyers--employees

Many employers have begun moving toward health care consumerism strategies designed to encourage employees to take more responsibility for their health care and the cost of that care. Recent surveys suggest ways employers can ensure their consumerism strategies succeed in engaging employees and, ultimately, encourage employees to change their behavior. This article describes what those surveys reveal about employer and employee perspectives on consumerism and suggests steps employers can take to align their interests with those of their employees in order to manage the demand for and use of health care.     

延迟退休、个人账户调整与城镇职工医疗保险基金可持续运行

文章通过构建精算模型,从城镇职工医疗保险基金可持续运行的角度对不同延迟退休和个人账户调整方案及组合进行模拟评估。研究发现:现行制度下城镇职工医疗保险统筹基金面临支付风险,延迟退休仅能够在短期内缓解城镇职工医疗保险基金的支付压力;仅依靠延迟退休难以在长期内缓解城镇职工医疗保险基金的支付压力,运用“延迟退休+个人账户调整”的模式,即在延迟退休的基础上对个人账户进行调整,更有利于基金的长期稳定运行。在现行退休制度下,建议取消个人账户,将单位缴费和个人缴纳的费用计入统筹账户,城镇职工医疗保险基金的单位缴费率可以下调1%;在延迟退休政策势在必行的情况下,建议在男性和女性不同岁退休的基础上,取消个人账户,实现城镇职工医疗保险单位缴费率降低2%。这样既有利于基金的可持续运行,也可以保证基金的运行效率,更能加强城镇职工医疗保险制度的互助共济性。     

Asset allocation and age effects in retirement savings choices

We examine the asset allocation decisions of members of three large Australian retirement savings funds. Superannuation Guarantee legislation in 1992 made Australian employees compulsory investors by requiring employers to contribute a fixed proportion of earnings to a superannuation fund on behalf of employees. A majority of these employees can choose an investment strategy for these contributions. We examine how actual investment strategy and asset allocation choices of members change with age in view of the conventional wisdom that individuals allocate less to risky assets as they age and investments theory which provides conflicting advice on the issue.     

Long-Term Care Insurance Purchase Patterns

Given the aging population and high cost of long-term care, many Americans are concerned about financing long-term care services. Despite this concern, private long-term care insurance policy sales have experienced slow growth. On average only about 7 percent of the population aged 65 and older has long-term care insurance, but this percentage varies greatly across the states. In this study we test hypothesized relationships between purchase of long-term care insurance and various explanatory factors. We provide evidence that state Medicaid nursing home expenditure levels and the relative sizes of the elderly population and the nursing home population are significant explanatory factors of purchase rates. We find no evidence that public–private partnership regulation, the quality of available facilities, or agent marketing controls affect purchase. Findings of the study are useful to insurers, legislators, regulators, and others involved in the public policy debate about financing long-term care.