Alternatives to traditional Medicare: Medicare Part C poised to prosper

Recent events indicate that Medicare Part C (Medicare Advantage) plans are poised to prosper. Yet many employers express hesitation to offer Medicare Advantage, formerly known as Medicare+Choice, plans to their retirees because they are concerned about the potential withdrawal of those plans if there is a reversal of federal funding rules. This article addresses those concerns. It provides a historical overview of Medicare Part C and describes the impact of the most recent agency guidance. The author cites plan trends, raises employer implications and concludes that Medicare Advantage plans will continue to expand, possibly facilitated by employers as they implement leading-edge retiree medical designs.     

Spousal surcharge programs--an overview

Spousal surcharge programs help employers whose goal is to provide "above-average" health benefit plans by limiting the potential "financial leakage" liabilities from covering the spouses of employees who are eligible for other health care coverage. Spousal surcharge programs are just one alternative available to help employers manage the rising cost of providing health care coverage to dependents. This article explores the prevalence, plan design, financial implications, administrative and other considerations in implementing a spousal surcharge program.     

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.     

Medicare+Choice--cost and funding issues for Medicare risk plans.

The Balanced Budget Act of 1997 contained the most important changes in Medicare since its inception in 1965. The most notable changes include Medicare+Choice, which includes existing Medicare risk programs. The author offers a brief summary of the history of Medicare and the changes that will impact employer/union service providers. Areas of discussion include typical Medicare risk benefit packages, a financial analysis of Medicare risk contractors and changes to risk contracting under the new law.     

Retiree health care costs: a workable plan

Thirty-three million retired Americans have taken for granted the warm security that health care would be provided throughout their retirement--by Medicare, by their employers, certainly by someone, because it must be an inalienable right. As the financial aspects of retiree health care are examined, however, it is important to keep in mind who will pay for it and how much we are willing to spend. This raises three important questions: Are we ready to spend that much? Is that sum enough to produce the system we want? Will we get our money's worth or just start another round of health care inflation? This article suggests two programs, one for addressing this staggering problem and another to deal with the financing of retiree health care.     

Vocational rehabilitation services in workers' compensation programs: evaluating research model effectiveness

Vocational rehabilitation programs are a strategy used by many, employers to manage workers' compensation costs and the consequence of injuries for their workers. Soaring costs for employers and public entities associated with workers' compensation programs and vocational rehabilitation services indicate that additional research is needed--a need further demonstrated by the serious financial, social and psychological costs that workplace disability exacts from workers.     

Medicare retiree drug subsidy compliance considerations

Employers and plan sponsors have struggled with many issues associated with Medicare's retiree drug subsidy program. Recent reviews of employer methods for collecting the subsidy from the Centers for Medicare and Medicaid Services (CMS) identified significant gaps that would affect the subsidy payment and create issues in case of an audit. In fact, the Department of Health and Human Services Office of Inspector General (OIG) has placed audits of employer retiree drug subsidy processes in its work plans for 2006 and 2007. This article discusses areas that employers must address now to avoid significant long-term financial and compliance problems in the future.     

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.     

Intangible Assets and Firms' Disclosures: An Empirical Investigation

This study examines how research and development (R&38;D) and advertising expenditures affect firms' disclosures. Generally accepted accounting principles (GAAP) mandate that these expenditures be immediately expensed in financial reports, despite the fact that they often benefit the firm for longer periods. Prior studies find, however, that investors consider intangible assets in their valuation of firms. These studies argue that current GAAP, by not recognizing the value generated by these assets, severely impairs the usefulness of accounting reports. I investigate if firms with higher levels of R&38;D and advertising expenditures place greater reliance on voluntary, and therefore more flexible, disclosures such as voluntary publications and investor relations. Using analysts' ratings of firms' disclosures, I find that firms with higher levels of intangible assets are more likely to receive significantly higher ratings for their investor relations programs or voluntary publications than for their annual reports. These findings suggest that firms with higher levels of intangible assets emphasize supplemental disclosures because mandated accounting disclosures inadequately present their financial performance. These results have important policy implications for regulators and investors since they indicate that voluntary disclosures, which are unregulated and unaudited, are an important means of disclosure for these firms.     

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.     

A sign of the times.

Pressure placed on employers to enhance the bottom line comes from a multitude of changes in the marketplace and has resulted in employers seeking to limit their liabilities and expenses for retiree medical care. To address retiree medical issues, employers have adapted a number of strategies that are presented in this article. These include eliminating or modifying benefits, using a defined contribution approach, capping subsidies and enrolling retirees in Medicare HMOs.     

Health care spending accounts: a flexible solution for Canadian employers

Flexible benefits plans have grown more slowly in Canada than in the United States, largely because of certain legal and regulatory considerations. Health care spending accounts (HCSAs) provide a cost-effective way for Canadian employers to address the health care benefit needs of a diverse workforce. A flexible health care spending account is a versatile and cost-effective instrument that can be used by Canadian employers that wish to provide a full range of health care benefits to employees. The health care alternatives available through an HCSA can provide employees with an opportunity to customize and optimize their benefits program. Regulatory requirements that an HCSA must meet in order to qualify for available tax advantages are discussed, as are the range of health care services that may be covered.     

Managed disability--past, present and future

This article discusses the overall development of managed disability. First, it explores historical factors that have influenced managed disability programs, followed by important considerations in current programs, and finally discusses future issues to contemplate for successful evolution to occur. The authors conclude by pointing out the opportunity for insurers to develop innovative and responsive products and the opportunity for employers to have a direct impact on reshaping disability benefit programs.