Headlines about "Health plans - retiree coverage"

Gathered from the web by the editors at BenefitsLink.com.
For 11 States and Puerto Rico, Cost of Employee Benefits Is One of Three Top Fiscal Issues for 2012 (PDF)
"Dealing with unfunded liabilities, increasing employee contributions and making significant reforms lie in the year ahead for state lawmakers." (National Conference of State Legislatures)

Providence Is Now on 'the Brink of Bankruptcy,' Mayor Taveras Warns
"Taveras said the city's retirees must accept reduced pension and health care benefits to save the city from financial ruin. A decree signed in 1991 by Mayor Buddy Cianci pushed the city's pension liability 'into the stratosphere' by giving annual cost-of-living increases of 5% and 6% to more than 600 retirees, he said." (WPRI.com)

Providence, R.I., Mayor Proposes Benefit Cuts to Avert Bankruptcy
"Mayor Angel Taveras, a Democrat, outlined plans to reduce pensions for retired municipal workers and vowed to appeal a recent state court ruling preventing the city from forcing its retirees to switch to the federal Medicare health insurance program when they turned 65." (New York Times; free registration required)

Saving Company Retiree Health Plans
"Bankruptcy judges usually let companies terminate such plans, figuring the move will make it more likely that creditors will be paid and that the company's chances of turning itself around will be enhanced if it can shed millions or even billions of dollars in retiree obligations at the stroke of a pen. Retirees, who are unsecured creditors, always are vulnerable." (The Wall Street Journal)

Establishing and Administering an OPEB Trust
"The Government Finance Officers Association (GFOA) recommends creating a qualified trust fund to prefund OPEB obligations. To ensure that the trust is established and administered properly, governments should consult qualified legal counsel and fully understand the following issues . . . ." (Government Finance Officer's Association)

PBGC Responds to American Airlines' Letter on Employee Pensions
"The American letter also downplayed the pension cuts that would occur if American's plans are terminated and PBGC benefits are substituted. Although the figure appears nowhere in the management letter, the airline itself estimates that some 13,000 current or retired employees will have their pensions cut." (Pension Benefit Guaranty Corporation)

2012 Hot Topics in Retirement: Survey Highlights (PDF)
"This year's survey results show that employers are continuing to assess the most efective way to deliver retirement benefits to their employees and keep up with the evolving retirement landscape." (Aon Hewitt)

[Guidance Overview] ERRP Reminder: March 30 Deadline for Submission of Full-Replacement Claim List
"Last month the CMS announced that the ERRP would be closed for claims incurred after December 31, 2011, due to the projected exhaustion of funds." (Deloitte via BenefitsLink.com)

Number of Retirees Underlies Kodak Bankruptcy Filing
"Here's one way of understanding Eastman Kodak Co.'s problems: The company has twice as many retirees drawing benefits in the U.S. as it has active employees world-wide." (Wall Street Journal)

[Opinion] Borenstein: Be Honest, Tell Taxpayers How Much We Owe
"By one estimate, the statewide taxpayer burden for unfunded pension system liabilities alone is $180 billion to $620 billion. The latter number works out to $45,000 for each household in the state." (ContraCostaTimes.com)

[Guidance Overview] Two Important ERRP Deadlines
"[1.] [CMS] requests Plan Sponsors that have received reimbursement under the Early Retiree Reinsurance Program (ERRP) to complete a survey located at https://www.research.net/s/CMS-ERRP-Survey. [2.] [HHS] is requiring Plan Sponsors that have been reimbursed with ERRP funds to submit a full-replacement Claims List that passes the automated edits introduced on October 1, 2011 and an associated reimbursement request by March 30, 2012 for each plan year." (Cheiron, Inc.)

Kodak Retirees Fear for Benefits
"For many Eastman Kodak Co. retirees, the company's financial trouble is shaking the very foundation on which they built their careers, lives and nest eggs. . . . While retirees have reason to be worried about their health care, their pensions should be safe, according to several financial experts." (www.democratandchronicle.com)

Massachusetts Cities Face $4.5B Unfunded Retiree Health Care Costs
"'Without reforms, over the next 30 years municipalities would be forced to siphon tens of millions from education, public safety and other critical services simply to fund the annual costs of retiree healthcare, leading to the layoffs of hundreds if not thousands of municipal employees,' the report said, according to The Herald News." (PLANSPONSOR.COM)

Retiree Health Benefit Offerings Continue to Decrease
"The Benefits USA 2011/2012 survey results found 21.9% of companies offer supplemental retiree health coverage to retired employees. That's a slight dip from 22.9% reported in 2006. Employees are required to work an average of 12 years for their employer in order to qualify to receive this benefit upon retirement." (PLANSPONSOR.COM)

[Guidance Overview] As ERRP Comes to a Close: Helping Plan Sponsors Keep What They Have Received
"This Capital Checkup will review the following ERRP news . . .: The program coming to a close, A requirement that plan sponsor submit an error-free claims list in order to be reimbursed, A survey on how ERRP reimbursements are being used, and The start of audits." (The Segal Group, Inc.)

Does Retiree Health Insurance Encourage Early Retirement?
"We find that retiree health coverage has its strongest effects at ages 62 and 63, resulting in a 3.7 percentage point (21.2 percent) increase in the probability of turnover at age 62 and a 5.1 percentage point (32.2 percent) increase in the probability of turnover at age 63; it has a more modest effects for individuals under the age of 62." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)

Employment-Based Retiree Health Benefits Could Encourage Early Retirement
"NBER researchers investigated the impact of retiree health insurance on early retirement using employee-level data from 64 diverse firms that are clients of Towers Watson." (PLANSPONSOR.COM)

[Opinion] Early Retiree Reinsurance Program flawed
"A HEALTH CARE reform law program providing $5 billion in subsidies for sponsors of early retiree health plans may not have been a 'bailout,' but it was inequitable and maybe even deceptive." (Business Insurance)

NY Unions File Lawsuit over Retiree Health Care Increase
"Seven New York state unions filed federal lawsuits [last week], challenging the Cuomo administration's increase in the amount retirees must contribute toward their healthcare." (PLANSPONSOR.COM)

On New York State's Retiree Health Care Cost Rise: Lawsuits
"Public employee unions are suing over the state's decision to increase the health care contributions for current retirees, claiming the 2 percent increases that took effect in October are unconstitutional." (Hearst Communications Inc.)

[Opinion] Calculating Public Employee Total Compensation
"A study released late last year, sponsored by U.C. Berkeley's 'Institute for Research on Labor and Employment' entitled 'The Truth about Public Employees in California: They are Neither Overpaid nor Overcompensated,' contains its conclusion in its title, but whether or not this study is presenting the 'truth' or not is worthy of further discussion." (Union Watch)

A Look at Public Sector Defined Contribution Health Accounts
"GASB 45 requires that unfunded liabilities be amortized over a 30-year actuarial time period. The magnitude of the OPEB liabilities was much more obvious after the accounting standard was implemented. To address these large OPEB liabilities, many state and local governments have reduced the health benefits offered to employees upon retirement." (National Association of Government Defined Contribution Administrators)

New Mexico Retiree Health Care Authority Considers Minimum Retirement Age
"According to the Santa Fe New Mexican, New Mexico subsidizes the cost of monthly healthcare premiums paid by retirees of state government, public school systems and local governments. If the minimum retirement age is adopted, that means individuals who retire before the minimum retirement age, whether 55 or 60, would pay the full freight of healthcare costs until they reach the prescribed age." (PLANSPONSOR.COM)

HHS Announces End Date for Claims Under Early Retiree Reinsurance Program
"HHS stopped accepting new applications to the ERRP earlier this year . . . . That shut the doors, and now the party's almost over. With less than 10% of the originally allocated funds remaining, participating plan sponsors will want to move quickly to assure that their claims get in under the wire or are high on the list of held claims." (Thomson Reuters/EBIA)

Michigan Governor Signs Bills Offering State Workers More Benefit Options
"Michigan Governor Rick Snyder signed two bills to change the way the state manages retiree healthcare. In addition to changing retiree healthcare, the bills will cut the state's long-term unfunded liability by one-third (from $14.5 billion to $8.9 billion)." (PLANSPONSOR.COM)

Michigan State Workers to Get Back 3% Taken from Pay Toward Retiree Health Care
"Lower courts had ruled that the Legislature acted unlawfully when it required the deduction because, under the Michigan Constitution, setting state employee pay is the role of the Civil Service Commission." (Detroit Free Press)

[Guidance Overview] 'Race' to Submit Final ERRP Requests Begins
"CMS notes that it will pay future reimbursement requests 'in the order in which [they] were received,' so employers have a strong incentive to submit future reimbursement requests as soon as possible." (Quarles & Brady LLP)

Health Care Law Has Given Companies New Reason to Cut Back on Retiree Health Benefit Offerings
"The major health reform legislation passed by Congress in 2010 . . . imposes new taxes on certain retiree medical plans, including those providing particularly generous benefits. These new tax restrictions provide an opportune time to revisit retiree medical benefits and how they are structured." (CFO Publishing LLC)

Early Retiree Reinsurance Program Cutting Off Reimbursements for Claims Incurred after December 31, 2011
"Claims are being cut off because the ERRP is approaching the limit of $5 billion allocated under health care reform . . . ." (Practical Law Company)

USPS Hopes for Another Deferral on Mandatory Payment to Prefund Retirees' Health Benefits
"The Senate Homeland Security and Governmental Affairs Committee last month approved postal reform legislation that included language to restructure prefunded retirement health benefits, reducing the payment goal to 80 percent, and to require USPS to negotiate with its unions to develop a new employee health care plan." (National Journal Group, Inc.)

Texas Retirement System Changes Retirees' Health Plan to a Medicare Advantage Health-Insurance Plan
"With the change, the system's projected unfunded liability for retiree healthcare fell to $21.5 billion as of September from a year earlier, according to a report to the fund's board Bloomberg reported." (PLANSPONSOR.COM)

[Official Guidance] Text of HHS Announcement Ending Early Retiree Insurance Program for Claims Incurred After Year-End (PDF)
"This notice announces that CMS, based on the projected availability of funding under the Early Retiree Reinsurance Program (ERRP), is exercising its authority under the ERRP regulations at 45 CFR 149.45(a) to deny ERRP reimbursement requests, in their entirety, that include claims that are incurred after December 31, 2011. Therefore, plan sponsors must not include such claims in their Claim Lists and Summary Cost Data submitted in support of a reimbursement request." (U.S. Department of Health & Human Services)

Fund To Help Cover Early Retirees Nearly Out of Money
"A $5 billion fund that helped cover health insurance for more than five million early retirees will stop taking claims for expenses incurred after Dec. 31 because it is running out of money, according to a notice Friday in the Federal Register." (The Henry J. Kaiser Family Foundation)

NY Retiree Group Sues over Increase in Health Benefit Costs
"The suit asks for a rollback of a 2% increase in the percentage retirees pay toward the cost of their health insurance premiums. The lawsuit, RPEA, et. al. vs. Cuomo, et.al. . . . asks that Cuomo and other state officials who 'administratively extended' provisions of negotiated union contracts to retired public employees be legally stopped from imposing such terms on existing retirees." (PLANSPONSOR.COM)

California Court Vests County Retirees' Medical Benefits
"'Under California law, a vested right to health benefits for retired county employees can be implied under certain circumstances from a county ordinance or resolution,' wrote Justice Marvin R. Baxter for the court in a decision involving Orange County employees and retirees." (Governing)

[Guidance Overview] Purchase Agreements May Amend Benefit Plans
"Followed to its logical conclusion, the Fifth Circuit's reasoning in Evans is not limited to benefits provisions in purchase agreements ? potentially any writing that discusses a plan and is approved by an individual, group, or entity with the authority to amend the plan is an amendment. This could mean, for example, that board resolutions, compensation committee rulings, or other documents not intended to amend a plan could, in fact, amend a plan." (Bryan Cave LLP)

Inside The Corporate Plan to Occupy The Pentagon
"[T]he push for pension cuts and other corporate 'reforms' at the Pentagon originates from an obscure advisory panel that has existed for a decade: the Defense Business Board. Its 21 members know little about military affairs, but they are rich in Wall Street experience, including with some of the biggest companies implicated in the 2008 financial meltdown." (Mother Jones)

Text of California Supreme Court Ruling Limiting Cuts to Public Retiree Health Care Benefits
"The court ruled that once a city or county government has pledged retirement health care benefits at a certain level, it can't go back on its promise and cut benefits for employees who have already retired." (Governing.com)

California Court's Retiree Health Care Ruling Could Reach Far
"Courts should be cautious and require strong evidence before finding an implicit promise to maintain health coverage, making sure that neither the supervisors nor the public 'will be blindsided by unexpected obligations,' said Justice Marvin Baxter in Monday's decision. But he rejected the county's attempt to bar all such lawsuits." (San Francisco Chronicle)

Early Retiree Reinsurance Program Funds 80% Used Up
"Of the total paid out so far, $387.2 million was distributed to the United Auto Workers Retiree Medical Benefits Trust. The trust is a voluntary employees' beneficiary association set up by the UAW under a 2007 collective bargaining agreement between General Motors Corp., Ford Motor Co. and Chrysler L.L.C. and the UAW." (Business Insurance)

Retired California Public Workers Can Count on Promised Benefits, Court Says
"Health benefits for government retirees may not be eliminated if state and local governments had clearly promised workers those benefits, the California Supreme Court ruled in an Orange County case . . . ." (Los Angeles Times)

CMS to Survey Employers on how They Used Early Retiree Reimbursement Funds
"That survey, the CMS explained in a notice published in Wednesday's Federal Register, is required under the Patient Protection and Affordable Care Act, which requires the secretary of the Department of Health and Human Services to develop a mechanism 'to monitor the appropriate use of the funds.'" (Business Insurance)

Public-Sector Pensions Are Protected in California Constitution
"[The U.S. Constitution states that] 'No state shall . . . pass any . . . law impairing the obligation of contracts . . . ' As widely interpreted -- most importantly by the courts (or so we laymen are told) -- the clause means that pensions promised state and local government workers on the day they were hired cannot be reduced [even with respect to the rate of future benefit accruals, potentially including an increase in required employee contributions] without giving them a new compensating benefit." (Los Angeles Times)

USPS Pension Payments Could Finance Early Retirement
"At least 100,000 employees of the U.S. Postal Service could be offered early retirement buyouts under a Senate plan that lets the agency take back $6.9 billion in pension overpayments to finance the incentives and to pay other debts that have pushed it to the brink of insolvency." (Pensions & Investments)

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