Recently in Benefits Category

Source: Wendy R. Ginsberg, Congressional Research Service, R41030, January 21, 2010

From the summary:
The federal government provides a variety of benefits to its 8 million employees and annuitants. Among these benefits are health insurance; enhanced dental and vision benefits; survivor benefits; retirement and disability benefits; family, medical, and emergency leave; and reimbursement of relocation costs. Pursuant to Title 5 U.S.C. Chapters 89, 89A, 89B and other statutes, millions of federal employees may extend these benefits to their spouses and children. An estimated 34,000 federal employees are in same-sex relationships, including state-recognized marriages, civil unions, or domestic partnerships.

Source: Center for State and Local Government Excellence, January 2010

From the summary:
Hiring freezes, pay freezes, layoffs, and furloughs top the list of ways that local and state governments are cutting costs, according to a Center for Excellence online survey of government managers.

States and local governments also have made significant changes in their benefit offerings.

Source: Katherine Baicker, David Cutler and Zirui Song, Health Affairs, Vol. 29 no. 2, Published online 14 January 2010
(subscription required)

From the abstract:
Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent. Although further exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.

Source: Center for State and Local Government Excellence, January 2010

From the summary:
Hiring freezes, pay freezes, layoffs, and furloughs top the list of ways that local and state governments are cutting costs, according to a Center for Excellence online survey of government managers.

States and local governments also have made significant changes in their benefit offerings.

- Changes in health and retirement plans
Half of the respondents, human resources professionals, report that their governments have made changes to their health care plans:
* Increased employee contributions (69 percent)
* Added number of years required to vest (25 percent)
* Added wellness programs, 24-hour nurse lines, or on-site clinics (25 percent)
* Reduced benefits (23 percent)
* Tiered benefits (15 percent)
* Decreased employer contributions (10 percent)

Among the 21 percent whose governments have changed their retirement plans, 73 percent say the changes have not affected current workers and 60 percent say the changes have not affected new hires.

- Critical positions go unfilled
There are signs that governments need a more strategic approach to their talent challenges. Survey respondents said they are struggling to fill certain critical positions, including jobs in engineering, skilled trades, information technology, health care, finance, law enforcement, and top management.

- Furloughs don't always equal savings
Even furloughs have not produced the savings that had been anticipated in some places. While 61 percent of respondents say that they achieved the savings that had been budgeted, 39 percent said they did not.

- Fiscal constraints and talent challenges
The economic downturn has affected retirement plans, giving governments a little breathing room. Almost half (46 percent) of the survey's respondents report that retirement-eligible employees are postponing their retirements.

Source: Marc Kronson, Bureau of Labor Statistics, Compensation and Working Conditions, December 23, 2009

Data from the 2009 National Compensation Survey (NCS) reveal that take-up rates for employer-provided medical care plans differ between private industry workers and State and local government workers. Take-up rates also vary among workers in their respective private and State and local government sectors, by worker and establishment characteristics. This article discusses the concept of a take-up rate and presents take-up rate comparisons among workers in two major sectors of the economy, utilizing the March 2009 NCS estimates on take-up rates for employer-provided medical plans.

NOTE: Take-up rate refers to the percent of workers with access to a plan who actually "take up," or participate, in a plan.

Source: Paul Fronstin, Employee Benefit Research Institute, Issue Brief, no. 338, January 2010

Health insurance reform legislation pending in Congress would have a mixed impact on retiree health benefits, according to a study published today by EBRI. In the short term, some provisions of the legislation would help bolster early retiree coverage, while in the longer term other provisions could create significant incentives for employers to drop retiree coverage.
See also:
Press release

Source: Larry Frolik, University of Pittsburgh Legal Studies Research Paper No. 2009-34, November 14, 2009

From the abstract:
America's retirees are faced with a potential financial disaster. Economic security in retirement has long depended on Social Security, private savings and employer provided retirement plans. While much attention has been paid to the financial problems of Social Security and the lack of private saving for retirement, little attention has been paid to an alarming development in employer provided retirement plans: the likely inability of retirees during the long years of their retirement to successfully manage their retirement funds accumulated in 401(k) and similar accounts. We as a society have set up a funding system for retirement that assumes retirees will be able to successfully manage their IRAs for the 20 or 30 years of retirement. We know, however, that most will not. Some will lack the basic intelligence or knowledge of finance take on the risk, oversight and planning. Some will be fine managing an IRA at age 65, but lose the ability due to physical decline. Finally, millions of aging IRA owners will lose the ability to manage their finances because of the lost of mental capacity, primarily because of dementia. Asking individuals to husband a lump-sum payout from a 401(k) retirement account for the 20 to 30 years of retirement as they physically and mentally decline is a recipe for disaster. Unless we provide a more secure way to stretch retirement dollars into the twilight of retiree lives, we can expect to see more and more elderly retirees slide into poverty. The solution is to create federally guaranteed life-time annuities that retirees can purchase with the funds accumulated in their 401(k) retirement accounts.

Source: United States Government Accountability Office, GAO-10-5, October 29, 2009

In 1976, Congress established the Public Safety Officers' Benefits (PSOB) program, which is administered by the Department of Justice (Justice) and provides lump-sum payments to eligible public safety officers and their survivors after a line-of-duty death or permanent and total disability. The program also provides educational benefits to an eligible officer's spouse and children. GAO was asked to determine (1) the extent to which claimants receive PSOB program benefits and how long the claims process takes, (2) any issues raised by state and local agencies and others who assist claimants in seeking benefits, and (3) the extent to which the PSOB program follows recognized government standards and guidelines for effective program management. To address these objectives, we reviewed PSOB claims that were opened during fiscal years 2006 to 2008 for all three types of claims, reviewed relevant agency documents, and interviewed PSOB program officials, representatives of advocacy organizations, and state and local officials in five selected states. GAO found that all education claims and over three-quarters of death claims opened in fiscal years 2006 through 2008 were closed and approved as of April 2009, while only about 31 percent of disability claims initiated during that period had determinations. The majority of disability claims remained pending because they took significantly longer to process than other claims--while education and death claims were generally processed in under a year, disability claims took between 17 and 26 months. State and local officials GAO interviewed were generally concerned about their lack of awareness of certain PSOB program benefits, challenges with establishing eligibility, and the perceived long wait time for benefits. Specifically, officials were generally more aware of death than disability and education benefits.

Source: Robert L. Clark, Center for State and Local Government Excellence, Issue Brief, November 2009

States with the lowest unfunded liabilities include North Dakota, Wyoming, Iowa, Oregon, Rhode Island, and Oklahoma; states with the largest include New Jersey, New York, California, North Carolina, Connecticut, Louisiana, and Texas. The brief finds that:

- Although there are wide-spread reports of a major fiscal crisis, the reality is that some states face a fiscal crisis while others do not.
- There are substantial differences in the total liabilities of state retiree health plans, depending on the generosity of the plan and the size of the public sector.
- Retirement benefits are not protected by state laws or constitutions, and public sector employers will continue to amend their plans to reduce costs.
See also:
2008 version

Source: National Conference of State Legislatures, November 2009

All 50 states provide health insurance coverage for their state employees. Most have done so for decades. However, the amount of coverage, who is eligible to enroll, and the portions paid by the state employer and by the individual worker always have varied from state to state.

In the past five years these state benefit plans have attracted much more attention among legislators, governors and policymakers. Often, this is because:

1. Rapidly rising commercial premiums are impacting state budgets;
2. State fiscal pressures are leading to more proposals to increase employee share of costs;
3. Co-payments and deductibles are on the rise in many places, separate from the established premiums.
See also:
* In the News: 2009 State Employee Health Programs Debates and Changes
* 2009 State Employee Health Premiums: Family coverage (includes comparison with 2006 premiums)
* 2009 Individual Coverage (includes comparison with 2006 premiums) - email for copy
* 2008 State Legislator Compensation- Health, Dental and Optical Benefits
* Chart of State Employee Health Premiums - 1999-2006 (compares cost of family coverage)
* Trends in State Employee Health Benefits