Category Archives: Benefits

The Cost of the Closet and the Rewards of Inclusion: Why the Workplace Environment for LGBT People Matters to Employers

Source: Deena Fidas, Human Rights Campaign Foundation, May 2014

From the summary:
In this follow-up to the groundbreaking 2009 study, Degrees of Equality, the Human Rights Campaign Foundation has studied the national picture of lesbian, gay, bisexual, and transgender workers’ experiences of inclusion on the job as contrasting with the perceptions of their non-LGBT coworkers on issues. The study reveals that despite a changing social and legal landscape for LGBT people, still over half (53 percent) of LGBT workers nationwide hide who they are at work.

2014 Retirement Confidence Survey of the State and Local Government Workforce

Source: Paul J. Yakoboski, Joshua M. Franzel, Center for State and Local Government Excellence and TIAA-CREF Institute, August 2014

From the summary:
This report analyzes data from a recent survey initiative that examined the employment and retirement planning and saving experiences of state and local government workers, as well as their confidence in their retirement income prospects.

Highlights from the report include the following:
– Virtually all full-time state and local workers are covered by some form of retirement plan offered by their employer, but only 39 percent are very confident that they will receive all of the benefits that they have earned in retirement.
– In comparison to 2012, when 72 percent of respondents expected to work for pay after retiring, the figure has dropped to 49 percent in 2014.
– While 2014 confidence levels in overall retirement income prospects are generally consistent with 2012 (18 percent are very confident and 56 percent somewhat confident), there was a decrease in the proportion of public-sector employees who are either very confident or not at all confident. This year’s survey also revealed a 7 percentage-point shift of K-12 teachers from very confident to somewhat confident about their retirement income prospects.
– Public-sector workers are concerned about federal retirement income security programs. Only 7 percent of state and local government employees are very confident that the Social Security system will continue to provide benefits of at least equal value to the benefits received by retirees today, while 55 percent are not confident. The same goes for Medicare benefits, with 6 percent reporting they are very confident and 52 percent saying they are not confident.
– In 2012, 51 percent of retirement savers in the public-sector workforce said they received retirement planning advice from a professional financial advisor within the past three years. In 2014, only 38 percent reported receiving advice. But this year’s report suggests more individuals are following all the investment advice they receive. For example, 24 percent reported following all the investment advice received in 2014 vs. 18 percent in 2012.

Size of Long-term Obligations Varies Across States

Source: Sarah Babbage and Kil Huh, Pew Charitable Trusts, Fiscal 50, August 19, 2014

States commit to future spending both when they borrow and when they fall short of funding the cost of retirement benefits for their public employees. As of fiscal year 2012, the largest of these long-term obligations was unfunded pension liabilities in 35 states, unfunded retiree health care costs in seven states, and public debt in eight states.

States pass balanced budgets each year, but some spending commitments that will not come due for years go unpaid. A snapshot of debt and unfunded retirement costs in fiscal 2012 shows totals of $915 billion in unfunded pension benefits, $757 billion in outstanding public debt, and $577 billion in unfunded retiree health care and other nonpension benefits.

States take on these obligations, which are paid over decades, for different reasons. Sometimes a state borrows to build infrastructure projects that deliver services for years in the future and may spur economic growth. When the bill comes due, states usually cover these debt obligations before other expenses. In other instances, a state creates unfunded liabilities when it sets aside less than is needed to cover the full retirement costs for public services already performed, shifting those expenses to future taxpayers. …

Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World

Source: Richard L. Kaplan, Connecticut Insurance Law Journal, Vol. 20 No. 2, 2014

From the abstract:
A retiree’s single largest and most unpredictable expense is paying for health care, and this article explains the various choices and options that a retiree confronts regarding that expense. The article examines the traditional components of Medicare (Parts A and B), prescription drug plans (Medicare Part D), Medigap coverage, and managed care alternatives, as well as long-term care insurance. Each section addresses the financial trade-offs and time-sensitive decisions that are involved.

Defined Benefit vs. Defined Contribution — the Continuing Challenge of State Pensions

Source: Mary Branham, Council of State Governments, e-newsletter, no. 142, August 14, 2014

While public pension plans still face problems, the situation isn’t as bleak as the headlines report, according to Dana Bilyeu, executive director of the National Association of State Retirement Administrators. In fact, public pension plans across the country are 80 percent funded, on aggregate; that’s down from 101 percent funded in 2001, Bilyeu said. … In addition, she said, about 87 percent of the public pension plans—covering state and local governments, as well as teachers, police and firefighters—make their annual required contribution, or ARC. Popular media, she said, focus on the plans in distress. …

…Hank Kim, executive director and counsel for the National Conference on Public Employee Retirement Systems, said defined benefit plans are definitely sustainable if:
Sponsors make contributions consistently and fully;
Employees make their contributions;
Investments are well managed and have low fees; and
Benefits are appropriate and funded…..
Employees Need to be Involved in Pension Changes
Source: Mary Branham, Council of State Governments, e-newsletter, no. 142, August 14, 2014

State Employee Health Plan Spending

Source: Pew Charitable Trusts, August 2014

From the summary:
A clarifying note and revised data were added to pages 8 and 30 of the report reflecting further analysis of New Jersey. This report provides a first-of-its kind analysis of the costs and characteristics of state employee health plans, and offers a nationwide benchmark against which states can be compared. Collectively, states spent about $31 billion to insure 2.7 million employee households in 2013, a slight uptick in spending from 2011 and 2012 after adjusting for inflation. The average per-employee per-month premium for employees’ and dependents’ coverage was $963. States paid $808 (84 percent) of the total on average, and employees covered the remaining $155 (16 percent). However, this average masks sharp differences across the states, due to factors such as plan richness, average household size, provider price and physician practice patterns, as well as the age and health status of enrollees. The report discusses each of these factors and finds that even after controlling for differences among states in average health plan richness and enrollee households size, a large range in premiums across the states remains. The report also reviews several policy approaches available to states to influence their costs

Free Exercise of Religion by Closely Held Corporations: Implications of Burwell v. Hobby Lobby Stores, Inc.

Source: Cynthia Brougher, Congressional Research Service, CRS Report, R43654, July 23, 2014

… This report analyzes the Court’s decision in Hobby Lobby, including arguments made between the majority and dissent, to clarify the scope of the decision and potential impacts for future interpretation of RFRA’s applicability. It also examines potential legislative responses, should Congress consider addressing the current applicability of RFRA. Finally, the report addresses the decision’s effect on requirements that employers offer contraceptive coverage in group health plans under federal or state law. …

Navigating the Minefields of the Patient Protection and Affordable Care Act

Source: Kevin J. Smith, Employment Relations Today, Vol 41 Issue 2, Summer 2014
(subscription required)

Over four years ago, on March 23, 20 10, the Patient Protection and Affordable Care Act was signed into law by President Obama. The stated purpose of the Act is to improve the availability, quality, and affordability of health insurance coverage in the United States. An important part of the Act is to attempt to reform employment-based health insurance coverage. The Act contains several provisions to “encourage employer sponsored health coverage, including an employer mandate for insurance, an employer penalty for not providing health insurance, a tax credit to increase the affordability of health care for small firms, and a small-business health insurance exchange designed to increase plan options and lower plan costs. As a result, employers seem to be taking the brunt of the effects of the Act. Moreover, various parts of the Act were supposed to go into effect already, while others are supposed to go into effect in the future, by design, or because of delays in enforcement. Whatever the reason for the delays, they have caused considerable uncertainty for employers. As a result, some employers may make decisions that have unintended consequences, or, if they are not careful, cause them to violate the Act and pay exorbitant penalties. …

Pensionomics 2014: Measuring the Economic Impact of DB Pension Expenditures

Source: Nari Rhee, National Institute on Retirement Security, July 2014

From the summary:
A new national economic impact study finds that DB pension benefits have a significant economic impact: 6.2 million American jobs and $943 billion in economic output. The analysis finds that the benefits provided by state and local government pension plans have a sizable impact that ripples through every state and industry across the nation.

Pensionomics 2014: Measuring the Economic Impact of DB Pension Expenditures finds that expenditures made from public, private, and federal government pension benefits in 2012:
∙ Had a total economic impact of more than $943 billion.
∙ Supported 6.2 million American jobs that paid nearly $307 billion in labor income to American workers.
∙ Supported more than $135 billion in federal, state, local tax revenue.
∙ Had large multiplier effects. For every dollar paid out in pension benefits, $1.98 in total economic output was supported. For every taxpayer dollar contributed to state and local pensions $8.06 in total output was supported.
∙ Had the largest employment impact on the food services, real estate, health care, and retail trade sectors.
∙ Paid nearly $477 billion in pension benefits to 24 million retired Americans and beneficiaries.
The report also analyzes the economic impact of state and local pensions in all 50 states and the District of Columbia. Click through the image below to see state-by-state data.
Press release
State Fact Sheets/Map

Survey of Non-Group Health Insurance Enrollees

Source: Liz Hamel and Mira Rao and Larry Levitt and Gary Claxton and Cynthia Cox and Karen Pollitz and Mollyann Brodie, Kaiser Family Foundation, June 19, 2014

From the summary:
January 1, 2014 marked the beginning of several provisions of the Affordable Care Act (ACA) making significant changes to the non-group insurance market, including new rules for insurers regarding who they must cover and what they can charge, along with the opening of new Health Insurance Marketplaces (also known as “Exchanges”) and the availability of premium and cost-sharing subsidies for individuals with low to moderate incomes. Data from the Department of Health and Human Services and others provide some insight into how many people purchased insurance using the new Marketplaces and the types of plans they picked, but much remains unknown about changes to the non-group market as a whole.

The Kaiser Family Foundation Survey of Non-Group Health Insurance Enrollees is the first in a series of surveys taking a closer look at the entire non-group market. This first survey was conducted from early April to early May 2014, after the close of the first ACA open enrollment period. It reports the views and experience of all non-group enrollees, including those with coverage obtained both inside and outside the Exchanges, and those who were uninsured prior to the ACA as well as those who had a previous source of coverage (non-group or otherwise)….
• The ACA motivated many non-group enrollees to get coverage, and nearly six in ten Exchange enrollees were previously uninsured ….
• Enrollees in ACA-compliant plans report somewhat worse health than those in pre-ACA plans ….
• Majority gives positive ratings to their new insurance plans and says they are a good value, though four in ten find it difficult to afford their monthly premium ….
• Among plan switchers, as many report paying less as paying more for their new plans, but survey shows some signs of a trend toward narrower provider networks ….
• Plan switchers are less likely to be satisfied with plan costs, maybe because half of them report having their previous plan cancelled ….
• Half got help with enrollment; most say the shopping process was easy, but a third say it was difficult to set up a Marketplace account ….
• In the non-group market, those most likely to feel they have benefited from the ACA are people getting subsidies, those most likely to feel negatively impacted are those who had their plans cancelled ….