Category Archives: Benefits

Social Insurance: A Critical Base for Financing Long-Term Services and Supports

Source: Lee Goldberg and G. Lawrence Atkins, SCAN Foundation, March 2013

This series summarizes current issues in financing long-term care and outlines policy options for increasing affordable access to services….

…The challenge is to address the needs of the large group in the middle of the income distribution that faces a significant gap between the resources required to maintain their quality of life and what they can actually afford at the time they need care. … The issue with LTSS is not whether there should be government funding. In 2010, the federal government and the states spent more than $200 billion on LTSS, primarily through Medicaid. The state and federal partnership is a critical lifeline for millions of low-income people who cannot afford the LTSS they need, but it is only available after an individual becomes impoverished. Absent is a universally available insurance-based approach that would spread the financial risk of developing and living with a chronic illness or disability. Reform of our LTSS system may be on the horizon simply because the status quo will be increasingly difficult for governments to manage, especially state governments….
See also:
Shaping Affordable Pathways for Aging with Dignity: Current Issues and Potential Solutions for Addressing America’s Long-Term Care Financing Crisis
Overview of Current Long-Term Care Financing Options
Size of the Employer and Self-Employed Markets Without Access to Long-Term Care Coverage Options
Medicaid Spend Down: Implications for Long-Term Services and Supports and Aging Policy
RTI International: Medicaid Spend Down: New Estimates and Implications for Long-Term Services and Supports Financing Reform
Avalere: Insuring Americans for Long-Term Services and Supports: Challenges and Limitations of Voluntary Insurance
Why Long-Term Care for U.S. Seniors is Headed for ‘Crisis’
Source: Betty Ann Bowser, PBS Newshour, March 20, 2013

FMLA and Adult Children: New DOL Interpretation

Source: Maureen Minehan, Employment Alert, Vol. 30 no. 4, February 25, 2013
(subscription required)

You have an employee with a 30-year-old who daughter just gave birth to her first child. The daughter is struggling with postpartum depression and your employee wants to take leave under the Family and Medical Leave Act (FMLA) to be with her. It’s not a good time for you to be shorthanded. Do you really need to grant permission for your employee to take care of her adult daughter? A new “Administrator’s Interpretation” released by the U.s. Department of Labor (DOL) on January 14th aims to make the answer clearer to employers. …The expanded definition of disability under the ADAAA means more employees will qualify for FMLA leave to care for adult children… In cases where employers believe employees don’t qualify, employers need to be ready to defend their decisions…

Reforming Public Pay and Benefits

Source: Thom Reilly, State and Local Government Review, Vol. 45 no. 1, March 2013
(subscription required)

From the abstract:
State and local governments are grappling with huge unfunded liability costs centered on public sector pensions and other postretirement benefits (OPEBs). Payments to cover these liabilities are crowding out revenues for essential public services. The policies and practices that determine public sector pay and benefits have become a significant part of the national conversation in the United States and Europe. This article provides commentary and a summary of a book addressing this topic: Rethinking Public Sector Compensation: What Ever Happened To The Public Interest? Recent national reforms on public pay and benefits are documented as well as the subsequent legal challenges that have emerged in several jurisdictions. The article conclusion is that it is imperative that these unfunded liabilities be addressed in a timely, comprehensive and fair manner, and that public sector compensation must be sustainable and reflect the reality of a new emerging workforce. However, the outcome from current litigation in several states will either significantly expand or restrict the ability to manage these public retirement plans.

The Wage–Health Insurance Trade-off and Worker Selection: Evidence From the Medical Expenditure Panel Survey 1997 to 2006

Source: Stéphanie Lluis and Jean Abraham, Industrial Relations: A Journal of Economy and Society, Volume 52, Issue 2, April 2013
(subscription required)

From the abstract:
Key provisions within healthcare reform will likely further increase the cost of employer-sponsored insurance. Theory suggests that workers pay for their health insurance through a wage offset. We investigate this issue using data from the Medical Expenditure Panel Survey. GMM estimates aimed at correcting for endogenous worker mobility reveal evidence of a trade-off for workers who are offered health insurance as the only fringe benefit. On the other hand, employees in establishments with a more comprehensive set of benefits enjoy higher wages relative to employees in establishments that offer no benefits. Health also affects the wage–health insurance trade-off.

Trends in 401(k) Plans and Retirement Rewards

Source: WorldatWork and the American Benefits Institute, March 2013

From the press release:
Even through volatile economic conditions, employers have demonstrated an unwavering commitment to the 401(k) system according to a study released today by WorldatWork, a global HR association, in partnership with the American Benefits Institute, the research and education affiliate of the American Benefits Council. Despite anecdotal reports of companies suspending or eliminating their 401(k) match to cut costs during the depths of the recession, 88% of respondents said their company maintained matching contributions during the previous five years.

The 2013 Trends in 401(k) Plans and Retirement Rewards survey of 476 American Benefits Council and WorldatWork member companies provides a snapshot of defined contribution plan activity at major American companies. The report summarizes findings on participation and contribution rates, plan design and withdrawal activity. The 2013 Study is a continuation of a survey released first in 2002 and most recently in 2009….

Key Findings:
– For more than three-quarters (77%) of surveyed companies, there has been no change in the 401(k) matching formula during the past 12 months, nor are they currently considering a change in the near future.
– In 2012, for companies providing investment advice services to employees, 67% reported that advice is provided through an independent adviser. This is a significant increase from the 47% who reported using an independent adviser to provide investment advice in 2008.
– A strong majority (73%) of companies in the survey reported that 70% or more of their eligible employees currently participate in their organization’s 401(k) plan.
– Compared to 2008, fewer employees are now taking hardship distributions and loans from their 401(k) plans.

Paid Sick Days

Source: Institute for Women’s Policy Research, 2013

The Institute for Women’s Policy Research recently released several publications about the value of paid sick days.
Publications include:
Valuing Good Health in Portland: The Costs and Benefits of Earned Sick Days
by Claudia Williams, Institute for Women’s Policy Research, Briefing Paper, IWPR #B317, March 2013

Testimony Before the Public Health and Human Services Committee of the Philadelphia City Council regarding Bill 130004, Promoting Healthy Families and Workplaces
by Claudia Williams, Institute for Women’s Policy Research, IWPR #B316, March 2013

Testimony on SB 698: Maryland Earned Sick and Safe Leave Act
by Claudia Williams, Institute for Women’s Policy Research, IWPR #B315, February 2013

Access to Earned Sick Days in Maryland
by Institute for Women’s Policy Research, Briefing Paper, IWPR #313, February 2013

Valuing Good Health in Maryland: The Costs and Benefits of Earned Sick Days
by Claudia Williams, Institute for Women’s Policy Research, Briefing Paper, IWPR #B311, February 2013

Valuing Good Health in Philadelphia: The Costs and Benefits of Paid Sick Days
by Claudia Williams, Institute for Women’s Policy Research, Briefing Paper, IWPR #B309, January 2013
Portland Wins Sick Day and Everybody Benefits
Source: Jodie Levin-Epstein, Center for Law and Social Policy, March 13, 2013

Portland City Council Passes Sick Days, Portland Becomes Fourth City With Sick Days Law – Philadelphia City Council Vote Expected Thursday, Hearing in NYC Approaches, Legislatures in Washington State, Vermont, Massachusetts Move Bills Forward
Source: Family Values at Work, March 2013

Philadelphia City Council Passes Earned Sick Days

Source: Family Values at Work, Press Release, March 14, 2013

Public Pension Underfunding in California: A Perfect Storm Likely to Sweep the Nation

Source: John G. Kilgour, Compensation Benefits Review, vol. 44 no. 6, November/December 2012
(subscription required)

From the abstract:
As is widely known, public sector pension plans and state and local governments throughout the country are in trouble. Things are about to get worse. The Governmental Accounting Standards Board has adopted new accounting and reporting rules that will make underfunded plans of governments appear to be much more underfunded than under the current rules. The changes involve discount rates, amortization periods, asset valuation and a requirement that local governments that are party to cost-sharing multiple-employer plans report their proportionate share of the plan’s unfunded liability in their financial statements. In a parallel development, Moody’s Investor Services (one of the major credit rating agencies) is about to launch similar changes. The combined effect will be to add significantly to the debt of many local governments and likely force them into Chapter 9 bankruptcy. California is on the cutting edge of this development, with three sizable cities already in Chapter 9. This article will focus on California; however, the developments discussed apply to public pension plans and local governments nationwide.

Navigating the Changing Landscape of Retirement: What Plan Sponsors and Employees Need to Do to Achieve Retirement Security

Source: Chris Augelli, Compensation Benefits Review, vol. 44 no. 6, November/December 2012
(subscription required)

From the abstract:
Recent studies show that Americans are less confident than ever in their ability to achieve financial security in retirement. According to the Employee Benefit Research Institute, just 14% of survey respondents think they will have enough money to live comfortably in retirement. This article describes the challenges Americans face in saving for retirement and the steps plan sponsors and employees should take to achieve financial security in retirement.

Retiree Out-of-Pocket Healthcare Spending: A Study of Consumer Expectations and Policy Implications

Source: Allison K. Hoffman, Howell E. Jackson, American Journal of Law and Medicine, Vol. 39, No. 1, 2013

From the abstract:
Even though most American retirees benefit from Medicare coverage, a mounting body of research predicts that many will face large and increasing out-of-pocket expenditures for healthcare costs in retirement and that many already struggle to finance these costs. It is unclear, however, whether the general population understands the likely magnitude of these out-of-pocket expenditures well enough to plan for them effectively. This study is the first comprehensive examination of Americans’ expectations regarding their out-of-pocket spending on healthcare in retirement. We surveyed over 1700 near retirees and retirees to assess their expectations regarding their own spending and then compared their responses to experts’ estimates. Our main findings are twofold. First, overall expectations of out-of-pocket spending are mixed. While a significant proportion of respondents estimated out-of-pocket costs in retirement at or above expert estimates of what the typical retiree will spend, a disproportionate number estimated their future spending substantially below what experts view as likely. Estimates by members of some demographic subgroups, including women and younger respondents, deviated relatively further from the experts’ estimates. Second, respondents consistently misjudged spending uncertainty. In particular, respondents significantly underestimated how much individual health experience and changes in government policy can affect individual out-of-pocket spending. We discuss possible policy responses, including efforts to improve financial planning and ways to reduce unanticipated financial risk through reform of health insurance regulation.

Pension Plan Evolution – A New Financial Reality

Source: Ontario Teachers’ Pension Plan, 2013

From the summary:
The documentary takes a global look at how pension plans are changing to meet economic and demographic challenges ranging from volatile markets to increasing longevity. Interviews with leaders from around the world explore such important issues as pension plan sustainability, retirement security and generational equity. The documentary is supplemented with eight videos featuring interviews with senior executives at Teachers’ on challenges facing the pension plan as it grapples with recurring funding shortfalls.

See also:
Press release

Interviews with Leaders at Teachers’

videos include:
Funding Shortfalls
Risk and Sustainability
Plan Design Changes
Demographic Challenge
Intergenerational Equity
Investment Environment
Defined Benefit Strengths
Who Pays for Pensions