Is it Time for Employers to Move Away From the Traditional Ways of Providing Employee Benefits?  November 3, 2004 Agenda The Environment The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics Agenda The Environment Medical Trends Legislation Marketplace Changes Population Demographics Employer Outlook The Catch-22 Paths Away from Traditional Delivery: Two Camps Opportunities Along Path 2 The Answer Additional Topics Double-Digit Increase for Second Year in a RowPer employee costs in excess of $5,600 per year Annual CPI Trend U.S. health care costs rise, despite continuing economic recession Comparison of Overall Growth  Cumulative medical care CPI 89% greater than overall CPI since 1967 Employers’ Cost Increases Out-Pace Other Indicators Largest increase since 1990 (all employers) Aggregate Health Care Spending (1980 – 2010)  Government portion of payments increasing; total projected to be over $2 trillion by 2009 Medical Trends Pop Quiz How many years will it take gross medical costs to double, assuming no specific employer interventions or national health care? 10 or more 9 8 7 6 5 or fewer Medical TrendsResponses from a group of 25 actuaries who had time to get their calculators Legislation Medicare Prescription Drugs If made into law, will have major impact on retiree benefits and strategies Initial confusion aside, should have positive impact on retiree plans Expect cost shifting to negatively impact active plans EEOC Proposed changes in ADEA regulations Cline vs. General Dynamics Wells Fargo case Appears to allow pre-funding (and tax-deductibility) of entire retiree liability an ILP approach won’t be exactly same number as FAS liability funding in years 2+ would be limited to service cost IRS weighing its options  Proposals to Increase Coverage Among Early RetireesFew government programs except for financially indigent COBRA extensions and/or Medicare buy-ins Prohibitions on post-retirement benefit reductions Expanded pre-funding for retiree medical ADEA IssuesImpact on retiree medical coverage Age Discrimination in Employment Act (ADEA) prohibits discrimination against persons age 40 or older in terms and conditions of employment Age-based distinctions in employee benefit plans are permissible only if: A specific statutory exception applies, or Equal benefit/equal cost test is satisfied Plan must provide equal benefits for older and younger workers, or Plan must incur equal costs for older and younger workers Third and Sixth Circuit Courts reach different conclusions EEOC reviewing ADEA regulations Marketplace ChangesConsolidation of Major Health Care Carriers Employer options are greatly reduced, carriers have more clout Marketplace Changes  PBM consolidation continues; three major national PBMs remain Population TrendsAging baby boomers will increase the elderly and near elderly populations Negative Tidal Wave of Available Talent Pool of “prime workers” will be decreasing  Impact of Demographics on Health Care Cost Cost increases wi

美国保险业协会做的HR分析报告.ppt