Mitigating the Excise Tax According to Aon Hewitt's survey, 84 percent of companies say they plan to make changes to their pre-65 retiree
strategies to mitigate the excise tax on high cost employer health plans when it goes into effect in 2018.
Cost trends for Medicare-eligible retirees
after plan changes (3.
By 2010, 32 percent of workers expected retiree
health benefits, while only 25 percent of early retirees
and 16 percent of Medicare-eligible retirees
had them, Fronstin says.
As the population is aging and the demand for services is growing, UnitedHealthcare's Connector Model allows employers to 'hand off' the plan administration burden while still offering meaningful retiree
plan choices without overwhelming the retiree
," says Funk.
because they were told they had to enroll in Medicare did so, and yet the city allowed them to remain on conventional plans.
could receive payments from both departments, but officials hope to synchronize the process to limit confusion for retirees
Nearly all employers that provide retiree
health benefits cover disabled retirees
and approximately 90 percent cover early retirees
According to this calculation, retiree
liabilities would be cut in half.
These steps allow a corporation to "catch up" and then to stay current with its retiree
health benefits obligations.
Faced with exploding health-care liability costs, many companies have launched plans to reduce, or even eliminate, their retiree
In December 1990, FASB approved FAS 106, which requires companies to record unfunded retiree
health liabilities on financial statements, effective for fiscal years beginning after December 15, 1992.
The requirement to recognize retiree
health care liabilities on financial statements has heightened awareness of the potential cost of providing these benefits.