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Happy New Year! Senior Star 1st Quarter 2012

2012 Medicare Premiums, Deductibles and Coinsurance

“The standard monthly Part B premium and deductible will both decrease by just over 13 percent. This is a dramatic change from between 2010 and 2011 when they both increased by slightly more than 4 percent . . . .” (The Segal Company)

VEBA Cuts Health Care Costs for Retirees

“Thousands of retirees from auto parts manufacturers that abandoned their pension plans will be able to get health care coverage through a groundbreaking arrangement that will use a special trust to tap federal premium subsidies.” (Business Insurance)

ADEA Exemption for Coordination of Health Benefits with Medicare Does Not Permit Employer To Terminate Current Employees’ Benefits

“The ADEA provisions notwithstanding, Medicare law requires that employers who are subject to the Medicare as secondary payer (MSP) rules provide the same group health plan coverage to workers and their dependents who have Medicare coverage as they provide for other workers and their dependents who are not Medicare-covered.” (Wolters Kluwer Law & Business / CCH)

Retired California Public Workers Can Count on Promised Benefits, Court Says

“Health benefits for government retirees may not be eliminated if state andlocal governments had clearly promised workers those benefits, the California Supreme Court ruled in an Orange County case . . . .” (Los Angeles Times)

Cutting Retiree Benefits a Sore Subject for Military

“Military retiree benefits cost the Pentagon $50 bil.lion a year. . . . There are 1.9 mil.lion military retirees drawing pay and benefits, compared to 1.5 mil.lion in the active duty force. In 2010, then-Defense Secretary Robert Gates said those costs are ‘eating the Defense Department alive.'” (NPR)

New York unions sue over retiree health care change

ALBANY, N.Y. (Reuters)—Seven New York state unions filed federal lawsuits on Wednesday seeking to prevent Gov. Andrew Cuomo from increasing the amount that retired workers pay for health care.

Senior Star 3rd Quarter 2011

Health Insurance for Active and Retired City Employees: Asheville, Denver, and Oklahoma City (PDF) 10/02/2011

Although all three cities offer retiree health care benefits and require retirees who are eligible for Medicare to enroll, only one city has begun to prefund retiree health obligations. The other two cities pay for retiree health on a pay-as-you-go basis, typical of American local governments.

St. Louis Post-Dispatch Faces Second Suit over Retiree Health Benefits


According to the Riverfront Times, the CWA Local 14620, also known as the St. Louis Mailers Union No. 3, represents the 220 employees who work in the mailroom, as well as retirees . . . . It filed suit in an attempt to force the company to resume providing healthcare for the 22 retirees who were kicked off the company’s plan in March.

Measuring the Cost Impact of Changes to Government Retiree OPEB Before Contracts Are Signed


In the corporate world, it is almost unheard of for employers to adjust their retiree benefit promises without first measuring the cost impact. This is especially true of collectively-bargained pension and retiree health plans. Both sides hire an actuary to estimate the cost of these benefits and bring their numbers to the table.

Employers Adjust Retiree Drug Plans As Tax Break Ends


The value of the tax break has been significant. ‘For corporate America, this makes a world of difference,’ said Michael S. Jacobs, national clinical practice leader at Buck Consultants L.L.C. in Atlanta. If a company receives a $500 per retiree subsidy for providing prescription drug coverage to a retiree, the subsidy’s tax-free status makes it equivalent to $1,500, he said.

Top Reasons to Change Your GASB 45 Valuation Schedule


GASB 45 requires a complete actuarial valuation of public retiree health plans to be completed every 2 to 3 years (depending on number of plan members), and sponsors usually don’t look forward to the administrative hassles of their next study. However, there are several situations where a new valuation could be advantageous and, likely, mandatory.

Senior Star 2nd Quarter 2011

Aon Hewitt Report Shows Potential Impact of Health Care Reform on Retiree Medical Programs

Excerpt: LINCOLNSHIRE, Ill., April 20, 2011 — Most large employers are now beginning to rethink their retiree health care strategy as a result of federal health care reform, according to a recent report by Aon Hewitt, the global human resource consulting and outsourcing business of Aon Corporation (NYSE: AON).
In late 2010, Aon Hewitt surveyed 344 companies, representing 2.2 million retirees nationwide, and found that 61 percent were either already evaluating or were expected to evaluate their long-term retiree medical strategy by the end of 2011, due to health care reform. Meanwhile, 23 percent of respondents indicated they were still considering whether to assess their current strategy and only 16 percent had no immediate plans to review their current approach.

CMS Announces Indexed Medicare Part D Amounts for 2012

Excerpt: On April 4, 2011, the Centers for Medicare & Medicaid Services (CMS) announced the indexed Medicare Part D standard benefit and Retiree Drug Subsidy (RDS) amounts for 2012.1 This Capital Checkup features charts comparing the 2012 numbers to the 2011 numbers.
The Medicare Modernization Act (MMA) requires CMS to announce indexed Medicare Part D standard defined benefit amounts each year that reflect the increase in drug costs. In 2012, the Medicare Part D standard defined benefit amounts will increase by 3.34 percent, a rate that is based on drug cost trend of 4.67 percent in 2011 (almost the same trend as one year earlier: 4.63 percent), adjusted by CMS for prior year revisions.

Factbox: States’ Underfunding Of Retiree Health Benefits

Excerpt: (Reuters) – Many states cannot afford to cover promises made to their future retirees, with the Pew Center on the States reporting on Tuesday that there is a $1.26 trillion gap between what they have pledged to pay and the amount they have set aside. Nearly half of that amount, $604 billion, is for healthcare and other benefits not included in pensions, such as life insurance.


Seniors Not Getting Important Preventive Health Services Too few getting recommended vaccines and screening for cancer, diabetes and osteoporosis, report warns

Excerpt: TUESDAY, March 15 (HealthDay News) — Many Americans aged 65 and older are not receiving potentially lifesaving preventive health services, says a new report by several U.S. Department of Health and Human Services agencies. Too few seniors are getting recommended vaccinations for influenza and pneumococcal disease, including bloodstream infections, meningitis and pneumonia; help with quitting smoking; or screenings for breast cancer, colorectal cancer, diabetes, high cholesterol and osteoporosis, according to the report released March 14.


‘Common sense’ bill would change Medicare requirement

Excerpt: A bill to cover seniors’ need for skilled nursing care following an observational stay at a hospital is making its way through Congress. The bipartisan legislation, entitled the Improving Access to Medicare Coverage Act of 2011, is being praised by provider groups, such as the American Health Care Association.


Medicare Reform’s OPEB Side Effects Public employers need preemptive cost-control strategies.

Excerpt: Last week the U.S. House majority leaders announced a sweeping $6 trillion strategy to reduce the federal budget deficits structurally. State and local officials are largely focused on the immediate impact on intergovernmental assistance programs and the Medicaid program. They should also pay attention to the hidden impact that Medicare reforms would have on their retiree medical benefits plans (or “OPEB” for other post-employment benefits).

Medicare’s Drug Coverage Gap to Shrink Away Under Health Care Reform
Experts say changes kick in this year, with the ‘donut hole’ disappearing by 2020

Excerpt: Starting this year, Medicare Part D’s widely despised “donut hole” — the gap in drug cost coverage enrollees encounter when they reach a certain spending threshold — will start to disappear, one result of the health care reform package enacted last year, experts say.


Sweeping Changes Could Slash Generous Retirement Benefits

Some articles the staff at Benistar think you should read:

New York Faces $200 Billion in Retiree Health Costs

Excerpt: “The daunting size of the health care obligation raises the possibility that localities will be forced at some point to choose between paying their retirees’ medical costs and paying the investors who hold their bonds. Government officials aim to satisfy both groups, and have even made painful cuts in local services when necessary to keep up with both sets of payments.”

(The New York Times; free registration required)

New Ways to Manage Retiree Benefits

Excerpt: “Milliman offers a four-step strategy for managing GASB 45 sticker shock.” (Milliman)

Sweeping Changes Could Slash Generous Retirement Benefits of Former Cincinnati City Employees and Future Retirees

Excerpt: “With the troubled city retirement system struggling to dig out of a $1 billion-plus long-term hole, a new pension board – one on which outside financial experts recently replaced city officials with personal stakes in the decisions – is reviewing changes to lower benefits, raise retirement ages and cap pensions well below the current 90 percent-of-salary ceiling.”

Maryland Panel Recommends Sweeping Retirement Benefit Changes for Public Employees

Excerpt: “Maryland state workers would have to work for 15 years instead of the current five to become eligible for pension or retiree health care benefits, according to new recommendations from a study panel. An Associated Press news report said the Public Employees’ & Retirees’ Benefit Sustainability Commission is also recommending that state employees would have to spend 25 years working for the state, instead of 16 years, to receive the maximum retiree health care premium subsidy and put in 10 years instead of five to become pension vested.” (PLANSPONSOR.COM)

Retirement Benefits Helping Employers Attract and Retain New Workers, Towers Watson Survey …

Retirement benefits — especially defined benefit (DB) programs — are giving employers an added advantage when it comes to attracting and retaining new […]


“The past cannot be changed. The future is yet in your power.”

Mary Pickford

Health Care Reform Drug Subsidy Deduction

3rd Quarter 2010
Some articles the staff at Benistar think you should read:

AARP Says Brand-Name Drug Prices Up 8% in 2009
Excerpt: “Over the last five years, according to the report . . ., the retail prices for the most popular brand-name drugs increased 41.5 percent, while the consumer price index rose 13.3 percent.”
(The New York Times; free registration required)

Health Care Reform: Elimination of Retiree Drug Subsidy Deduction
Employers that provide retiree prescription drug coverage should analyze the increased future tax liability and the current accounting charges necessary to retain retiree prescription drug coverage, and evaluate the practical and legal risks of eliminating this benefit.

N.Y. Faces $200 Billion in Retiree Health Costs
The cities, counties and authorities of New York have promised more than $200 billion worth of health benefits to their retirees while setting aside almost nothing, putting the public work force on a collision course with the taxpayers who are expected to foot the bill.

Medicare actuary: Reform will cost some seniors
A Medicare official concedes that seniors may have to dig deeper into their wallets next year thanks to the health care law.

Dealing with Medicare Part B and COBRA CoverageGenerally, the Socal Security Act provides that individuals may enroll in Medicare Part B (which covers doctors visits and other outpatient services) when they reach age 65. If they fail to do so during a seven-month initial enrollment period surrounding their 65th birthday,


2nd Quarter 2010

Group Health Insurance Rates on the Rise, According to Survey
Excerpt: “Group health insurance rates for small and midsize employers are surging for 2011 renewals, according to a survey by the Council of Insurance Agents & Brokers.”

Seniors in Medicare Drug Plans see drop.

(Business Insurance)
Sixth Circuit Holds That Cap Limits Retiree Health Care Contributions
Excerpt: “The matter in dispute was whether the caps on retiree health care contributions in the agreements continue to apply to 1993-2004 retirees, even after the close of the years covered by the agreements, and after the related CBAs expire. The Court interpreted the agreements to provide for lifetime, capped health care contributions, saying that this interpretation . . . ”
(Stanley D. Baum of Fellheimer & Eichen LLP)

Retiree-Only Plans Could Be Exempt from Health Reform Rules
Excerpt: “[According to draft regulations prepared by the Internal Revenue Service and the departments of Labor and Health and Human Services,] the exemption, if finalized, would mean retiree-only health care plans would not have to comply with . . . health care reform law requirements banning lifetime dollar limits and that coverage be extended to adult children up to age 26.”
(Business Insurance)


Benistar featured in the News

The following article about Benistar appeared in the Stamford Advocate: The Stamford Branch of a national employee health and welfare benefits administrator has moved within the city and is in the process of hiring more staff.

Retiree Medical Solutions

• No networks
• No Referrals
• Guaranteed Issue
• Coverage for Spouses
• Portablitly
• Affordable
• Electronic Claims

3rd Quarter 2009

Emergency Retiree Health Benefits Protection Act Reintroduced

Excerpt: “Representative John Tierney (D-Mass.) has reintroduced the Emergency Retiree Health Benefits Protection Act (H.R. 1322), which would prevent employers from reducing or eliminating health benefits for retirees or their dependents. The bill has been around for years but has attracted more attention since it appeared in a pension bill last year. Under the act, employers could not make changes to their retiree health plans that would eliminate, reduce or limit benefits, increase out-of-pocket costs or make it more difficult to obtain medical care.” (Watson Wyatt Worldwide)

GASB Issues Guidance on Multi-Employer OPEB Plans
Excerpt: “The Governmental Accounting Standards Board (GASB) has issued an exposure draft of a proposed statement that addresses issues related to the use of the alternative measurement method and the frequency and timing of measurements by employers that participate in agent multiple-employer other postemployment benefit (OPEB) plans. The proposed Statement would amend paragraphs 33 – 35 of Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, to permit an agent employer that has an individual-employer OPEB plan with fewer than 100 total plan members to use the alternative measurement method, at its option, regardless of the number of total plan members in the agent multiple-employer OPEB plan in which it participates.” (; free registration required)

Medicare Part D Update :  Lessons Learned and Unfinished Business
Excerpt: “Enacted in 2003, Medicare’s Part D prescription drug benefit reflected an unprecedented and controversial new approach for Medicare, relying exclusively on private plans to provide health coverage and including an unusual gap in coverage. This analysis by Kaiser researchers examines in detail how the new model has worked since its launch almost four years ago. Published as an article in today’s New England Journal of Medicine, the analysis by Kaiser vice president Patricia Neuman and principal policy analyst Juliette Cubanski assesses the evidence related to key policy questions arising from the Part D benefit. It also briefly discusses a number of potential policy changes to the Part D benefit that could arise as Congress and the Obama Administration weigh the program’s future.” (Kaiser Family


Medicare Prescription Benefit Program Has Exceeded Expectations
RAND Corporation

Deadline for Medicare Part D Creditable Coverage Notices Approaches (PDF)
2 pages. Excerpt: “Medicare Part D notices of creditable or non-creditable coverage must be provided to Medicare-eligible individuals prior to November 15 of each year. Many employers satisfy this requirement by including the notice in enrollment materials or in separate mailings in the fall. In preparing materials for distribution this fall, employers should be aware of revised model notices provided by the Centers for Medicare & Medicaid Services (CMS).” (Buck Consultants)

Articles courtesy of:,,,,,,,,,,,,,,

“You can’t stay in your corner of the forest waiting for  others to come to you.  You have to go to them sometimes.”

2nd Quarter 2009

Final FASB Disclosure of More Asset Classes Held in Pension and Postretirement Benefit Plans
Excerpt: “The Financial Accounting Standards Board (FASB) on December 30, 2008, finalized revisions to FASB Statement # 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits. The revisions are effective for fiscal years ending after December 15, 2009, and are found in

Quote of the Quarter: “If you wait for   opportunities to  occur, you will be one of the crowd.”

Edward de Bono, Psychiatrist & Author

Expert discusses Medicare coverage.  In the Wall Street Journal (2/21) Ask Encore column, Kelly Greene wrote that, according to Paul Precht, policy director for the nonprofit Medicare Rights Center in Washington, older Americans “must sign up for Medicare Part B any time in a seven-month window — three months before” their “65th birthday, the month” of their “birthday, or three months after — to avoid future penalties.” He noted that “there are a few exceptions in which people with retiree health coverage mightn’t have to sign up for Part B, including if you have health insurance from an HMO under the Federal Employees Health Benefit Program.” When people “have retiree health-insurance coverage, it generally kicks in after Medicare parts A and B. .. Retiree health coverage may help pay for Medicare costs, or for things that Medicare doesn’t cover.” Nevertheless, retirees “need to enroll in Part A and B to have full insurance coverage. Many retiree policies require” that people “sign up for parts A and B, anyway, so it is important to check that with…former employers.” Meanwhile, retirees “can skip Medicare Part D, which provides drug coverage, if’ they “have coverage through an ex-employer that’s good or better than Medicare’s.”

Indexed Medicare Part D Amounts for 2010
Excerpt: “The Centers for Medicare & Medicaid Services (CMS) has announced the indexed Medicare Part D standard benefit and Retiree Drug Subsidy (RDS) amounts for 2010. This Capital Checkup features charts comparing the 2010 numbers and the 2009 numbers.” (The Segal Group, Inc.\

Options to Remove Liabilities for High Retiree Medical Costs from a Company’s Balance Sheet: VEBAs (PDF)
2 pages. Excerpt: “The creation and structuring of the VEBA must fulfill a number of legal requirements all of which are normally manageable. Depending upon how the retiree medical VEBA is to be funded, there are a number of other approvals that may be required and SEC filings that must be made for companies with registered securities if the settlement agreement is a ‘material agreement.’ Further, the VEBA will allow for different accounting treatments of the change. If the company has securities registered with the Securities Exchange Commission, the company’s accounting treatment can be verified by obtaining approval of the proposed accounting treatment through the office of the Chief Accountant at the SEC and the appropriate Counsel’s office.” (Haynes & Boone)

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