Health Risk Management: Well-Being for the Employee and the Bottom Line
by Camille Haltom
For most employers, a small percent of the employee/participant population accounts for a large percent of health care costs. However, the population of this high-cost group changes from year to year. The fundamental problem is keeping employees out of the high-risk/high-cost segment, something plan design changes cannot address but that integrated health risk management (IHRM) can help achieve. This article explains how employers can implement an IHRM program to significantly lower health care costs to a degree unattainable through traditional cost-control strategies, while simultaneously raising workers' productivity and well-being.
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Population Health Improvement—The Next Era of the Health Care Management Evolution
by Stephanie Pronk
The trend of increasing health care costs over the past several years shows no signs of slowing down. While employers have attempted to address the issue with various cost-shifting and cost-sharing initiatives to relieve the burden, those attempts have often fallen short. In today's fiscally scrutinized benefits environment, the emphasis needs to be more strategic. The management of employee health and productivity needs to move to a more encompassing organizational view that addresses the most expensive drivers of these costs head-on, with prevention, education and employee responsibility as key tenets. Organizations that make the move—by implementing programs to maintain, improve and manage their population's health—will enjoy substantial cost savings and enhanced employee productivity.
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2005—A Pivotal Year for Managing Retiree Medical Benefit Costs
by Ron Fontanetta
With Medicare set to begin offering a prescription drug benefit in 2006, employers that provide medical coverage to retirees aged 65 and older have a unique opportunity to redefine their programs and financial commitments for the long term. The new Medicare Part D drug benefit poses a range of alternatives for employers to consider—from eliminating post-65 drug benefits altogether to maintaining or modifying their current programs to qualify for the 28% federal tax subsidy for eligible drug costs. In deciding on a course of action, companies need to consider a host of complex issues, including workforce needs and demographics, employee relations, plan design and administration—in addition to the long-term financial and accounting implications. This article reviews the alternatives available to employers with the advent of Medicare Part D and highlights some of the key factors employers should consider as part of this decision.
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Are Employers Pursuing Value-Based Purchasing?
by Vittorio Maio, Christine W. Hartmann, Neil I. Goldfarb, Adam R. Roumm and David B. Nash
Some employers have begun to undertake a variety of initiatives, collectively termed value-based purchasing (VBP), which aim at factoring quality into the purchasing decision-making process when negotiating costs with providers and insurers. There is evidence that the VBP movement has begun gaining momentum; yet it is unclear whether employers are firmly committed to VBP principles. By surveying a national sample of employers, this study investigates the extent to which employers are currently engaged in VBP activities and also increases our understanding of barriers hampering the broader implementation of these activities.
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The American Jobs Creation Act and Its Impact on Deferred Compensation: Reassessment From a Business Perspective
by David G. Johnson
The American Jobs Creation Act (AJCA), which was signed into law in October 2004, will have an impact on almost every deferred compensation program in the United States. This article argues that as companies continue to evaluate the transition alternatives under AJCA and contemplate the necessary changes to the plan program, companies also should consider simultaneously addressing broader issues surrounding nonqualified deferred compensation arrangements. These include ongoing business purpose, financial planning considerations, education of participants, corporate governance considerations and the potential implications to international assignees.
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Women's Issues in Individual Social Security Accounts: Chile, Australia and the United Kingdom
by Sophie M. Korczyk
The United States has frequently been exhorted to examine the “success” of individual Social Security account plans in several countries, including Chile, Australia and the United Kingdom. This article takes up that challenge, with special attention to the needs of women. Because none of the systems has yet produced a cohort of retirees entirely dependent on these accounts for retirement income, assessments of their effect on women depend on projections and assumptions. With this in mind, the author concludes that, without substantial changes in both attitudes and behavior, many women will find it harder to accumulate adequate retirement income through individual accounts than they would in a traditional social insurance program.
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Society's Insurance: One Actuary's Perspective on Strengthening Our National Retirement System
by William A. Dreher
President Bush states Social Security is in crisis and the solution is cutting the benefits of future retirees while diverting a large share of future Social Security taxes into individual accounts. This article examines the Bush proposals and finds that personal investment accounts, in their guise as Social Security reform, are not an effective substitute for the guaranteed life incomes provided by Social Security. The author argues that Americans need to expand their search for ways to create and sustain confident expectations that all workers will have a solid economic platform in their retirement years. Possible approaches include, among others, changes to private pensions, the tax treatment of retirement account distributions, and the current Social Security program.
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