How to Take Control of Your 401(k)
Originally posted August 27, 2013 by Scott Holsopple on https://money.usnews.com
A recent survey by Charles Schwab of 1,000 401(k) participants said that 52 percent of those polled find their 401(k) plan more confusing than their health insurance benefits. That's pretty impressive, given that I don't think I know anyone who claims to understand their medical coverage. Fifty-seven percent desired an easier way to choose their 401(k) investments.
Despite the bad press the 401(k) plan sometimes receives for its complexity and for requiring plan participants to become investors whether they want to or not, the fact remains that it is a great way to save for retirement. For many people, it's their only retirement savings vehicle. Sure, if you don't have much interest in investing and finance, you might find it confusing to manage your account — but it's up to you to do something about it.
Being a 401(k) plan participant requires you to take charge of your retirement saving and investing, so don't let confusion or uncertainties leave you on the sideline. Instead, here are five things you can do to step up:
- Embrace the power and control you have, and think hard about how to use it. Spend some time seriously thinking about your retirement saving and investing needs. Jump on some educational websites and do some reading to familiarize yourself with basic investing terminology and the types of investments to which you have access.
- Take action by creating a retirement saving and investing plan. Outline the amount you plan to contribute now and in the future in order to reach your retirement goals.
- Take advantage of your 401(k) plan's features. Many plans offer ways to maximize your participation such as an employer match, educational resources and advisory services that can help you pick the right funds to support your retirement goals.
- Check to see if your plan offers an auto-increase contribution feature, which automatically increases your contribution rate by a small amount each year (or more frequently, if you like). If your plan doesn't offer auto-increase set up calendar reminders and increase your contributions yourself. Either way, you need to save as much as you can and regular contribution increases can help you get there.
- Once you've established your strategy, stick to it. Paying too much attention to market fluctuations can cause some investors to run scared. A long-term view is what's needed, rather than concentrating on your account balance on any one day.
The 401(k) plan might not be perfect, but you stand to gain a lot when you take advantage of being in the driver's seat — just a little know-how can make a big difference when it comes to your 401(k) and financial future.
PPACA expected to aggravate job absences
Originally posted August 23, 2013 by Dan Cook on https://www.benefitspro.com
Under pressure to meet the basic requirements of the Patient Protection and Affordable Care Act, employers may be overlooking the law’s implications for employees’ attendance at work.
This observation comes from a survey of employers and insurance providers sponsored by the Disability Management Employer Coalition and Pacific Resources.
The researchers polled 169 benefits policy decision-makers in large organizations and 118 senior professionals in the insurance industry involved with absence management and disability issues. It asked a series of questions designed to measure their employers’ preparedness for the act’s full implementation, including whether they had thoughtfully considered how the reforms might change employee attendance at work and issues around worker disability.
Most have not, the researchers concluded. “While organizations may be prepared for the changes to health care and health insurance, most were not thinking about the impact of PPACA on disability and absence management,” the study said.
Another major finding: both employers and insurers surveyed anticipate “increased incidence and duration of long-term absences.”
Both employers and insurers tended to believe that employee absences will be more frequent and longer. The reason? With more Americans enjoying the benefits of health coverage, there will be longer waiting periods for access to care providers. This will be exacerbated, the report said, by the dwindling numbers of primary care physicians entering the profession.
“Most respondents believe access to routine care will change – 42 percent believe that the ability of employees to see a physician for routine care in a timely manner will get worse, while only 21 percent believe it will improve,” the study reported.
But when it came to questions about the act’s influence on disability issues, there was less clarity among respondents.
“There is more uncertainty about how PPACA will impact the number of disability claims, although those who feel knowledgeable enough to predict what will happen are more likely to believe the number of claims will rise due to employees no longer fearing a loss of health care coverage from a long-term absence,” the study said.
Overall, insurers took a more pessimistic view of the ways in which Obamacare might influence attendance and disability.
“Carriers are more likely than employers to think that PPACA will have an impact on absence and disability,” the study said. “A third of employers and a majority of carriers believe PPACA will increase the incidence and duration of absences and disability. However, many have not yet considered this aspect of the law, as a quarter are not sure what will happen to absence and disability outcomes.”
Time’s running out to start a new Safe Harbor 401(k) plan for 2013
Originally posted August 26, 2013 by Jerry Kalish
Back in April, I wrote that the Retirement Plan Season Starts Now.
“Now” literally means now for an employer who wants to start a new 401(k) plan this year and take advantage of special tax rules that allow the plan to automatically pass the 401(k) discrimination tests.
Historically, many calendar year end companies have waited until late December to establish a new retirement plan. Employers have said “as long as my plan is in place by December 31, can’t my company consider the entire year for purposes of contributions and tax deductions?”
The answer to which is generally “yes” for most types of retirement plans, but there is a big exception for new Safe Harbor 401(k) plans.
October 1 is the due date for an employer to establish a new 401(k) plan using those special “Safe Harbor” contribution rules to permit owners and other Highly Compensated Employees to maximize their contributions regardless of how much the Non-Highly Compensated Employees contribute.
It works something like this. The employer can make one of two types of Safe Harbor contributions:
- 3% of compensation for all eligible employees, or
- Matching contribution of 100% of the first 3% of an employee’s contribution, and 50% of the next 2% of an employee’s contribution. Thus, if an employee contributes the full 5%, it will cost the employer 4%.
Bottom line: Owners and other Highly Compensated Employees would be able to defer the entire $17,500 maximum plus an additional $5,500 for those over age 50…and also receive the Safe Harbor contribution.
How is this possible if a plan is established on or before October 1? It’s simply that the 401(k) individual limit is a personal calendar year limit even though the 401(k) plan would have been in effect for less than the full year.
Here are the four things needed to get done on or before the October 1, deadline.
- The TPA provides a plan document.
- The employer establishes a trust account.
- The advisor helps the employer select a 401(k) provider.
- The adviser helps communicate the plan to the employees.
There is still time for an employer to establish a new 401(k) plan, and maybe even qualify for the retirement plan start-up tax credit.
This article is for general information and discussion purposes only. Employers and employees should always seek the advice of experienced tax advisors for the application of the tax rules to their specific situation.
9 tips to help employees transition to public exchanges
Originally posted on https://ebn.benefitnews.com.
According to the Obama administration, the state insurance marketplaces set up under ACA are on schedule to begin open enrollment on Oct. 1. To aid in communicating health care reform changes this fall, here are nine tips for transitioning employees into the public marketplace from Sara Taylor, health solutions development leader at Aon Hewitt.
While the model notice provided by Health and Human Services helps employers comply with provisions of the Affordable Care Act, the notice itself is likely to generate confusion and more questions from employees than it answers. Employers should supplement the model notice with additional education on the ACA and proactively answer the question, "What do I need to do with this notice?"
Explain your benefits strategy and provide context on how the public marketplaces fit within your benefits strategy.
The ACA and marketplaces may impact different employee groups in different ways. Think through the messages that impact all employees and those messages that affect only specific audiences.
What do employees need to do and by when? This information can get lost. Be sure to clearly call out specific required action steps and deadlines – both for your benefits plans and for marketplaces.
Public marketplaces are only one option for employees to obtain medical insurance. With many states expanding Medicaid eligibility, Medicaid or other public programs may be viable alternatives for some employees.
No matter how well you communicate, some employees will have questions or need additional assistance and they will likely look to you for help. Ahead of time, determine who will be handling questions, identify likely questions and have answers and others resources prepared ahead of time.
Enrolling in health benefits can be overwhelming for many individuals, and the introduction of the marketplaces adds a whole new layer of complexity. There are resources and tools available today that can help individuals understand their options, model program eligibility — including whether they may qualify for a premium tax credit (or subsidy) in a marketplace — and in some cases, enroll in a health plan.
Ensure that your leadership is aware of and on board with your benefits strategy and how the public marketplaces fit into that strategy. Encourage your HR team and managers to be advocates for your strategy to employees.
Employees that apply for financial assistance in the marketplaces need to provide information about any health insurance available to them from an employer (e.g., cost of "you only" coverage). Individuals will be instructed to ask their employers to fill out the employer information section of the form. Know how you will handle these requests. Or better yet, give employees self-service access so they can complete the application themselves.
Five Things You Don’t Know About Health-Care Reform
Originally posted August 21, 2013 by Susan Salka on https://www.businessweek.com
Insurance sign-ups are just around the corner for millions of Americans under health-care reform, yet there’s still much people don’t know about this landmark legislation, particularly those changes occurring over the next decade inside hospitals, clinics, and doctors’ offices.
It’s a workforce thing. All the attention is on politics, or who will receive what benefits and where the money will come from. But the most important question is who will deliver the care and how it will be done. Most of the change will be accomplished by the health-care workforce. Transforming health care is a huge management challenge. Many clinicians and staff will have to fundamentally change their professional objectives and standards, daily routines, compensation, patient relationships, and employer relationships. The scope of health-care reform and current market pressures are unparalleled in any other industry; the re-engineering of health-care workforce roles now underway may completely change relationships between patients and clinicians in the next decade.
Biggest long-term problem: clinician shortages. An additional 30 million Americans will receive health-care coverage by the end of the decade, during a time when a further 15 million patients will become eligible for Medicare. Who will take care of all those people? By 2020, a shortage of 91,500 primary care and specialist physicians is predicted. Shortages of nurse practitioners and physician assistants, who could help fill in the gaps in primary care, also are predicted. Without enough clinicians, effective health-care reform could be stifled.
Getting paid to keep you well, rather than cure your illness. Changes in compensation for doctors and nurses will dramatically transform from quantity of work to quality of work. Until very recently, compensation and reimbursement were entirely based on the volume of patients and treatments. Now they’re beginning to reflect value-based benchmarks that will increase every year. Some of these include patient satisfaction, readmission rates, health risk assessments, and patient wellness, among other benchmarks. For hospitals, making sure patients are satisfied will become a pocketbook issue. For clinicians, careful disease management and preventive care to keep patients out of the hospital could directly affect how much they are paid.
Independent doctors’ practices are quickly fading. Physicians who hang a shingle outside a private office are becoming rarer. A recent survey showed that 55 percent of practicing physicians work for someone else, usually a hospital or a practice owned by a hospital or health system. That figure grew 8 percent in one year. Meanwhile, nearly 40 percent of physicians younger than 45 have never worked in private practice. Doctors are moving to employed positions in hospitals and health systems in search of greater stability in the rapidly changing health-care environment.
Your doctor may not be a doctor. One of the most striking changes for consumers may be team-based care, with physicians, nurse practitioners, physician assistants, psychologists, pharmacists, and others working together to improve quality of care and lower costs. If your health-care provider employs a team approach, when you make an appointment with your doctor you may instead see a nurse practitioner or physician assistant, depending on a quick assessment of your health status. In more than a dozen states, nurse practitioners can diagnose, treat, or prescribe with no physician involvement. Laws and regulations on the scope of practice for these clinicians are changing rapidly.
Health-care reform isn’t just about getting coverage for millions of people who don’t have it. It’s also about changing the way health care is delivered to reduce costs and improve patient care. Unless we can accomplish those two goals, increasing coverage will become prohibitively expensive. Transforming health-care delivery requires the active participation of America’s 16-million member health-care workforce.
Investors Seek Help With 401(k) Plans, Survey Finds
Originally published August 26, 2013 by Mary Ann Tasoulas on https://www.financial-planning.com
This according to a nationwide survey of more than 1,000 401(k) plan participants, commissioned by Schwab Retirement Plan Services. Respondent findings show a high level of self-reliance. Approximately nine in 10 (89%) say they will be responsible for coming up with the money to support themselves in retirement. Five percent indicated that their financial help will be provided by the government upon completion of their full time employment.
This self-reliance is fueled by the anticipated use of 401(k) plans.
• 61% report the 401(k) is their only or largest source of retirement savings
• 55% have increased their savings rate in the last two years
• 70% say their 401(k) is in better shape now than ever before
“It’s gratifying to see so many people taking the reins of their retirement,” said Steve Anderson, head of Schwab Retirement Plan Services in a statement. “In our view, contributing to a 401(k) plan should be the number one savings priority for workers. Planning ahead, taking action and getting the help you need along the way are key steps to help build sufficient retirement savings.”
UNSURE HOW TO INVEST
The survey reveals that saving in a 401(k) is not enough to instill confidence for many participants.
• 52% find their 401(k) investment explanations even more confusing than that of their health care benefits (48%)
• 57% would like an easier way to figure out what 401(k) investments are right for them
• 46% don’t feel they know what their best investment options are
• 34% feel a lot of stress over correctly allocating their 401(k) dollars
SEEKING HELP
Many 401(k) plans offer some type of professional advice, which can be instrumental in helping people take better control of their investments. Of those surveyed, 61% want personalized investment advice for their 401(k). Participants requested the need for guidance on everything from asset allocation to risk tolerance and retirement income planning.
First and foremost, the survey showed that investment confidence nearly doubled when workers have the help of a financial professional. Approximately one-third (32%) of survey respondents expressed confidence in making the right 401(k) investment choices based on their own ability, compared to 61% if they also had the help of a financial expert.
“Getting more workers engaged in professional 401(k) advice should be a top priority for employers. We’ve seen the positive impact it can have on both behaviors and outcomes,” said Anderson. “At Schwab Retirement Plan Services, Inc., participants who used third-party, professional 401(k) advice tended to increase their savings rate, were better diversified and stayed the course in their investing decisions,” he said in the same statement.
Health Care Reform Heightens Employers' Strategic Plans for Health Care Benefits
Original article can be found at https://online.wsj.com
Original source: Towers Watson
NEW YORK--(BUSINESS WIRE)--August 21, 2013--
The breadth of health care reform is prompting changes and ushering in emerging opportunities for employers, according to a survey of 420 midsize and large companies by global professional services company Towers Watson (NYSE, NASDAQ: TW). While employers remain concerned about a predicted 5.2% increase in 2014 health care costs and the risk of triggering the excise tax* in 2018, most (82%) continue to view subsidized health care benefits as an important part of their employee value proposition in 2014.
However, the 2013 Health Care Changes Ahead Survey found that a majority of employers do anticipate making moderate to significant changes in their health benefit programs for all employees and retirees by the beginning of 2016. It also revealed a clear disparity in how employers view public and private exchanges. Nearly 30% of employers have confidence in public health insurance exchanges as a viable alternative to employer-sponsored coverage in 2015. In contrast, private exchanges are more appealing, with 58% having confidence in them as a viable alternative. In short, employers are intrigued by the potential of private exchanges to control cost increases, reduce administrative burdens and provide greater value.
Employers remain committed to sponsoring health care benefits, and nearly all (98%) plan to retain their active medical plans for 2014 and 2015. However, they will look to private exchanges as a potential delivery channel. This arrangement enables them to maintain their role as plan sponsor, but outsource certain aspects of plan management to an exchange operator. Nearly three-quarters (74%) of companies surveyed reported that as they evaluate private exchanges for active full-time employees, they will want evidence that private options deliver greater value than the current self-managed model.
"The health care landscape is changing rapidly thanks to health reform, continued cost escalation, the emergence of health benefit exchanges, and new provider contracting and care delivery arrangements," said Randall Abbott, a senior health care consultant at Towers Watson. "While employers are grappling with how to comply with health care reform right now, they are evaluating new health care designs and delivery approaches for their employee and retiree populations that will ultimately transform the look of employer-provided health plans over the next three to five years. In particular, employers recognize the impact of the excise tax requires strategic planning now to create a glide path to 2018."
Initiatives to Avoid the Excise Tax
More than 60% of employers believe that they will trigger the excise tax in 2018 if they don't make adjustments to their current benefit strategy. Nearly the same percentage also say the excise tax will have a moderate or significant influence on their strategy.
To combat the increase in employee health care costs and avoid the excise tax, nearly 40% of employers will be changing their plan designs for 2014. In addition to emphasizing employee wellness and health improvement approaches, employers are looking to increase their use of supply-side strategies and aggressive vendor management techniques. For 2015 or 2016, they are considering providing outcome-based incentives (49%), offering a benefit differential for use of high-performance networks (47%) and using value-based benefit designs (40%). Employers will also be focused on reducing coverage subsidies for spouses and dependents, as well as implementing spousal coverage exclusions or spousal premium surcharges when other health coverage is available.
"Employers are balancing many competing factors as they revisit their financial commitment to health benefits and their ability to maintain a sustainable plan in the face of annual cost increases and the excise tax. They see health care benefits as an important part of their total rewards mix. And as they weigh new options, they will be looking to keep their plans affordable and viable for the long term," said Ron Fontanetta, a senior healthcare consultant at Towers Watson. "In the next two years, many employers will evaluate their strategic options for active employees, and wait to see how exchanges evolve and the broader market responds. We are likely to see a much different -- and much faster -- pace of change in retiree medical plans."
Health Care Coverage for Retirees and Part-Time Workers
With the existence of proven exchange solutions for Medicare-eligible retirees, the percentage of employers that are somewhat or very likely to discontinue their employer-sponsored plan for post-65 retirees will grow from 25% in 2014 to 44% in 2015. And with the advent of public exchanges making new solutions available for pre-65 retirees, the percentage of employers that are somewhat or very likely to discontinue their plan for pre-65 retirees will jump from 10% in 2014 to 38% in 2015.
Less change is expected for part-time employees. Only 11% are considering changes to their total rewards mix or design for part-time employees. Many part-time employees are likely to seek coverage through public exchanges.
Other Notable Trends and Data Points from the Survey
-- CEOs and CFOs have become increasingly involved in health care strategy decisions (36% and 46%, respectively).
-- Seven in 10 employers have a stronger commitment to improving employee health because of health care reform, while 71% have a stronger commitment to work with health care providers and suppliers to improve health care delivery and quality.
-- The use of personalized digital technologies to improve employee health engagement is on the rise. Forty-three percent of companies plan to use the technologies by 2014, and another 31% are considering its use for 2015 or 2016.
-- Half the companies surveyed provided employee communications that go beyond meeting compliance standards in educating employees on the law and its implications; 36% meet minimum compliance standards, and 14% go significantly beyond compliance to prepare employees for planned and potential strategic changes.
*Excise tax: According to the Patient Protection and Affordable Care Act, the federal government will impose an excise tax of 40% on insurers of employer-sponsored health plans, including self-insured employers, with an aggregate value of more than $10,200 for individual coverage and $27,500 for family coverage.
About the Survey
The 2013 Towers Watson Health Care Changes Ahead Survey offers insight into the focus and timing of U.S. employers' planned response to the Patient Protection and Affordable Care Act and the start of open enrollment for health insurance exchanges in the fall. The survey was completed by 420 employers during July 2013 and reflects respondents' 2014 -- 2016 health care benefit decisions. The responding companies comprise a broad range of industries and business sizes, and collectively employ 8.7 million employees.
More on the Oct. 1 ACA notices: Who has to provide them
Originally posted by Keith R. McMurdy on https://eba.benefitnews.com
After last week’s reminder about the Oct. 1 deadline for Affordable Care Act communications, the following question came up frequently — Does the notice requirement apply to employers with less than 50 employees?
Further clarification is provided in Technical Release 2013-02 called “Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act 18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985.” Section 18B of the FLSA was added as a result of the ACA. And it is 18B of the FLSA that contains the notice requirement that employers must communicate about the ACA with their employees. Overall, it says that every employer that is subject to the FLSA must provide the notice about coverage options. Fact Sheet 14 from the U.S. Department of Labor tells us that businesses covered by the FLSA must have at least two employees, and are those that have an annual dollar volume of sales or business revenue of at least $500,000 or are hospitals, businesses providing medical or nursing care for residents, schools and preschools or government agencies.
So, if your business is subject to the FLSA, you have to give the notice to employees of coverage options to existing employees by Oct. 1, and to all new hires within 14 days. It does not matter if you have 10 or 35 or 50 or 100 employees. If you are subject to the FLSA, you have to provide the notice.
Keith R. McMurdy is a partner with Fox Rothschild, focusing on labor and employment issues. He can be reached at kmcmurdy@foxrothschild.com or 212-878-7919.
This alert is intended for general information and educational purposes and should not be taken as specific legal advice.
5 most popular voluntary benefits
Originally posted by Kathryn Mayer on https://www.benefitspro.com
As employers consider their health care and total rewards strategies with the context of the Patient Protection and Affordable Care Act, nearly half expect voluntary benefits and services to become more important than ever over the next five years, according to the Towers Watson 2013 Voluntary Benefits and Services Survey.
The survey also found that the importance of voluntary in companies’ total rewards strategy will grow 27 percent in the next half-decade.
For now, these five voluntary benefits are the most commonly offered by employers.
5. Accident insurance
Accident insurance is among the most prevalent voluntary benefit offerings provided by employers: 68 percent offer the protection to their employees.
Other voluntary products that might be making the list in the next couple years? Towers Watson reports critical illness, identity theft and financial counseling are the top voluntary benefits to watch in the coming years.
4. Dental
Dental insurance remains a popular voluntary benefit, with 80 percent of employers offering the benefit.
Diabetes, heart disease, blindness and pregnancy complications all can be affected by dental hygiene and inflate health costs overall.
3. Disability
Benefits experts have long argued disability insurance is just as important as life insurance. And employers seem to agree: Eighty percent of employers surveyed by Towers Watson offer it.
According to the Social Security Administration, a staggering 30 percent of people will encounter a disability of three months or longer at some point during their working years.
2. Vision
Employers also see big value in vision insurance: 84 percent offer it.
Voluntary vision coverage is typically a popular product.
“We use it as a recruiting tool,” Spencer Peery, business manager at Bailey Lauerman & Associates, an advertising agency in Lincoln and Omaha, Neb., told Benefits Selling in August.
“These benefits keep our employees healthier," he said. "They use dental and vision coverage almost as much as they use health insurance, for both prevention and general care.”
1. Life
The survey reports that life insurance is the most popular voluntary benefit: 94 percent of the 320 large employers surveyed offer it.
Individual life policies were some of the first voluntary products sold in the U.S. workplace. Today, 81 percent of individuals with life insurance have workplace coverage, while half of individuals look to their employer as the only source for coverage, according to a 2012 ING study.
But despite life insurance offerings at work, industry experts say most Americans are underinsured, if they're insured at all.
Five misconceptions that come with health care exchanges
Originally posted by Samuel H. Fleet on https://ebn.benefitnews.com
The creation of health care exchanges has done little to quiet the noise. Exchanges require that retirees navigate this uncertainty on their own, buying directly from the carrier with no familiarity or direction. Additional options come with more questions, but working with the right partner helps ease the minds of an organization’s former employees so they can enjoy their retirement. Group plans have customer advocacy centers that cater specifically to an elderly population and can reinforce trust during such an ambiguous time.
The following misconceptions about health care exchanges will help shine light on some of this misinformation and show how group plans are a better option that individual plans in the post-65 space.
1. Individual plans are cheaper than group plans
Not necessarily. A retiree who is 65 may be able to find an inexpensive individual plan, but that likelihood decreases exponentially as an individual ages. One reason is because individual plans have costs built into them to help the carrier recover adverse selection. And because there is a “take it or leave it” component built into individual plans, meaning the individual can always go look for another plan if one isn’t to their liking, they will often have a charge (usually around 10%) to protect themselves.
Some carriers try to build-in other underwriting characteristics in an attempt to circumnavigate this situation, often with a questionnaire. Individuals who “pass” the underwriting questionnaire may then receive a preferred rate, but it isn’t an exact science. This maneuvering doesn’t exist with group plans, which are rated across the entire retiree segment rather than on an individual’s particular characteristics. Additionally, multiple plans are available to a retiree in a group setting, but with literally hundreds of individual plans available it can be difficult for one to feel assured that he or she is choosing the right plan. A retiree can certainly pick the most inexpensive plan, but going that route almost guarantees poor coverage.
2. Moving to an exchange eliminates employer financial liability
FASB106 liability is based on an obligation to pay for retiree benefits, regardless of whether these benefits are offered to the individual or a group. The reality is that these liabilities will continue to exist as long as the employer makes contributions in any form, and in any amount, to a retiree’s plan. This standard requires reporting of costs as well as advance mechanisms that ensure future payments to retirees will be available.
3. Retirees want more coverage options at different price points
Choice is a good thing, but too much choice is often overwhelming. In a recent survey conducted by AmWINS Group Benefits, a pool of more than 1,500 retirees enrolled in a group plan was asked if they wanted more options, and responses came back 50/50. Of those who wanted more, 82% said they only wanted two or three options at the most. Health care is critical to an aging population, and retirees are likely to have many questions when it comes to choosing their individual plans. Retirees want comfort in not only their coverage, but the stability that comes with consistent care.
4. Exchanges eliminate the employer’s administrative burdens
Because health care is critical to an aging population, they are likely to have questions and concerns along the way. A large American auto manufacturer switched to an exchange model and knew what to expect – the noise level from retirees was deafening and it continued for nearly a year. The company had no choice but to take it. If administrative obligations and burdens are a concern, consider changes to the administrator, not the plan.
5. The move to an exchange won’t cause any disruption for the retiree
The confusion that comes with a shift to an exchange model is likely to have a detrimental impact on the retiree, which can cause great disruption within the employer’s organizational structure. Retirees, the same group that built the company and carried it through hard times to prosperity, can feel forgotten once they are thrown into the exchange model. Often the people who made promises to former employees about their health care needs in the future are long gone, replaced by players in a management structure with no relationship with these retirees.
While inevitable, change is never easy. It’s not too late to support loyal, former employees in the midst of health care reform by removing some of the anxiety around change and overwhelming choices.