ncpers and health care: promoting secure retirement hank kim, esq. national conference on public...
TRANSCRIPT
NCPERS and Health Care:Promoting Secure Retirement
Hank Kim, Esq.
National Conference on Public Employee Retirement Systems
Presentation Overview
• Introduction to National Conference on Public Employee Retirement Systems
• Why Health Care?
• NCPERS Reactions & Initiatives
• The Road Ahead
• Wrap up and Q & As
NCPERS
• Largest nonprofit trade association representing 500 public sector DB plans
• Who we ARE:– Advocacy– Research– Education
• Chairing the DB Coalition
NCPERS Position
• All workers (public and private) have the right to a secure retirement.
• A traditional pension plan (DB plan) and a good retiree health care plan are significant contributors to a secure retirement.
Why Health Care?
• Medicare Part D
• More people are losing coverage
• Health care costs = 16% of nation’s GDP
• Unsustainable health inflation
• Quality of care uneven
Why Health Care?
• Retirees are suffering!
• Average pension benefit is FL is $850/ month.
• Average HI premium for retirees is $900+/ month.
Why Health Care?
• Governmental Accounting Standards Board• In June 2004, the GASB approved the final set of
accounting standards applicable to “Other Post-employment Benefits” (OPEB)– Statement No. 43, Financial Reporting for
Postemployment Benefit Plans Other Than Pension Plans and,
– Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions
Why Health Care?
• When promised in the form of a defined benefit, OPEB includes:
– Postemployment Health Care Benefits• Medical, dental, vision, hearing, and other health-related
benefits whether provided separately or through the pension plan
– Other Benefits• Life insurance, disability, long-term care, etc., when provided
separately from a defined benefit pension plan
• Largest component of OPEB is health care
GASB Forum• www.NCPERS.org• Experts from GASB,
credit rating agency, consulting and law firms.
• Help understand what GASB statements are and what they encourage.
• Offer advantages ways to pre-fund for retiree health care.
GASB Forum• www.NCPERS.org• Experts from GASB,
credit rating agency, consulting and law firms.
• Help understand what GASB statements are and what they encourage.
• Offer advantages ways to pre-fund for retiree health care.
NCPERS Reactions & Initiatives
• 2002 formed our Task Force on Health Care Benefits.
• Issued 25 specific recommendations.
• All 25 recommendations have been either completed or are near completion.
First Task Force Report
• Survey NCPERS members about retiree health care.
• Explore DB-style pre-funding options.
• Introduce legislation to help retirees purchase health insurance.
Second Task Force Report
• NCPERS survey revealed that:– 93% of respondents
reported their beneficiaries had access to group health insurance.
– 78% of respondents reported some-level of retiree co-insurance.
Third Task Force Report
• Currently available tool that helps to save for health care needs in retirement.
• DB features.• Employers &
employees can contribute into RMT.
• All tax free!
Legislative Activities
• NCPERS Healthcare Enhancement for Local Public Safety (HELPS) Retirees
• HELPS Retirees bill allows public safety retirees to use up to $3,000 of pre-tax money for health insurance premiums.
Healthcare Enhancement for Local Public Safety (HELPS) Retirees
• Allows retired public safety officers to use up to $3,000 on a tax-free basis to purchase health insurance.
• Begins on January 1, 2007.
HELPS Retirees Applies to:
• Public safety officers.
• Who separated due to disability or attainment of normal retirement age.
• Purchase of health insurance or long-term care insurance.
• Can use DB, 403(b), or 457 plan distributions.
HELPS Implementation• www.NCPERS.org• IRS guidance &
NCPERS response
• Legal memo• FAQs for pensions• FAQs for public safety
officers• Model enrollment
forms• Text of HELPS
Retirees
HELPS Retirees History
• 108th Congress – 2003 Portman-Cardin bill– Provision to allow all retirees to use pre-tax
$ for health insurance premiums– Provision and H.R. 1776 died– 2004 NCPERS tried for public sector only– No bill introduced because of cost and equity
argument
HELPS Retirees Bill
• 109th Congress– 2005 Rep. Chocola introduces H.R. 2177,
Healthcare Enhancement for Local Public Safety (HELPS) Retirees bill.
– Over 104 cosponsors– Sec. 845 of Pension Protection Act (H.R. 4)– Signed into law August 17, 2006 (PL 109-280)– Took effect January 1, 2007
H E L P S – 22007
• Healthcare
• Enhancement
• Local
• Public
• Servants Round 2
Latest Task Force Recommendation• Public Sector Health
Care Symposium • September 2006• Nearly 200 attendees
learned about:– GASB OPEB
– GASB responses
– Universal health insurance laws in Massachusetts and Vermont
NCPERS Second AnnualHealth Care Symposium
• Public Sector Health Care Symposium – October 1-3, 2007 in Chicago.
• Visit www.NCPERS.org in the coming months for more information on the Symposium and other health care news.
NCPERS 2007 Educational Programs
Legislative Conference
February 5-7 in Washington, DC
Trustee Educational Conference
May 18-19 in Honolulu, HI
Annual Conference
May 20-24 in Honolulu, HI
Public Sector Health Care Symposium October 1-3 in Chicago
NCPERS Resources
Questions
NCPERS
444 North Capitol Street, NW, Suite 221
Washington, DC 20001
202-624-1456
www.NCPERS.org