CAREER TURNS 
Recent Posts
- Train the Trainer: A Review of the CPSM Instructor Program
- Health Care in Your Work Space
- Companies cope with the high cost of gas
- Body Language: A Dialect All Its Own?
- Is 5S Implementation Truly Worth the Effort?
- SWOT or SWOTT Analysis
- Every Team Needs a Leader
- Service and Leadership
- Home Again!
- Book Learning
Recent Comments
- Mary on Train the Trainer: A Review of the CPSM Instructor Program
- Eric on Train the Trainer: A Review of the CPSM Instructor Program
- mew on Every Team Needs a Leader
- Erik O'Grady on Every Team Needs a Leader
- AZReam on Health Care in Your Work Space
Most Commented On
- Certificate or Certification? (16)
- Who does what? A Look at Procurement's Role in the Supply Chain (9)
- Generation Gap: Go Easy on the Millennial Group (4)
- The Bored Employee (4)
- Who Am I? Read my card! (4)
Archives
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
Blog
Link This | Email this | Blog This | Comments (0)
Retiree Health Benefits
The trend continues as companies cut back on retirees’ health coverage. In the l950s and l960s, retiree health benefits were offered in the U.S. as part of the package that employers used to attract and retain employees. Some companies paid all of the expense for health care for the employee. Some companies paid only a percentage.
Today the situation is different. It did not just happen. There were reasons for the change. Between 1988 and 2006, the share of large employers offering retiree health benefits declined from 66% to 35%. The benefits offered started to drop significantly in 1993. Employers started to recognize the future cost of these benefits in their financial statement.
The reason: In 1993, the Financial Accounting Standards Board issued standard 106, which recommended that companies account for the costs of current and future retirees’ health care.
For some companies, continuing to pay for retiree health benefits would no longer be feasible. A way for companies to raise profits is to cut back on health care benefits. It is what companies have to do in today’s economy. Is this true, or does it just present a larger percentage of profit to the company? Companies must please the stockholders by showing a better profit margin.
Retiree health benefits are not protected by law, like some pensions. Pensions are a legal obligation, health benefits aren’t, per Richard Johnson, principal research associate at the Urban Institute.
The U.S. Department of Labor advises that you review your health plan documents to understand the terms regarding termination of benefits.
The list of companies changing their policies is growing:
Sears Roebuck and Company, Lucent Technologies, Ford Motor Company, Chrysler, Bethlehem Steel, LTV Steel Corporation, IBM, Northrop Grumman are just a few that have revised their benefit plans.
Johnson says, “Don’t assume your benefits will always be there, save if you can and have an alternate plan.” Don’t wait till you get there, plan now!
Retiree Health Benefits
September 12, 2007
The trend continues as companies cut back on retirees’ health coverage. In the l950s and l960s, retiree health benefits were offered in the U.S. as part of the package that employers used to attract and retain employees. Some companies paid all of the expense for health care for the employee. Some companies paid only a percentage. Today the situation is different. It did not just happen. There were reasons for the change. Between 1988 and 2006, the share of large employers offering retiree health benefits declined from 66% to 35%. The benefits offered started to drop significantly in 1993. Employers started to recognize the future cost of these benefits in their financial statement.
The reason: In 1993, the Financial Accounting Standards Board issued standard 106, which recommended that companies account for the costs of current and future retirees’ health care.
For some companies, continuing to pay for retiree health benefits would no longer be feasible. A way for companies to raise profits is to cut back on health care benefits. It is what companies have to do in today’s economy. Is this true, or does it just present a larger percentage of profit to the company? Companies must please the stockholders by showing a better profit margin.
Retiree health benefits are not protected by law, like some pensions. Pensions are a legal obligation, health benefits aren’t, per Richard Johnson, principal research associate at the Urban Institute.
The U.S. Department of Labor advises that you review your health plan documents to understand the terms regarding termination of benefits.
The list of companies changing their policies is growing:
Sears Roebuck and Company, Lucent Technologies, Ford Motor Company, Chrysler, Bethlehem Steel, LTV Steel Corporation, IBM, Northrop Grumman are just a few that have revised their benefit plans.
Johnson says, “Don’t assume your benefits will always be there, save if you can and have an alternate plan.” Don’t wait till you get there, plan now!
Posted by Mary Walker on September 12, 2007 | Comments (0)
Industries: Career/Jobs
Advertisement
Advertisements
