One solution to rising healthcare costs

Article Abstract:

Healthcare costs are becoming a primary concern of employers, many of whom are seeking innovative strategies to keep the price of employee healthcare down. Two of the strategies being used with some success are managed care programs, which use healthcare cost managers' services to ensure that any medical treatment is needed and cost-effective; and higher deductibles, which discourage unnecessary medical treatment by placing a greater burden on employees. Some employers are reaping substantial savings by combining high deductibles with self-insurance. Another solution to rising healthcare costs is combining self-insurance with a limited benefits policy. The insurance policies offer 'in-hospital only' coverage, and do not cover outpatient services. This is then supplemented with a limited self-insured 'outpatient benefits' plan. The savings on insurance premiums can be as high as 50%; additional savings come from saving insurance company administrative expenses incurred for routine claims.

Accounting and auditing, Medical care, Cost of, Health care costs

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Controlling employee benefits expense

Article Abstract:

The best technique for controlling and managing escalating health care benefits costs is a careful transition to increased employee cost sharing. The steps in the transition should include programs to increase employee understanding of how health care plans work; increase employee awareness of how much the plans cost; and encourage employees to participate in decisions that affect benefit plans. Companies should also index employee cost sharing to medical inflation or cost-of-living increases. Federal legislation is pending that will have a significant impact on employer-provided health care benefit plans. Congress will most likely try to extend coverage to workers not already covered by a plan. For cost control measures to be ultimately successful, health care providers, insurance carriers, employers, labor, and government must participate in solving the problem.

Analysis, Cost shifting (Medical care)

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Funding retiree health benefits

Article Abstract:

Employers should consider using tax-advantaged voluntary employee beneficiary associations (VEBA) for funding retiree health benefits. Organizations providing nonpension retirement benefits must either find appropriate funding vehicles for the benefits, or prepare financial statements that report a significant unfunded liability. Employees must approve VEBA membership. Membership is available for active employees, as well as employees on a leave of absence; employees who terminated because of a layoff, disability, or retirement; surviving spouses and dependents of deceased employees; and independent contractors. The steps in implementing a VEBA include actuarially calculating current and future liability, identifying cash flow requirements, and selecting compatible life insurance policies.

Taxation, Retirement benefits, Voluntary employees' beneficiary associations, column

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