Retiree health plans - what do we do now?

Article Abstract:

The rules proposed by the Financial Accounting Standards Board (FASB) affecting retiree health benefit plans have caused many corporations to reexamine their benefit policies. The proposed rules will increase the current costs that are charged against earnings. Companies will have to recognize, in current benefit plan costs, some of the present value of future retiree benefits provided to active employees. A FASB exposure draft released in February 1989 identifies postretirement health and life insurance benefits as deferred compensation. Consequently, the benefit costs should be recognized during employees' working years. Companies will have to switch from pay-as-you-go to accrual accounting in 1992. The proposed FASB rules will affect companies differently depending on factors that include employee characteristics, benefits plans, and the extent of prefunding. A case study of a hypothetical corporation is presented.

Laws, regulations and rules, Insurance, Retirees, Retirement benefits, Financial Accounting Standards Board, Cost shifting (Medical care)

---

Strategic management of employee health care costs

Article Abstract:

Managerial accountants are critical in health care cost management and the design of health care systems. The two major methods of cost containment are shifting costs to employees or controlling the access to medical services. Methods for shifting costs to the employees include increased premiums, cost sharing, and increased use of deductibles. Companies must also provide incentives to employees to use cheaper alternative health care, such as health maintenance organizations and provide a wellness program of preventive care promoting a healthy life style. When designing health care plans, managerial accountants must: analyze the risk of company financial exposure; determine the level of medical services to be provided; and track employee use. Plans should be designed to discourage overuse while remaining user-friendly. They should also eliminate unneeded procedures and provide efficient, competent care.

Medical care, Cost of, Health care costs, Managerial accounting

---

Similar abstracts:

• Abstracts: Stock option plans make sense. Managing health care costs: flex-plans. Making child care an employee benefit
• Abstracts: Renewing our heritage: ten reasons why management accountants should study the classic cost accounting articles. part 2
• Abstracts: Institutionalization of a management science innovation in police departments. Approximation of the overflow process from a G-M-N-K queueing system
• Abstracts: A laboratory market investigation of low balling in audit pricing. An examination of the effects of experience and task complexity on audit judgments
• Abstracts: The relationship between knowledge structure and judgments for experienced and inexperienced auditors. Underpricing of new issues and the choice of auditor as a signal of investment banker reputation

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.