Benefits November 28, 2012

Health Care Costs Tops Investors' Retirement Worries

November 28, 2012 (PLANSPONSOR.com) – Looking ahead to retirement, investors have several financial concerns.
Reported by

A T. Rowe Price survey found the top retirement concerns among investors ages 21 to 50 are health care costs (76%), rising taxes (67%), Social Security availability (63%), inflation (61%), long-term care (58%), living too long and running out of money (52%), and housing values (52%).

Only 16% of investors expect to receive full Social Security benefits as currently promised. The remaining 84% expect to receive no Social Security benefits (36%) or some form of reduced benefits when they retire (48%).

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When asked what they are doing differently to prepare for retirement as a result of this Social Security view, the most common responses among the 84%-group were saving more (42%) and planning to work longer (29%); 13% said they are doing nothing about it, 11% said they are investing more aggressively, and 5% said they do not plan to retire.

When asked for ways they are helping their parents or grandparents with financial matters, 19% of investors said they are providing guidance with daily expenses, 15% are providing general retirement planning guidance, 13% are providing direct financial assistance in meeting daily living expenses, and 9% are helping their elders better understand their Social Security options.

For those who provide general retirement planning guidance, only 59% believe their parents or grandparents will have enough money to maintain their desired lifestyle; the remaining 41% believe their elders will not have enough money (26%) or are not sure (15%).

The survey was conducted online within the United States by Harris Interactive on behalf of T. Rowe Price August 8-20, 2012, among 850 adults ages 21 to 50 who have at least one investment account.

Benefits November 28, 2012

Large Firms Drive Self-Insured Plan Growth

November 28, 2012 (PLANSPONSOR.com) – Large-size private-sector employers are driving a trend toward more “self-insured” health plans, according to an EBRI report.
Reported by

In 2011, 58.5% of workers with health coverage were in self-insured plans, up from 40.9% in 1998. To date, large-size employers (with 1,000 or more workers) have driven the upward trend in overall self-insurance. The number of workers in self-insured plans in firms with fewer than 50 employees has remained close to 12% in most years examined.    

Massachusetts, the only state to have enacted health reform similar to the Patient Protection and Affordable Care Act (PPACA), has seen an increase in the percentage of workers in self-insured plans among all firm-size cohorts, except among workers in firms with fewer than 50 employees.   

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EBRI explained that among employers that offer health coverage to their workers, there are two basic types of insurance plan:   

  • A self-insured plan, in which the employer assumes the financial risk related to health insurance; and 
  • A fully insured plan, in which an insurance company is paid to assume the risk.  

  

Historically, large firms have been far more likely to self-insure than have been small ones, the report notes, and there are significant incentives for them to do so. First, large-size multi-state employers can provide uniform health benefits across state lines if they self-insure (lowering administrative costs) and also are not required to cover state-mandated health care services, as are fully insured plans.  

The report, “Self-Insured Health Plans: State Variation and Recent Trends by Firm Size,” is online at www.ebri.org.

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