Tag Archives: public sector benefits

Health Care Costs

Local Governments Must Disclose Retiree Health Liabilities Properly

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U.S. state and local governments will have to report billions of dollars in health-care liabilities on their balance sheets under an accounting change aimed at improving disclosure of retiree benefits.

As a result of rules approved Tuesday by the Governmental Accounting Standards Board, municipalities and states will have to record the cost of health insurance and other benefits besides pensions in financial statements, the board said in a statement. Such costs are currently disclosed only in footnotes. (Darrell Preston, BloombergBusiness, June 2, 2015)

This great news is the result of years of grinding out the issue. State and local authorities have had to carry pension liabilities on their balance sheets for years now. Allowing them to keep retiree health liabilities offside biased negotiations in favor of health benefits because they could be more easily disguised from municipal bond investors and taxpayers.

This is surely a major cause of inflated health benefits for current government workers as well (which we’ve discussed here and here.) The new rule will dampen these benefits, which should help keep health costs down.

(Read the entire rule here.)

Health Insurance

Employer-Based Health Insurance Costs Up 3 Percent, Share of Covered Workers in High-Deductible Health Plans Steady

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The annual Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey has been released. As many expected, the increase in employer-based health costs from 2013 to 2014 was moderate:

In 2014, the average annual premiums for employer-sponsored health insurance are $6,025 for single coverage and $16,834 for family coverage. The average family premium rose 3% over the 2013 average premium. Single coverage premiums rose 2% in 2014 but are not statistically different than the 2013 premium amounts. During the same period, workers’ wages increased 2.3% and inflation increased 2%. Over the last ten years, the average premium for family coverage has increased 69% (Exhibit A).  Premiums have increased less quickly over the last five years (2009 to 2014), than the preceding five year period (2004 to 2009) (26% vs. 34%).

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Health Care Costs

Government Workers’ Health Benefits Cost 40 Percent More Than Private Workers

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I recently gave critical treatment to an advocacy piece by an employers’ group, which promoted harmful, government-driven, solutions to price transparency in health care. This entry will argue that private employers are not entirely ineffective.

health-insuranceThe media never fails to give good coverage to the Kaiser Family Foundation’s Annual Employer Health Benefits Survey, which includes “almost three thousand interviews with non-federal public and private firms”.

The Kaiser Family Foundation Survey reports a total premium for single coverage of $5,884 per employee, of which the worker paid $999 and the employer paid $4,885. (Economically speaking, the employee actually paid the entire cost, because the employer would otherwise have paid the balance as wages. However, our culture struggles to accept this, so we’ll let the figures stand as reported.)

The Kaiser Family Foundation divides its sample in different ways. It reports coverage by household size. It reports coverage by employer size. What it does not do is separate he public-sector benefits from the private-sector benefits. This is a shame because the report is freely available and heavily reported.

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