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NEWS RELEASE
September 23, 2008
Council recommends new, tax-favored approaches to address decline in retiree health coverageWASHINGTON, D.C. — “Retiree health care coverage, like many employer-sponsored benefit programs, are at risk in today’s uncertain economic environment. Ever-rising costs and inconsistent quality measures threaten the sustainability of this coverage,” said American Benefits Council president James A. Klein regarding today’s House of Representatives Education and Labor Committee hearing on the subject of Safeguarding Retiree Health Benefits. “The testimony before the committee today underscores the significance of this issue for employers and employees alike.”The Council’s 2004 long-term strategic plan document, Safe and Sound: A Ten-Year Plan for Promoting Personal Financial Security, offered specific policy proposals for reversing these negative coverage trends. One such suggestion was the creation of mechanisms to allow individuals and employers to advance fund anticipated retiree health and long-term care costs in a tax-favored manner and integrate these programs with more traditional retirement savings programs. “Whether employees are permitted to devote a portion of their health savings account or 401(k) contributions to a separate retiree health fund, or if a new vehicle such as Retiree Medical Benefit Accounts (RMBAs) is established, the point is to get employees thinking about their future health care security and acting to address it,” Klein said. “Obviously, significant and comprehensive educational efforts are necessary to ensure that all Americans understand their responsibility and challenges of preparing for their health care needs in retirement through insurance and enhanced retirement savings,” Klein said. “But we must also give employees additional tools to make these strategies effective. To arrange an interview on this subject with Klein or other Council policy experts, please contact Jason Hammersla, Council director, communications, at jhammersla@abcstaff.org. You may reach him by phone during business hours at 202-289-6700 and after business hours at 202-253-5458.
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Councils member's represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.
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