Archive for the ‘Health Care’ Category

NJ Republican Pension Focus

State Senator Tom Kean Jr. (R), when asked directly what to do about the pension crisis in New Jersey, gave an answer within his two minutes of allotted time that had nothing to do with pensions:

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Sick of Murphy

A retired cop friend of mine now runs a security business with 85 employees and New Jersey Governor Phil Murphy’s new sick leave law just cost him (or whoever he passes on that additional cost of doing business in New Jersey to) $50,000 a year. The law was summarized by Nixon Peabody and here are excerpts:

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Trumping Insurers

When I first started speaking out as a young actuary I had one primary focus:

Repeal Mccarran-Ferguson

Because of the power of the insurance lobby and those premium taxes paid to states for their mis-regulation that went nowhere.  Until…..

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Obeying the Law – After Getting Caught

The second paragraph of the New Jersey State Health Benefits Program handbook on eligibility reads:

Any newly appointed or elected officer will be required to work a minimum of 35 hours per week to be considered “full-time” and eligible for coverage under the SHBP/SEHBP.
Getting part-time elected officials off the benefits gravy train was one of the first initiatives of Governor Christie in 2010 but when you are dealing with elected officials often put in office by lawyers that they then hire to give them the legal opinions they want this is what you can expect:

Studying NJ Health Committees

Gov. Chris Christie’s budget address came with a public challenge to cut $250 million from state employees’ health benefits:

According to an story today:

Finding those savings falls to the State Health Benefits Program Plan Design Committee, the 12-person panel that figures out health care plans for state government workers, and the School Employees’ Health Benefits Program Plan Design Committee, the six-member panel that establishes benefits for school retirees.

The panels — whose members are split evenly between union and Christie administration representatives — were created as part of the 2011 pension and health care reform law that hiked employee contributions up to 35 percent of the premium, depending on a worker’s salary.

Though Christie’s proposed budget assumes this $250 million in savings, the union members are quick to point out the health benefits committees are autonomous, and Christie’s authority is limited to the votes of the management members.

“We don’t work for him,” said Hetty Rosenstein, area director of the Communications Workers of America and a state workers’  committee member.


Under state law, the committee has sole discretion over changes to employee health plans, she said. The committee’s independence was affirmed by a 2014 state appeals court ruling that said the administration overstepped when it raised retiree prescription drug copays in 2013 without consent from at least seven committee members.

Spokespeople for administration officials on the committee did not respond for requests for comment or deferred comment to the governor’s office.

So what have these committees been doing?

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Actuaries a Footnote in NJ Benefits Study

The “Non-Partisan Study Commission Asked To Think Big And Be Bold” according to their website boldly came out with their Supplemental Report on Health Benefits the day after it would make no difference to anyone not running for president.

Two of the original Commission members did not sign off on this report:

  • Carl Hess, Managing Director of The Americas for Towers Watson and former Managing Director of Towers Watson Investment business
  • Margaret Berger, Mercer, consulting actuary and Principal for the Retirement Practice of a global consulting leader in talent, health, retirement, and investments, with specific expertise in defined benefit plans, nonqualified plans and retiree medical and life insurance plans

And the only two other actuaries had nothing to do with this report according to End Note 1 on page 25:

 1 Commission Members Ethan Kra and Lawrence Sher are pension actuaries serving on the Commission as concerned citizens. They were not involved in preparing and are not responsible as actuaries for the health benefits-related cost projections set forth in this Report.

Based on the numbers included in the report and this disclaimer what these actuaries seem most concerned about is lawsuits.

From what I could make of the changes it seems as if for 2016 the State cost of health benefits would drop from $3.53 to $2.37 billion dollars by changing colors on the insurance plan and then down to $1.45 by having localities pay for the teacher part.  These savings would then go into the pension system to pay off the underfunding. How the new color scheme creates all these savings (which would also be extended to the health benefit costs of localities) is never explained in detail (ie. will the insurance people backing politicians throughout the state be taking a hit?) which leads me to believe that a random number generator could have been used (something that ASOPs are not currently endorsing).

Notable excerpts from this new report follow:

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S-HNB and the demise of the Yard-Man Presumption

Public plan sessions are tomorrow with New Jersey likely to be featured but today I learned of two recent events that might mean in ten years nobody will get retiree health benefits outside of Medicare, Medicaid, or Obamacare and there will probably never be a federal bailout of pensions beyond what the PBGC can afford.

It was also announced that this will be the last EA meeting that will be recorded so in future years I may be the only one memorializing this sort of stuff:

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