MEDICARE SUPPLEMENTAL INSURANCE

The primary health care insurance of interest to most retirees is a plan that will pay the Medicare deductibles and co-pays. Retirees usually desire a plan that is also available to their spouses. NCBA offers Medicare Supplemental Insurance Plans. The design of these plans meets the federal government criteria that was introduced in 1990. The NCBA plans also offer an inexpensive prescription drugs feature for purchasing most generic drugs for a small co-pay.

These plans are "indemnity" plans and are not "managed care" plans. So retirees do not have to worry if they travel or if they want to decide on which doctor they prefer to visit. They are not limited to HMO rules and restrictions. And with the variety of plan options that are available, retirees can choose the level of coverage and protection that meets their own particular needs.

EMPLOYER CONSIDERATION: FASB 106 IMPLEMENTATION

In 1990 the Financial Accounting Standards Board (FASB) issued a statement entitled "Employers Accounting for Post-Retirement Benefits Other than Pensions (FASB 106)". Imposed by this ruling is the requirement that employers begin accruing the projected cost of post-retirement benefits during an employee's working career. The employer should value the cost of post-retirement benefits and place the results in their financial statements as a liability.

Some employers have looked for ways to systematically fund these liabilities while most are actively seeking ways to reduce the cost. One method of implementing FASB 106 requirements is the employer choosing to "policy insure" for its retirees. This has a dual benefit. First, the liability is a known (therefore "controlled") cost - the premium. Second, rather than reducing benefits, benefits may improve.

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