Magazine article Risk Management

Executive Forum

Magazine article Risk Management

Executive Forum

Article excerpt

Several years ago a friend of mine was transferred from corporate risk manager to manager of employee benefits within the same company. He was responsible for the purchasing/funding of these programs, as well as more traditional human resources functions. Some time after assuming his new responsibilities, he commented that "this job used to be fun." Considering the environmental changes affecting employer-provided benefits in recent years, his comment was accurate, and even somewhat prophetic.

On a federal level we've faced COBRA, OBRA, section 89 and Tax Reform Act discrimination tests, elimination of the Veba trust as a long-term repository for future benefits, maximum limits on 401k, attacks on the deductibility of corporate costs of health/welfare programs and attempts at making benefits taxable to recipients. State governments have presented "help" such as: (often contradictory) state-by-state regulations, "universal" health care plans, antiquated statutes limiting employers' flexibility in providing benefits, and, often, a total abrogation of the state's role as a balance between health care supply and demand.

Outside of governmental forces, the pricing of medical services, which is often beyond what the market will bear, combined with extraordinarily expensive techniques, hardware and drug regimens, has forced a laser focus on the entire arena of total employee compensation, including health and welfare areas. …

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