Thousands of pages of regulations. Public and private options. Incentives, penalties and plenty of confusion about what applies to whom.
Health care reform has made group medical benefits into a complicated morass of challenges for employers and their agents and brokers; but even before the Affordable Care Act was passed and implemented, employee benefits was a field for specialists, trained in navigating state and federal laws, markets and varieties of plan designs.
While many agents and brokers are working hard to build an employee benefits practice as a companion to property/casualty insurance and risk management, others have chosen to avoid group health programs entirely, preferring to refer customers to specialists with advanced training and a service infrastructure.
Prudential's prescription for underfunded DC plans
Employees nearing their expected retirement date face sobering consequences when their defined contribution retirement plans are underfunded, as many are. How underfunded? One scary number, from a TD Ameritrade December 2012 study, quoted in a Prudential Retirement White Paper, suggests that "the average baby boomer is $500,000 short in their retirement savings."
This underfunding creates a problem for the employer too. Large numbers of employees may decide they want to close their retirement income gap by delaying retirement. The White Paper cites Financial Finesse Reports figures from 2011 estimating a cost of $10,000 to $50,000 per employee, per year, for every year a retirement is delayed.
Prudential notes that delayed retirement costs include higher health care expenses of older workers, as well as productivity costs such as the demoralizing effect on younger workers and the inability of the company to hire new talent.
