To examine the implications for private-sector health and retirement benefits, as well the costs and consequences and what the numbers are, the Employee Benefit Research Institute (EBRI) recently held a day-long policy forum in Washington, DC. Approximately 100 experts, benefits professionals and policymakers attended to provide their perspectives and predictions.
An EBRI report about the forum notes that the reach and impact of these benefits is immense. Employment-based health benefits are the most common form of health insurance in the United States, covering nearly 59% of all nonelderly Americans in 2010 and 69% of working adults. Assets in employment-based defined benefit (pension) and defined contribution (401(k)-type) plans account for more than one-third of all retirement assets held in the United States, and a significant percentage of assets held today in individual retirement accounts (IRAs) originated as a rollover account from an employer-sponsored program.
Workers routinely rank their employment-based health coverage as the most important benefit they receive, followed by a retirement plan.
Since private-sector health benefits alone rank as the largest single “tax expenditure” in the federal budget, various proposals have been made either to reduce or even to phase out the cost of that program to the government. For employers that sponsor these benefits – and the workers who receive them – the implications are enormous, the EBRI report points out. “When you look at some of the recent proposals for reform, benefit plan tax incentives are an area of total and complete volatility, and neither employers nor workers can have any certainty of what lies ahead,” said Dallas Salisbury, president and CEO of EBRI.