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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
From Spencer's Benefits Reports: An average premium increase of 17% is expected for Medicare beneficiaries who retain their current Part D drug plan for 2008, according to an analysis completed for the Kaiser Family Foundation. The 1,824 stand-alone Part D plans (PDPs) offered across the country in 2008 will charge monthly premiums ranging from $9.80 to $107.50, averaging $31.99 (up from $27.39 in 2007). Nearly one in five enrollees will experience an annual increase of at least $120 if they stay in the same plan next year, Kaiser noted.
More than 90% of Part D enrollees kept the same PDP from 2006 to 2007. Three-fourths of current enrollees will pay higher premiums unless they change PDPs in 2008, Kaiser said. Nearly half of PDP enrollees face monthly increases of $5, up 30% from 2007 premiums. About one-fourth of enrollees who have not changed their PDP from 2006 through 2008 will have premium increases of at least 50% over those three years. Despite the availability of new low-cost PDP options in 2008, nearly one-fifth (19%) of all PDPs have premiums of at least $60 per month, compared to 12% of PDPs in 2007.
Almost all plans that provide coverage for prescription drugs in the coverage gap (called the “donut hole”) are restricting that coverage to generic drugs. The monthly premium for PDPs with some coverage in the donut hole averages twice the amount for other PDP coverage, about $63.29. From 2007 to 2008, the average premium for PDPs that help cover the cost of generic drugs in the gap rose by 23%.
“Although many beneficiaries are interested in purchasing coverage that offers protection against drug costs … in the coverage gap, it is not clear whether the enhanced benefits offered by PDPs in 2008, covering primarily generic drugs in the gap, provide added value commensurate with their higher average monthly premiums,” Kaiser commented. “Unless they change plans, virtually no PDP enrollees will gain gap coverage for generics, and over half of PDP enrollees who have gap coverage for all generic drugs in 2007 will have only partial coverage of generics in 2008.” An actuarial projection for Kaiser estimates that more than 3 million of the 24 million Part D enrollees will reach the gap in 2007.
“Early experience indicates that a majority of enrollees have elected to keep the coverage they have from one year to the next rather than switch plans,” Kaiser stated. “Measures that make it easier for beneficiaries to choose plans with optimal Part D coverage could make the market operate more efficiently and effectively for consumers.”
Another challenge for Part D beneficiaries is that the “wide variation in benefit designs that persists in the Part D market adds to the challenge facing beneficiaries in comparing benefits across plans and choosing the plan that will best meet their needs,” according to Kaiser. Only about 10% of plans studied by Kaiser, including two of the top ten plans in enrollment, offer the standard Part D plan design. Fewer than one-third of the PDPs require the standard deductible, fewer than 10% require a lower deductible, and about 60% require no deductible. In addition, most of the PDPs use a tiered copayment structure, rather than the 25% coinsurance—74% use a three-tier copayment structure, and 87% have a specialty tier. In addition, Part D enrollees incurred higher costs for preferred and nonpreferred brand-name drugs than did participants in employer-sponsored health care plans—$29.36 versus $25 for preferred brands and $63.31 versus $43 for nonpreferred brands. The Kaiser study reviewed plan designs for 47 national plans sponsored by 15 organizations and representing 88% of the enrollment in all PDPs in 34 regions.
The Kaiser Family Foundation’s Medicare Policy Project publications on Part D plan design, premiums, coverage, and specialty tiers are available free of charge at http://www.kff.org.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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