Rule Will Require Employers To Report Health Costs
in order to meet the new standard, "many
Some states and cities likely will increase taxes and reduce services and benefits to address retiree health benefits costs, the Wall Street Journal reports. A new Governmental Accounting Standards Board rule, set to take effect the first fiscal year beginning after Dec. 15, will require public employers to disclose costs of retiree medical benefits (Mincer, Wall Street Journal, 11/9).
Under the rule, public agencies will have to report the current and future costs of health care and other benefits -- such as dental, vision and life insurance -- for the nation's estimated 24.5 million public employees. GASB, a not-for-profit organization that establishes accounting standards for public agencies, created the rules in 2004 and allowed governments several years to put them in place.
Under the rules, states must pay their liabilities over a 30-year period. If state officials choose not to earmark funds to cover the payments each year, the liabilities will count against the state's net assets (American Health Line, 11/2).
The new rule applies to state and local government employees, teachers, and county and city employees. Public employers with a minimum of $100 million in annual revenue will have to begin reporting the data the first fiscal year beginning after Dec. 15, while those with revenue of $10 million to $100 million have to report beginning by the same date in 2007. Employers with revenue under $10 million have until after Dec. 15, 2008 (Wall Street Journal, 11/9).