Breakout Session: Healthcare Problems and Costs
John D. Abraham
Senior Associate Director, Research Department  
American Federation of Teachers

B. Shana Saichek, Esq.
Employee Benefits Law, ERISA
Carney, Badley & Spellman, P.S.

Health care cost containment, especially for retirees, will be a prominent issue for years to come without the active involvement of pension plan trustees and administrators, according to two health care experts. John Abraham and Shana Saichek reviewed some of the more important concerns about cost control in health care.

Abraham said pension plans and unions must become involved in health care cost containment. More members file health care claims than file grievances, he reported. “And if we don’t do this, who will?”

The health cost drivers include shifting demographics, rising medical and prescription drug costs and a backlash against managed care. Cost shifting to enrollees is inevitable, he predicted, unless they become more proactive on the issue of health care. He offered several bargaining strategies for containing the size of the premium increase, focusing particularly on the benefits of consolidating insurance purchasing.

Saichek explained two variations on tax-favored retiree medical plans, which can be funded by employer and employee contributions:

• a premium reimbursement plan, and
• a medical expense reimbursement plan.

Retiree medical plans, Saichek said, offer a valuable new tax-favored benefit for employee groups. They are increasingly popular, especially in the public sector where employees often stay with the same employer for many years. That longevity is an important ingredient for funding these plans, whose tax-exempt status has IRS approval.

Abraham is the author of several articles and papers on pension and health plans, is an advisor to the Department of Labor and an instructor at George Washington University. He has a BA in Economics from the University of California at Santa Barbara, and an MBA in Finance from Loyola University of Chicago.

Saichek represents many West Coast police and fire fighter unions regarding their employee benefit plans. She graduated summa cum laude in history from the University of California at San Diego, and received her law degree from the University of Washington.