News

State Insurance Mandates and the ACA Essential Benefits Provisions
Source: NCSL

Every state has a substantial number of laws that require private market health insurance to cover specific benefits and provider services. An introduction to such laws is provided below, titled Understanding Mandated Health Insurance Benefits.

State Mandated Benefits

Traditionally states counted health mandate laws to include required categories of up to 70 distinct “benefits” as well as “health providers” (such as acupuncturists or chiropractors) and “persons covered” (such as adopted children, handicapped dependents or adult dependents). Adding up these laws, there are more than 1,900 such statutes among all 50 states; another analysis tallies more than 2,200 individual statute provisions, adopted over a 30+ year period.

Federal “Essential Health Benefits (EHB)

The Patient Protection and Affordable Care Act (ACA) provides for “essential health benefits,” defined as health treatment and services benefits in sections 1302(a) and (b). These combined benefit requirements apply to all policies sold in Exchanges and in the small group and individual markets, effective October 1, 2013. The benefits are covered for individual patient treatments beginning January 1, 2014 and continuing at least through policy plan years 2017 and 2018. 1,2

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Public Funds Can Still Compete
Source: Aon Hewitt Retirement & Investment

Key Points

In past findings, public funds struggled to outperform endowments and foundations (E&Fs), as reported in our paper titled “Can Public Funds Compete?” dated Winter 2003/20041.

In a study conducted in 2011, we confirmed that public funds can compete with returns above E&Fs2.

An update on this study through 2016 concluded that public funds have continued to outperform E&Fs on average by 100 basis points over the last five years ending December 31, 2016.

Public funds had larger allocations to public equities—namely U.S. equities versus E&Fs, which has contributed to outperformance.

Public funds’ preference for private equity versus hedge fund exposure helped boost relative returns.

Public funds typically have a cost advantage given their size (economies of scale).

Past Studies

Our original 2003 research1 indicated that public funds underperformed E&Fs. In an update with data through 20112, a reversal occurred where public funds outperformed E&Fs, as shown below. We compared public funds to E&Fs given that, while they are very different in many areas, they are very similar in their total return approach to investing.

 

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2017 Public Pension Funding Study
Source: Milliman

The Milliman Public Pension Funding Study annually explores the funded status of the 100 largest U.S. public pension plans and reports the plan sponsor’s own assessment of how well funded a plan is. As of June 30, 2017, the aggregate funded ratio is estimated to be 70.7% as assets experienced healthy growth. Market performance since the last fiscal year ends have been strong, and we estimate that aggregate plan assets have jumped to $3.44 trillion as of June 30, 2017.

 

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IPPFA Regional Seminar – Jumer’s Hotel/Casino Rock Island – Registration Now Open
Source: IPPFA

Come join the IPPFA for a regional seminar being held at Jumer’s Hotel/Casino Rock Island, Illinois.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

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“How Have Municipal Bond Markets Reacted to Pension Reform?”
Source: Center for Retirement Research

 

The brief’s key findings are:

  • Bond rating agencies have begun accounting for public pension funding and have cited pensions in several downgrades.
  • As a result, state and local governments see that their pension finances could threaten their ability to borrow at affordable rates.
  • This study examines the impact of both pension finances and pension reforms on borrowing costs from 2009 to 2014.
  • The results show that a higher ratio of unfunded pension liability to government revenue is related to increased borrowing costs.
  • Pension reforms appear to reduce borrowing costs but the result is not statistically significant, perhaps because those making changes also had poor general finances.

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IPPFA Regional Seminar – NIU Hoffman Estates Campus – Registration Now Open
Source: IPPFA

Come join the IPPFA for a regional seminar being held at NIU Campus in Hoffman Estates, Illinois.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

Register NOW

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