IN THIS ISSUE
• SECURE 2.0: Operational Guidance for 2024
• Limits on Eligibility for Purchase of Permissive Service Credit
• Return to Work After Retirement Considerations
• No Surprises Act Update
• Tri-Agencies Request for Information Regarding Coverage of Over-the-Counter Preventive Services
• Recent Court Ruling Impacts Whether Plans Must Count Drug Coupons Towards the MOOP
On January 17, 2024, the American Academy of Actuaries (AAA) released its issue brief, An Actuarial Perspective on the 2023 Social Security Trustees Report. The brief was developed by the AAA’s Social Security Committee and presents the Committee’s perspective regarding the 2023 Trustees Report, which examines the Social Security program’s long-term solvency issues.
Importantly, the Trustees Report reflects the recent reduction in the assumed level of economic growth. The cumulative reduction of about 3% affects the system by suppressing realized and projected increases in payroll tax income. According to the report, “In addition to the economic results, the system’s financial status was affected by changes in demographic assumptions and methodology, and by the shift in the valuation period (which adds a year of less favorable finances at the end of the 75-year projection period).”
The key findings include:
Congress is urged to act to ensure the sustainable solvency of the Social Security program.
The AAA’s Social Security Committee prepared this issue brief. Brian Murphy, a retired senior consultant and past president of GRS, serves on this committee.
The brief is available here.
Recently, the Centers for Medicare & Medicaid Services (CMS) released their report on the National Health Expenditure Accounts (NHEA). The NHEA measures annual U.S. expenditures for health care goods and services, public health activities, government administration, net cost of health insurance, and investments related to health care.
According to the CMS, U.S. health care spending grew 4.1% in 2022 and reached $4.5 trillion, which was faster than the increase of 3.2% in 2021, but much slower than the increase of 10.6% in 2020. As a share of the gross domestic product (GDP), health care spending increased 9.1% in 2022.
In 2022, health care spending for the broad categories of services and products include:
In 2022, the growth in federal government spending increased 1.0%, compared to a decrease of 3.4% in 2021. Private businesses’ health care spending increased 6.0% in 2022, down from 7.6% in 2021; households’ health care spending increased 6.9% in 2022, up slightly from 6.8% in 2021; and state and local government health care spending increased 6.5% in 2022, up slightly from 6.2% in 2021.
Further information is available here.
On January 9, 2024, the MissionSquare Research Institute (formerly the Center for State and Local Government Excellence at ICMA-RC or SLGE) released information related to its report, Top Public Service Workforce Trends for 2024. The Institute researched how public sector employers can manage and support their current workforce, as well as attract new talent.
According to the report, although 2023 has been challenging for state and local governments and other public service organizations, it has helped leaders gain insights on workforce management systems and support while attracting new talent. The report provides various strategies and actions that public service employers can take to be “employers of choice” and help to improve retention and recruitment. Based on their research, the key workforce trends to monitor in 2024 include:
According to the Institute, “The demographics and size of the public workforce continues to evolve, particularly with generational change, increased diversity, the impacts of automation, and heightened competition for talent. Paying attention to the trends…can help employers optimize recruitment and retention.”
Further information is available here.
On January 4, 2024, S&P Global Ratings published its report, U.S. States 2024 Outlook: Credit Stability Endures in Unstable Times. In fiscal 2024, states are expected to experience slower economic growth and likely decreased revenues. S&P Global indicated that states’ credit fundamentals seem strong; however, the fiscal 2025 budget considerations will likely focus on managing increasing costs, lessening federal government support and potential tax policy changes that may further negatively affect revenues.
According to the report, “Through the pandemic, states maintained better funding discipline, which has resulted in an overall strengthening of the long-term funding progress and a lessening of the risks associated with statewide pension plans. Pension and other postemployment benefits liabilities are not evenly distributed by state, with many having well-funded statewide plans. Pension risks remain for some, though, and OPEB are largely being funded on a pay-as-you-go basis, meaning pension and OPEB funding and risk management will remain key components of our fixed-cost analysis.”
The report is available here.