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VICTORIA – Government and the Healthcare Benefit Trust (HBT) will work together to implement key recommendations of an independent review to improve HBT's fiscal performance and accountability, and address the rising cost of health and welfare benefit claims, Finance Minister Gary Collins announced today.
Under Generally Accepted Accounting Principles the assets, liabilities and debt of the schools, universities, colleges and health authorities (SUCH) sector must be included in government's statement of financial position. Full inclusion of the SUCH sector in its accounting entity has improved government’s ability for early identification and management of potential unfunded liabilities within the sector.
HBT's unfunded liability is primarily due to the future benefit costs of the long-term disability claims of eligible employees of participating employer groups, and the reduced investment returns experienced by HBT during the significant decline of investment markets in 2001 and 2002.
Independent consultant Deloitte & Touche has prepared a number of recommendations to address high claims costs and the unfunded liability. Government and HBT will work to:
· Ensure the HBT board includes more representation from member employer groups. · Segregate the large employers (Health Authorities) from small employers, which will allow a better matching of the unfunded liability with the employers' claims experience and contribution rates. · Support a Public Sector Employers’ Council (PSEC) review of the rising costs of benefits in the broad public sector, and develop strategies to address them as well as review long-term disability claims management.
The unfunded liability has already been fully disclosed in Balanced Budget 2004 and has been accommodated in government's three-year fiscal plan and projected surpluses. B.C.’s Health Authorities are responsible for approximately 80 per cent of the liability, and will therefore record their share of the liability in their 2003/04 financial statements. A significant portion of the liability will be attributed to prior years since it was during those years that the liability accrued. The balance of the liability has been accounted for by other participating HBT employers and the Province of B.C.
HBT was formed 25 years ago to provide group health and welfare benefits to eligible healthcare employees and their dependents. It currently administers benefits for over 800 employers, including the six Health Authorities and some Community Social Service Employers' Association agencies. They include acute care and long-term care hospitals, community care, social service agencies, and specialty organizations within the health care and community care sectors. Over 80,000 employees participate in HBT health and welfare plans.
A provincial action plan and HBT's response to the report's recommendations are available at: www.fin.gov.bc.ca/hbt_app_E.pdf
The full report is available at: www.fin.gov.bc.ca/hbt_report.pdf
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