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HEALTH CARE BENEFITS SHIFT, SAYS PRICE WATERHOUSE

 WASHINGTON, Dec. 2 /PRNewswire/ -- Certain medical liabilities from employer-sponsored group health plans will shift to Medicare, Price Waterhouse benefits officials said.
 The change, effective with the Aug. 10 signing of the 1993 Tax Act, means an immediate cash flow savings after it is implemented, said Elaine Church, a benefits advisor with Price Waterhouse in Washington.
 "To take advantage of the savings, affected employers should not wait to revise their plans and claims procedures, ensuring appropriate costs are shifted to Medicare," Church said.
 Additionally, the change may cut financial accounting standard costs for certain employers because continued medical benefits are generally post-employment benefits required to be accrued under FAS 112 after 1993.
 Specifically, HCFA confirmed provisions redefining disabled active individuals, make it clear employer-sponsored plans will be primary for individuals of Medicare disability benefits, only if the recipient is actually working.
 Effective Aug. 10, the previous law no longer applies requiring employers who otherwise treated a disabled individual as an active worker, to assume primary liability for promised medical benefits.
 For example, continuing a pension or vacation pay accruals, preserving the person's job and providing medical benefits under a plan that also covers active employees, will not result in primary liability.
 For companies adopting FAS 112 next year, the change will reduce the costs recognized at transition, as well as on-going annual changes.
 Those companies who shifted to FAS 112 will see immediate benefit -- an increase in bottom line through reversal of a prior earnings charge.
 Price Waterhouse is committed to providing the ideas, information and advice that will help clients make better business decisions. Through a global network of firms practicing in 117 countries and territories, Price Waterhouse employees work together to provide accounting, auditing, tax planning and compliance, management and technology consulting, litigation support and business advisory services to corporations, individuals, nonprofit organizations, and government departments and agencies. The U.S. firm, with 106 offices and 12,995 men and women, is a vital part of the Price Waterhouse worldwide network.
 -0- 12/2/93
 /NOTE TO EDITORS: More information on the change is available by calling the contact below./
 /CONTACT: Betsy Freeman, marketing communications manager of Price Waterhouse, 202-728-9781/


CO: Price Waterhouse ST: District of Columbia IN: HEA SU:

IH-DS -- DC023 -- 9920 12/02/93 15:28 EST
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Publication:PR Newswire
Date:Dec 2, 1993
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