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Vol. 79, No. 2, March 2025
FEATURED ARTICLES
The Health Care Benefit Crisis, Twenty Years Later: Part 1
Eric Parmenter, PhD, MBA, CEBS, SPHR, REBC, RHU, CLU, ChFC, LUTCF
Amer Haffar, MBA
Irena Kaplan
Caitlin Hohman, PharmD
Twenty years have passed since the article, "Health Care Benefit Crisis: Cost Drivers and Strategic Solutions,” appeared in this Journal (Parmenter, Journal of Financial Service Professionals 58, no. 4 (2004): 63-78). And nearly 10 years have passed since Part 1 and Part 2 of "The Health Care Benefit Crisis, Ten Years Later,” were published in 2015 (Parmenter, Journal of Financial Service Professionals 69, no. 2 and no. 3 (2015): 67-83; 83-91), evaluating the state of employer-sponsored self-funded health benefits in the decade from 2004 to 2014. In this current three-part series, Part 1 examines the drivers of cost articulated in the previous articles and discusses how those drivers have evolved over the past two decades while new drivers have emerged. Part 2 summarizes the viewpoints of employers, employees, and consultants from survey data, along with contemporary employer actions. Part 3 proposes a new set of legislative initiatives that align incentives to improve the cost and quality of health care for key stakeholders.
Velocity Banking: Financial Shortcut or Potential Pitfall
Karen Ann Craig, PhD
Connor Duncan
Velocity banking is a strategy that can be employed to accelerate mortgage payoff and potentially reduce the overall cost of homeownership. This approach requires discipline and careful planning, as demonstrated by the various scenarios explored in this study. However, it is important to note that velocity banking may not be suitable for everyone, particularly those who lack financial discipline or have limited credit access.
DEPARTMENTS
Advice for the Young Planner
The Widow Tax: Adding More Pain to an Already Painful Time
Matthew M. Stranix, CFP, RICP
While no asset type is inherently “better” than another, each asset type boasts different tax advantages that may be beneficial to the owner throughout different periods of their lives. If clients employ a better asset location strategy throughout their working lives, they may be able to reduce cumulative required minimum distributions in retirement, providing the clients with more freedom and flexibility surrounding income generation after a death.
Economics & Investment Management
Buffer Funds to the Rescue?
Kenneth Washer, DBA, CFA, CFP
Todd C. Darnold, PhD
Buffered funds can be used by advisors who want to reduce risk in client portfolios but still seek exposure to equity markets. These funds are a type of structured product and can be complex, with features that vary depending on the specific fund.
Entrepreneurship
Small-Business Certifications
Kevin Tacchino, MSTFP
As planners work with their small-business owner clients, they may be asked about becoming certified as a specific category of business. While there are many benefits and opportunities that come with certifications, planners can create value for their clients by helping them choose a path that aligns most closely with their goals and objectives, thereby avoiding unnecessary fees, time, and energy.
Estate Planning
Post-Election Tax Landscape—Don’t Relax!
Mark R. Parthemer, JD, AEP, ACTEC Fellow
The last eight major tax reform laws happened in year one of a president's term when there was a unified government. This year, 2025, could be a year when we see the next one. That said, there is embedded risk on relying on future tax law changes. So, until a law is enacted, advisors should continue to urge clients to plan for sunset.
Insurance & Risk Management
Important Life Insurance Funding Considerations
Todd L. Laszewski, FSA, CLU, MS, MAAA
This column explores several important practical considerations associated with various funding levels of life insurance policies that rely on nonguaranteed factors (interest, mortality, expenses) to sustain the policy for the insured’s lifetime.
Social Security Planning
Social Security Fairness Act
Bruce D. Schobel, FSA, MAAA, CLU, CEBS
On January 5, 2025, President Biden signed into law the Social Security Fairness Act, which repealed two special calculation rules that applied only to government retirees with pensions based on employment that was not covered by Social Security. This law, which was rushed through the last Congress in its final days, reversed almost half a century of careful Social Security policymaking without hearings or any other action by the committees with jurisdiction over Social Security. The law will add $200 billion to Social Security's benefit payments over the next 10 years and advance the trust fund depletion date by almost a year.
