Study examines local governments' responses to health-care costs, GASB 45.

• Position: News & Numbers - Governmental Accounting Standards Board - Survey

A new study looks at local governments' strategies for addressing health-care costs and their awareness of and response to Governmental Accounting Standards Board (GASB) Statement No. 45. The study, "Health and OPEB Funding Strategies: 2008 National Survey of Local Governments," from Cobalt Community Research, provides a snapshot of larger local governments balanced with the small local governments that make up more than 75 percent of local governments in the United States.

The research yields three main findings. First, few of the small local governments that responded to Cobalt's survey provide health care to their employees, and only a small percentage provide health care to retirees. This fact is not surprising because most governments with populations of fewer than 5,000 do not have many (or any) full-time employees. For larger local governments, about 90 percent of active employees have health-care coverage, and 50 percent of retirees are covered. Second, many local governments that provide health-care coverage have made changes to co-pays and deductibles, but additional cost-reduction strategies could help limit future expenses. Third, 74 percent of local governments that provide retiree health care are aware of the GASB 45 requirements, and 46 percent have already calculated their liabilities or are in the process of doing so. However, many governments have not made decisions about funding and effective tools for reducing and funding the future...