Hospital returns to social security but retains alternative benefits plan.

Abstract

When passage of the Social Security Amendments of 1983 required Holy Redeemer Hospital to return to the Social Security system on Jan. 1, 1984, the hospital examined alternatives to nonprofit hospitals' mandatory participation in the program. With a consortium of hospitals, it launched an unsuccessful lobbying effort to convince Congress to accept other options: deferring the return for several years, exempting hospitals that had left the system, or "grandfathering" nonprofit hospitals' employees. By Oct. 31, 1983, the hospital decided to forgo efforts to amend the legislation and made preparations for returning to the system. Employees were notified that they could continue to participate in the alternate plan (a tax-deferred annuity) or leave their account inactive until withdrawal at retirement. The plan's provisions that allowed withdrawals only under extraordinary circumstances were amended to permit withdrawals at any time. In addition, the administration introduced flexible benefits--a "cafeteria plan"--to allow participants to choose among certain taxable and nontaxable benefits that best fit each individual's life-style.