Health Net 2004 Annual Report Download - page 115

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
covers key executives as selected by the Board of Directors. Benefits under the plan are based on years of service and level of
compensation during the final five years of service.
Postretirement Health and Life Plans—Certain of our subsidiaries sponsor postretirement defined benefit health care and life
insurance plans that provide postretirement medical and life insurance benefits to directors, key executives, employees and
dependents who meet certain eligibility requirements. The Health Net health care plan is non-contributory for employees retired prior
to December 1, 1995 who have attained the age of 62; employees retiring after December 1, 1995 who have attained age 62 contribute
from 25% to 100% of the cost of coverage depending upon years of service. We have two other benefit plans that we have acquired as
part of the acquisitions made in 1997. One of the plans is frozen and non-contributory, whereas the other plan is contributory by
certain participants. Under these plans, we pay a percentage of the costs of medical, dental and vision benefits during retirement. The
plans include certain cost-sharing features such as deductibles, co-insurance and maximum annual benefit amounts which vary based
principally on years of credited service.
The following table sets forth the plans’ obligations and funded status at December 31 (amounts in thousands):
Amounts recognized in our consolidated balance sheets as of December 31 consist of (amounts in thousands):
F-29
Pension Benefits
Other Benefits
2004 2003
2004
2003
Change in benefit obligation:
Benefit obligation, beginning of year
$17,290
$14,966
$9,464
$6,730
Service cost
947
810
362
449
Interest cost
1,017
959
467
528
Benefits paid
(671)
(663)
(283)
(250)
Actuarial loss (gain)
1,899
1,218
(1,504)
2,007
Benefit obligation, end of year
$20,482
$17,290
$8,506
$9,464
Chan
g
e in fair value of
p
lan assets:
Plan assets, beginning of year
$—
$—
$—
$—
Employer contribution
671
663
283
250
Benefits paid
(671)
(663)
(283)
(250)
Plan assets, end of year
$
$
—
$
—
$
Funded status
$(20,482)
$(17,290)
$(8,506)
$(9,464)
Unrecognized net (gain) loss
(305)
(2,291)
275
1,808
Unrecognized prior service cost
2,663
3,122
224
254
Net amount recognized
(18,124)
(16,459)
(8,007)
(7,402)
Pension Benefits
Other Benefits
2004
2003
2004
2003
Prepaid benefit cos
t
$
$
—
$
—
$
Accrued benefit cos
t
(18,527)
(16,928)
(8,007)
(7,402)
Accumulated other comprehensive income
403
469
—
Net amount recognized
(18,124)
(16,459)
(8,007)
(7,402)