Northrop Grumman Corporation

Northrop Grumman's pension plan is a defined benefit plan. This plan type provides a monthly retirement benefit and in some cases a lump sum using the Northrop Grumman segment rates that is adjusted for early retirement using age penalties to Northrop Grumman employees upon reaching a specific age.

At the time of retirement, benefits from Northrop Grumman pension plans are calculated using a formula based on Northrop Grumman's compensation information and Northrop Grumman years of credited service. Upon reaching 'normal retirement age', benefits are paid to the contributor for the remainder of their lifetime. Benefits that are accumulated under this plan type are often referred to as 'accrued benefits'. In this plan type, the Northrop Grumman alternate payee may be given a lump sum cash payment from the Plan. They also are able to receive a monthly benefit payable for either the lifetime of the Contributor (a 'shared payment') or the Alternate Payee (a 'separate interest') as an alternative to the Northrop Grumman lump sum.

A lump sum cash payment from the plan is typically not granted to the alternate payee under this kind of arrangement. Instead, the alternate payee's award is usually issued as a monthly benefit payable to the alternate payee (a "separate interest") or the participant for the duration of the participant's life (a "shared payment").

Features of the Northrop Grumman benefit plan may include:

1. You may have benefits accrued under this plan maybe pay related

2. You may have benefits accrued under this plan maybe "flat dollar" (includes dollars per year of service)

3. It's also possible that you have a "Cash Balance" or comparable plan, in which case benefit calculations are made using the "cash balance" formula. For the purposes of this analysis, a "cash balance" formula is a benefit formula found in any defined benefit plan, including personal account plans, pension equity plans, life cycle plans, cash account plans, etc.; instead of, or in addition to, expressing the accrued benefit as a life annuity beginning at normal retirement age, the "cash balance" formula defines benefits for each employee using terms more familiar to defined contribution plans, like "single sum distribution amount" (10 percent of final average pay times years of service, or the amount of the employee's hypothetical account balance).

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Northrop Grumman Healthcare Basics

Northrop Grumman and Miscellaneous Employer-Sponsored Health Insurance

Northrop Grumman and employer-sponsored health insurance is a health policy selected and purchased by your employer or Northrop Grumman and offered to eligible employees and their dependents. These are also called group plans or Northrop Grumman group health insurance.  Depending on where you work your employer, if not Northrop Grumman, will typically share the cost of your premium with you. 

Advantages of an employer plan:

1. Your employer often splits the cost of premiums with you.

2. All of the effort in selecting the plan options is done by your employer.

3. Employer premium contributions are tax-free at the federal level, and you have the option to make pre-tax contributions to reduce your taxable income.

Miscellaneous Employer and Northrop Grumman Health Insurance Plan Types and Definitions

It has been reported that just over 200 million Americans have health insurance coverage from commercial or private market health insurance.  Over the past 30 years, the financial and legal structure of such insurance has varied. No one "model" has dictated the market, although there are strong trends -- from the original "indemnity" or fee-for-service approach of 25 years ago, to HMOs (Health Maintenance Organizations) in the 1990's, to "Preferred Provider Organizations" (PPOs) in the past ten years. 

The specific terms and structures can be confusing to employers, Northrop Grumman enrollees, and even policymakers.  The summary definitions below were compiled and promulgated by the United States Department of Labor.  NCSL has added notations in selected cases, with source footnotes.

The Federal Health Reform Law:  The Affordable Care Act of 2010 (ACA), which modified the nature and scope of health insurance coverage at Northrop Grumman and other employer-sponsored plans, is a federal health reform law with many features.

According to the Act, the Secretary [of Health and Human Services] is responsible for defining the fundamental health benefits for a number of different health plans. The Act also directs the Secretary to guarantee that the range of benefits offered under the Act is equivalent to that of a standard employment plan. According to the Act, the Secretary of Labor must survey employers offering employer-sponsored insurance to ascertain the benefits that are normally provided by employers. The Secretary of Health and Human Services must be informed of the survey's findings.

Basic Type of health Insurance at Northrop Grumman

Indemnity plan - A kind of health plan that pays out payments to the patient and/or healthcare provider as they are incurred.

Conventional indemnity plan - An indemnification that lets the member select any provider without affecting their ability to get reimbursed. These programs pay out as costs are incurred to the patient and/or provider.

Preferred provider organization (PPO) plan - An indemnity plan in which members receive coverage via a network of pre-selected healthcare providers (doctor offices and hospitals, for example). Enrollees who choose to travel outside the network will pay more because they will have to pay higher deductibles, higher coinsurance rates, or non-discounted provider charges.

Exclusive provider organization (EPO) plan - A more restrictive type of preferred provider organization plan under which employees must use providers from the specified network of physicians and hospitals to receive coverage; there is no coverage for care received from a non-network provider except in an emergency situation.

Health maintenance organization (HMO) - A health care system that assumes both the financial risks associated with providing comprehensive medical services (insurance and service risk) and the responsibility for health care delivery in a particular geographic area to HMO members, usually in return for a fixed, prepaid fee. Financial risk may be shared with the providers participating in the HMO.

Group Model HMO - An HMO that contracts with a single multi-specialty medical group to provide care to the HMO membership. The group practice may work exclusively with the HMO, or it may provide services to non-HMO patients as well. The HMO pays the medical group a negotiated, per capita rate, which the group distributes among its physicians, usually on a salaried basis. HMO's can be broken down into, Staff Model HMO, Network Model HMO , Individual Practice Association (IPA) HMO

Point-of-service (POS) plan - A POS plan is an "HMO/PPO" hybrid; sometimes referred to as an "open-ended" HMO when offered by an HMO. POS plans resemble HMOs for in-network services. Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans (e.g., provider reimbursement based on a fee schedule or usual, customary and reasonable charges).

Physician-hospital organization (PHO) - Alliances between physicians and hospitals to help providers attain market share, improve bargaining power and reduce administrative costs. These entities sell their services to managed care organizations or directly to employers.

Medigap Supplemental Plans - Roughly 10 million Medicare beneficiaries purchase Medigap policies from private insurance companies, at a cost that ranges from approximately $1,000 to $5,000 per year, depending on the options available in the plan and the state of purchase. Studies have shown that Medigap policy holders use more medical services than those enrolled in traditional Medicare alone, primarily because the most popular Medigap plans provide "first-dollar" coverage. This means that Medigap actually pays the Medicare deductibles, copayments, and other expenses that beneficiaries are typically required to pay as a means of spreading the cost burden and reining in unnecessary use of services. [Medigap from Health Affairs, 9/11]