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Postretirement Benefits Other Than Pensions | 12 Months Ended
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Dec. 31, 2018
Other Postretirement Benefit Plan, Defined Benefit [Member] |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] |
Postemployment Benefits Other Than Pensions | NOTE 17. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS Kemper and Infinity sponsor other than pension postretirement employee benefit plans (“OPEB”) that together provide medical, dental and/or life insurance benefits to approximately 700 retired and 600 active employees. Kemper has historically self-insured the benefits under the Kemper OPEB Plan. The Kemper medical plan generally provides for a limited number of years of medical insurance benefits at retirement based on the participant’s attained age at retirement and number of years of service until specified dates and generally has required participant contributions, with most contributions adjusted annually. On December 30, 2016, Kemper amended the Kemper OPEB Plan and, effective December 31, 2016, will no longer offer coverage to post-65 Medicare-eligible retirees and Medicare-eligible spouses under the self-insured portion of its coverage. Rather, beginning on January 1, 2017, the Kemper OPEB Plan offers access to a private, third-party Medicare exchange and provides varying levels of a Company-determined subsidy via health reimbursement accounts to certain Medicare-eligible retirees and spouses in order to help fund a portion of the participants’ cost. Further, the amendment eliminates the requirement for such participants to contribute to the Kemper OPEB Plan. In conjunction with the amendment, the Company recorded a pre-tax reduction to its Accumulated Postretirement Benefit Obligation of $11.0 million through Other Comprehensive Income. This prior service credit is being amortized into income over the remaining average life of the Kemper OPEB Plan’s participants. Changes in Fair Value of Plans’ Assets and Changes in Accumulated Postretirement Benefit Obligation for the years ended December 31, 2018 and 2017 were:
DOLLARS IN MILLIONS |  |
2018 |  | 2017
Fair Value of Plans’ Assets at Beginning of Year |  | $ | — |  |  | $ | — |
Employer Contributions |  | 1.1 |  |  | 0.9 |
Plan Participants’ Contributions |  | 0.3 |  |  | 0.5 |
Benefits Paid |  | (1.4 | ) |  | (1.4 | )
Fair Value of Plan Assets at End of Year |  | — |  |  | — |
Accumulated Postretirement Benefit Obligation at Beginning of Year |  | 14.4 |  |  | 15.1 |
Obligation from Acquisition of Infinity |  | 3.9 |  |  | — |
Service Cost |  | 0.2 |  |  | 0.1 |
Interest Cost |  | 0.4 |  |  | 0.4 |
Plan Participants’ Contributions |  | 0.3 |  |  | 0.5 |
Benefits Paid |  | (1.4 | ) |  | (1.4 | )
Medicare Part D Subsidy Received |  | 0.2 |  |  | 0.2 |
Actuarial Gain |  | (3.0 | ) |  | (0.5 | )
Accumulated Postretirement Benefit Obligation at End of Year |  | 15.0 |  |  | 14.4 |
Funded Status—Accumulated Postretirement Benefit Obligation in Excess of Plans’ Assets |  | $ | (15.0 | ) |  | $ | (14.4 | )
Unamortized Actuarial Gain Reported in AOCI at End of Year |  | $ | 24.9 |  |  | $ | 25.0 |
The measurement dates of the assets and liabilities at end of year in the preceding table under the headings “2018” and “2017” were December 31, 2018 and December 31, 2017, respectively. The weighted-average discount rate and rate of increase in future compensation levels used to develop the components of the Accumulated Postretirement Benefit Obligation at December 31, 2018 and 2017 were:
|  | 2018 |  | 2017
Discount Rate |  | 4.02 | % |  | 3.36 | %
Rate of Increase in Future Compensation Levels |  | 2.20 |  |  | 2.20 |
NOTE 17. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (Continued) The assumed health care cost trend rate used in measuring the Accumulated Postretirement Benefit Obligation at December 31, 2018 was 7.50% for 2019, gradually declining to 4.8% in the year 2025 and remaining at that level thereafter for medical benefits and 10.00% for 2019, gradually declining to 4.8% in the year 2026 and remaining at that level thereafter for prescription drug benefits. The assumed health care cost trend rate used in measuring the Accumulated Postretirement Benefit Obligation at December 31, 2017 was 7.5% for 2018, gradually declining to 4.8% in the year 2025 and remaining at that level thereafter for medical benefits and 10.0% for 2018, gradually declining to 4.8% in the year 2026 and remaining at that level thereafter for prescription drug benefits. A one-percentage point increase in the assumed health care cost trend rate for each year would have increased the Accumulated Postretirement Benefit Obligation at December 31, 2018 by $0.8 million and 2018 OPEB expense by an insignificant amount. A one-percentage point increase in the assumed health care cost trend rate for each year would have increased the Accumulated Postretirement Benefit Obligation at December 31, 2017 by $0.6 million and 2017 OPEB expense by an insignificant amount. The components of Comprehensive OPEB Expense (Income) for the years ended December 31, 2018, 2017 and 2016 were:
DOLLARS IN MILLIONS |  | 2018 |  | 2017 |  | 2016
Service Cost Earned During the Year |  | $ | 0.2 |  |  | $ | 0.1 |  |  | $ | 0.1 |
Interest Cost on Accumulated Postretirement Benefit Obligation |  | 0.4 |  |  | 0.4 |  |  | 0.8 |
Amortization of Prior Service Credit |  | (1.3 | ) |  | — |  |  | — |
Amortization of Accumulated Unrecognized OPEB Gain |  | (1.8 | ) |  | (1.8 | ) |  | (1.4 | )
OPEB Income Recognized in Consolidated Statements of Income |  | (2.5 | ) |  | (1.3 | ) |  | (0.5 | )
Unrecognized OPEB Loss (Gain) Arising During the Year |  | (3.0 | ) |  | (0.5 | ) |  | (1.3 | )
Prior Service Credit Arising During the Year from Plan Amendments |  | — |  |  | (1.3 | ) |  | (11.0 | )
Amortization of Prior Service Credit |  | 1.3 |  |  | — |  |  | — |
Amortization of Accumulated Unrecognized OPEB Gain |  | 1.8 |  |  | 1.8 |  |  | 1.4 |
Comprehensive OPEB Expense (Income) |  | $ | (2.4 | ) |  | $ | (1.3 | ) |  | $ | (11.4 | )
The Company estimates that OPEB Expense for the year ended December 31, 2019 will include income of $3.3 million resulting from the amortization of the related accumulated actuarial gain and prior service credit included in AOCI at December 31, 2018. Effective January 1, 2016, the Company changed its method for estimating the interest and service cost components of expense recognized for its pension and other postretirement employee benefit plans. As a result, the Company elected to use a full yield curve approach to estimate these components of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. See Note 2, “Summary of Accounting Policies and Accounting Changes,” to the Consolidated Financial Statements for further discussion of the change. The weighted-average discount rate and rate of increase in future compensation levels used to develop OPEB Expense for the years ended December 31, 2018, 2017 and 2016 were:
|  | 2018 |  | 2017 |  | 2016
Weighted-average Discount Rate |  | 3.36 | % |  | 3.61 | % |  | 3.70 | %
Service Cost Discount Rate |  | 3.52 |  |  | 3.79 |  |  | 4.21 |
Interest Cost Discount Rate |  | 2.96 |  |  | 2.92 |  |  | 2.90 |
Rate of Increase in Future Compensation Levels |  | 2.20 |  |  | 2.60 |  |  | 2.64 |
The Company expects to contribute $1.7 million, net of the expected Medicare Part D subsidy, to its OPEB Plan to fund benefit payments in 2019. NOTE 17. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (Continued) The following benefit payments (net of participant contributions), which consider expected future service, as appropriate, are expected to be paid:
DOLLARS IN MILLIONS |  | Years Ending December 31,
2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024-2028
Estimated Benefit Payments: |  |  |  |  |  |  |  |  |  |  |  |
Excluding Medicare Part D Subsidy |  | $ | 1.7 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 6.2 |
Expected Medicare Part D Subsidy |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net Estimated Benefit Payments |  | $ | 1.7 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 1.6 |  |  | $ | 1.5 |  |  | $ | 6.2 |

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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. + References No definition available. + Details
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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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