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EMPLOYEE BENEFITS

Managing Health-Care Costs

Chart illustrating how small and midsize companies reduce their health-care costs.
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A recent survey of small and midsize companies showed that the average increase in health-care costs among them fell from 22% in 1993 to 14% in 1994. Here's what those companies did to reduce the tab:

Percentage of

Cost-reduction strategy respondents who used it

Changed insurance companies 40%

Changed to policy with higher deductible 36%

Switched to HMO or PPO plan 26%

Increased employee's contribution 25%

Changed to policy with higher copayments 22%

Reduced benefits offered 16%

Instituted wellness programs 9%

Switched to self-insurance 9%

Switched to cafeteria-style plan 6%

Dropped coverage 4%

Instituted managed care 2%

Other 8%

Source: "Survey of Small and Mid-Sized Businesses," Arthur Andersen & Co.'s Enterprise Group, Chicago, and National Small Business United, Washington, D.C., 1994.




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