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Conventional health care plans in rapid decline.

A national survey of 1,057 employer-sponsored health plans conducted by KPMG Peat Marwick found 62% of the companies polled continued to offer conventional health coverage in 1992, down sharply from 89% in 1988.

For the first time a majority of the workers in the surveyed companies (55%) were enrolled in a managed-care health plan, defined as a health maintenance organization (HMO), preferred provider organization (PPO) or point-of-service (POS) plan. (POS plans are essentially PPOs with cost controls, such as the presence of primary care physicians and strong incentives to use preferred providers.) Enrollments in conventional plans have dwindled as employers struggle to control rising health care costs through higher deductibles and premium contributions.

Combined PPO and POS plan enrollments rose to 34% of the surveyed workers, compared to 24% in 1991. Flexible benefit programs, in which employers pay for a core package and the employees pay for extra benefits with pretax dollars, also gained in popularity. In 1992, 43% of employers offered a flexible benefit plan, up from 37% in 1991.

Workers in all types of plans paid an increased share of the cost of health coverage in 1992. Employer-sponsored health insurance costs rose 11% between spring 1991 and spring 1992, the lowest annual increase since 1986-87, but three times the overall inflation rate.
COPYRIGHT 1993 American Institute of CPA's
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Accountancy
Article Type:Brief Article
Date:Feb 1, 1993
Words:215
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