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FORBES PAYS EMPLOYEES TO STAY WELL--AND IMPROVES THEIR FINANCIAL HEALTH

 NEW YORK, Jan. 14 /PRNewswire/ -- In the current (Jan. 18) issue of FORBES magazine, President and Editor-in-Chief Malcolm S. (Steve) Forbes Jr. details the success of the company's goundbreaking medical benefits program -- which keeps down health insurance claims by paying employees not to make them.
 "Our program has national implications," Forbes writes in the column, "Fact and Comment." "Other approaches are top-down. They depend on bureaucrats, insurers and employers to control costs."
 The FORBES incentive program -- one year in operation -- has reduced insurance premiums 10 percent at a time when corporate health insurance costs are rising an average of 20 to 25 percent.
 "Like numerous other companies, we were hit with major hikes in our health insurance premiums...Our solution was to reward those who stay healthy and who avoid filing claims for routine medical expenses," Forbes explains.
 "Here's how it works: If someone's claims for the calendar year are under $500, we not only pay him or her the difference between that total and the $500 but we also double it." Employees, he adds, pay no taxes on this bonus.
 To give examples of the possible reward: A FORBES employee who submits medical expenses of just $200 stands to receive $600 (the $500 threshold minus $200 equals $300; $300 times two equals $600).
 A FORBES employee with $900 in annual medical expenses who doesn't submit any claims for reimbursement will receive $1,000 -- $500 times two -- a net gain of $100.
 Forbes developed the incentive program as a free-market solution to the problem of spiraling health care costs. Another management innovation instituted last year: an insurance deductible fixed at 1 percent of an employee's salary.
 Explains Forbes: "Why should a security guard pay the same deductible as an executive? The more you earn, the more you pay. Isn't that a fairer approach?"
 -0- 1/14/93
 /CONTACT: Elizabeth Ames of FORBES magazine, 212-620-2398/


CO: Forbes magazine ST: New York IN: PUB SU:

TM-OS -- NYFNS2 -- 4678 01/14/93 07:31 EST
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Date:Jan 14, 1993
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