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LACK OF BENEFITS MAY INFLUENCE JOB CHANGES, SAYS NEW SURVEY

 LACK OF BENEFITS MAY INFLUENCE JOB CHANGES, SAYS NEW SURVEY
 NEW YORK, Dec. 4 /PRNewswire/ -- Individuals may find themselves


unable to change jobs because a prospective employer won't provide insurance coverage for pre-existing illnesses, based on the results of a new survey by international accountants and consultants KPMG Peat Marwick. The survey found that up to 68 percent of workers in large and mid-sized companies are subject to pre-existing clauses.
 The typical pre-existing condition clause excludes an employer or insurer from covering pre-existing illnesses for either the first six to 12 months of employment. According to the survey, employees in the South (up to 90 percent) and West (up to 80 percent) are subject to these clauses more frequently. It's least common in the Northeast where only 50 percent of workers are subject to pre-existing clauses.
 "Exclusion of coverage of a few seriously sick employees or their dependents saves employers many dollars in present and future health care expenses," explained Roy Oliver, KPMG Peat Marwick's director of benefits and compensation. "But pre-existing condition clauses have serious ramifications for employees, who may find themselves locked in a job because they can't afford to take on the greater financial risk when the coverage is not available at another job."
 The following are highlights of Peat Marwick's survey of human resource directors at more than 1,000 private and public companies on their health benefit plans.
 Most Plans Restricting Mental Health Care Benefits
 -- Employers are restricting mental health benefits more than others. Seventy-three percent of conventional and 58 percent of PPO plans do not include mental health expenses in calculating maximum out-of-pocket limits. Plans may also restrict the number of outpatient visits, inpatient days or inpatient dollars that the mental health benefits cover.
 -- HMO plans tend to restrict mental health benefits more than conventional and PPO plans. Over 80 percent of HMO subscribers have limits on the number of covered outpatient visits -- with 20 annual visits the typical limit.
 -- To control the use of mental health services, employers have imposed higher cost-sharing on mental health benefits than medical surgical benefits.
 Other findings of the study:
 -- The use of flexible spending accounts has increased dramatically over the past five years, from 5 percent of employees to 60 percent in 1991. Cafeteria plans now cover 23 percent of plans.
 -- Self-funding increased in conventional and Planned Provider Options plans between 1988 and 1991, particularly among large (1,000 to 4,999 workers) and jumbo employers (5,000 plus workers). For conventional plans, the percentage of large employers choosing to self-insure grew from 83 percent to 90 percent among large employers, and 81 to 97 percent among jumbo employers.
 -- About half the companies with between 200 and 999 employees offered retiree health benefits in their conventional plans, as compared to 72 percent of companies with 5,000 or more workers.
 "Despite some disturbing information," said Oliver, "survey results tell us that employers are not turning to Draconian measures to manage health care costs, and plan to make only modest changes in their plans during the next year."
 Based on the survey results, Oliver predicts that Americans will experience more managed care, only modest increases in cost-sharing and more restrictions in mental health benefits. "Whether these initiatives will be sufficient to thwart underlying health care cost trends will be known only in the future," he said.
 For further information about the findings of the study, or for a copy of the executive summary, write to Jon Gabel, KPMG Peat Marwick, 2001 M Street, NW, Washington, DC 20036-3310.
 KPMG Peat Marwick provides accounting, auditing, tax, and management consulting services to leading businesses, governmental and private institutions, and individuals, through 135 offices in the United States. It is the U.S. practice of KPMG, which has operations in more than 120 countries and posted 1990 revenues of $5.4 billion.
 -0- 12/4/91
 /CONTACT: Lisa Meyer of KPMG Peat Marwick, 201-307-7763/ CO: KPMG Peat Marwick ST: New York IN: SU: ECO


GK-SH -- NY038 -- 9162 12/04/91 11:32 EST
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Date:Dec 4, 1991
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