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LARGER COMPANIES MORE LIKELY THAN SMALLER COMPANIES TO OFFER FLEXIBLE BENEFIT PLANS AS METHOD TO CONTAIN BENEFIT COSTS

 NEW YORK, May 13 /PRNewswire/ -- Larger companies are more likely than smaller companies to utilize flexible benefit plans as a means to help contain some of the high costs associated with providing group benefits, according to a newly released nationwide study of 541 companies encompassing every major economic sector conducted by Coopers & Lybrand, the international accounting and benefits consulting firm.
 The study, "Benefits Policies and Programs," found that 38 percent of all companies surveyed offered flexible benefit plans to their employees. Among those companies offering flexible benefits to employees, 56 percent had annual revenues of $3 billion and above.
 "Flexible benefit programs offer employers an effective way to implement and manage employee cost sharing provisions. This has been the most effective mechanism for controlling the portion of healthcare benefits funded by employers," said Anthony F. Martin, a partner in Coopers & Lybrand's Human Resource Advisory Group. "The down side is that flexible benefits programs are more costly and complex to administer. Accordingly, companies must weigh the increased administrative costs against the potential for savings."
 The study reviewed the three primary types of flexible benefit plans, modular, core-based and full-flex. Among those companies providing flexible benefit plans, the modular approach is the most popular at 36 percent. Modular plans are pre-designed, pre-packaged programs providing a number of alternative benefit combinations. Also, modular plans are most prevalent in companies with revenues between $100 million and $299 million, and companies in the banking and finance industries.
 Core-based flexible benefit plans are provided by 31 percent of companies offering flexible benefit plans, most commonly with a revenue size of at least $10 billion. Under this approach, employers ensure that employees are adequately protected by providing health benefits to everyone while also allowing employees to add enhancements on an individual basis.
 Full-flex plans, which allow employees to design their own individual benefit packages within prescribed cost parameters, are offered by 33 percent of companies. They are the most costly to administer and are most common in companies with revenues of $300 million and above. The study also found that a larger proportion of healthcare organizations (28 percent) provide full-flex plans than organizations in other industries.
 "Educating employees about how to make sound choices under a full flexible benefits plan is a challenge. However, both employers and employees will benefit when employees better understand the true costs of healthcare and are equipped to take a more proactive role in controlling those costs," Martin added.
 According to Janet Fuersich, director of the Human Resource Advisory Group survey unit, "Benefits Policies and Programs" is a survey of 541 companies ranging in size in terms of annual revenues from under $30 million to more than $10 billion. The industry sectors covered by the survey include durable goods manufacturing, non-durable goods manufacturing, banking and financial services, insurance, healthcare, business and personal services, technical services, not-for-profit, retail trade, gas/electric utilities, and other miscellaneous industries.
 Copies of the "Benefits Policies and Programs" survey are available for $495 from Coopers & Lybrand, 1301 Avenue of the Americas, Room 9-56-L, New York, NY 10019-6013; 212-259-2447.
 Coopers & Lybrand is one of the world's leading professional firms, with offices in 101 U.S. cities and member firms in 120 countries worldwide. The Human Resource Advisory Group is ranked among the top ten employee benefits consulting practices in the world, and is the largest such practice to be associated with an international accounting firm.
 -0- 5/13/93
 /CONTACT: Doris Brown of Coopers & Lybrand, 212-536-2013; or David Fridling of Ruder-Finn, 212-593-6321, for Coopers & Lybrand/


CO: Coopers & Lybrand ST: New York IN: SU: ECO

SH-GK -- NY060 -- 8189 05/13/93 14:30 EDT
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Date:May 13, 1993
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