Control costs of retiree prescription drug benefits

Article Abstract:

Employers offering prescription drug benefits to retired employees realize that costs are increasing, although accurate knowledge of corporate liability is lacking. Future costs had been projected for less than one-third of these benefit programs by 1987. Improved cost management is necessary to accommodate the growing retiree population and the exclusion of prescription drugs from Medicare coverage. A list of cost management tools to be used with cost-shifting techniques is given. Possible ways to transfer more of the cost to the beneficiary are to increase co-payment limit coverage, restrict quantity, and to obtain private financing for the plan. Retiree medical plans are expected to be affected by a rule change proposed by the Financial Accounting Standards Board that will require employers to project future costs and report these costs as liabilities on company balance sheets.

Prescription drug plans, Retirees

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Employee attitudes benefit plan designs

Article Abstract:

Employers need to balance affordability with employees' protection needs when designing employee benefit plans. Hay Employee Attitude data base information collected since 1977 on 1,900 organizations and four employee levels reveals a steady drop in pay satisfaction and perceived career advancement potential, but 62 percent of surveyed workers express a favorable attitude toward their overall benefits packages. Employees surveyed give their highest approval rating for capital accumulation plans: 69 percent, while 69 percent of respondents displayed negative attitudes toward pension plans. Employers trying to solve the ongoing 'benefits design dilemma' should secure companion data on average employer benefit costs and compare it with comprehensive cost and attitude data from within their own firms.

Research, Hay Associates

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