COBRA Notices: Final Regulations Describe Requirements, Provide Model Notices
In order to control rising health care costs, more employers have begun passing along cost hikes to employees, and are attempting to persuade employees to make smarter health care spending decisions. However, employees are beginning to resist calls for more cost-shifting, and already feel that they are effective health care consumers. This “disconnect” between employers and employees, as reported in a survey by human resources consultant Towers Perrin, indicates that if efforts to make employees true “partners” in cost control are to succeed, employers may need to make changes in their health care communications strategies.
The research, which included a survey of more than 1,000 employees and a companion survey of executives and managers at 120 U.S. companies, found that only about a quarter (28%) of employees thought that it would be appropriate for employers to ask them to absorb more health care cost increases. Nevertheless, in a similar survey conducted last year, almost half (46%) said that they would understand the need for the additional cost-shifting.
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Insurers Reinstating Managed Care Restrictions in Effort to Control Costs
Continued increases in health care costs have prompted insurers to restore some unpopular money-saving measures that were scaled back after a backlash against managed care during the late 1990s. Requirements such as referrals for specialists and pre-authorizations for certain medical services are quietly reappearing in many health plans, according to a study published recently in the policy journal Health Affairs.
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Lifestyle Drugs Improve Quality of Life, But Who Should Shoulder the Cost?
One of the primary reasons medical costs have surged over the past several years has been the influence of prescription drug spending. While overall health care costs have been rising at double-digit rates, prescription drug cost increases have outpaced overall health care cost growth. For example, employers reported a 16% increase in the cost of their prescription drug plans in 2003, according to Mercer Human Resource Consulting. Most estimates of health care cost increases for that year have come in several percentage points lower.
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Most Employee 401(k) Accounts Withstood Market Downturn
The majority of Americans who invest in 401(k) retirement savings accounts weathered the 2000-2002 bear market pretty well, according to a recent research report. The report was prepared by the Investment Company Institute, a mutual fund trade group, and the Employee Benefit Research Institute, a nonprofit research organization.
The average account balance at the end of 2003 was $76,809, up nearly 30 percent from $59,510 a year earlier due in part to the stock market recovery and also continued contributions to the accounts, the study found. Balances were also up more than 17 percent from the average $65,572 in accounts at the end of 1999, before the start of the market downturn.
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