Increasing employer efforts to moderate the cost of providinghealth care for employees was reflected in International BusinessMachines Corp.’s (IBM) adoption of a new plan stressing preventivemedicine and less costly alternatives to traditional care.
A companyspokesman said that IBM spends about $500 million a year for health carefor its 220,000 domestic employees and that the new approach wasexpected to reduce the annual rate of cost increase to 10 percent, from15. Provisions of the new plan include: * A $200 a year personal health account to help employees pay forprenatal tests, immunizations, infant care, eye glasses, and otherservices not covered by the health insurance. Costs are reimbused at 80percent, meaning that the costs must total $250 in a year before theemployee receives the full $200. * Cost controls requiring employees to now pay 40 percent of thefirst day’s charge for use of a hospital room and 20 percent of thecost of elective surgery performed without a second opinion.
Also, the$150 annual deductible, which previously applied to all employees, wasraised to 0.3 percent of annual salary for those earning more than$50,000 a year. In other changes, health insurance was extended to provide fullcoverage of up to 50 home care visits by licensed professionals andreimbursement for birthing center services. Dental care rates will nowvary according to the cost of living in the region where the employeeresides, lifetime coverage was raised to $7,500 per person, from $5,000,and the maximum benefits for orthodontics was raised to $1,100, from$900.