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Flex 2002 News:
Employee Contributions Increasing for Medical and
Dental Coverage
Merck manages the costs of health care benefits just as any other corporate
expense. Over the past few years, the Company has maintained the competitiveness
and quality of our medical and dental benefits—and proactively managed their
costs—by making a series of minor benefit changes and by offering many employees
the chance to elect managed care medical coverage. And, many employees have
done their part to manage these costs as well—by making smart coverage decisions.
The success of this strategy is clear:
- Merck’s health
care benefits compare favorably to those of other pharmaceutical and
Fortune 100 companies;
- Based on the recent
Employee Opinion Survey, 83% of employees are very satisfied with their
Company-provided benefits;
- Employee contributions
for most medical options haven’t increased for five years—and currently
there are no employee contributions for dental coverage; and
- For 2001, 70%
of flex-eligible employees elected one of the available managed care
medical options.
Going forward, this degree
of stewardship—which includes careful planning and smart employee consumerism—must
continue. In fact, rising health care costs and future trend projections
require Merck to go one step further, and adjust the level of employee cost
sharing for medical and dental benefits in 2002. Keep in mind that many
of the changes described here are consistent with Merck’s employee health
care guiding principle of Economics/Cost. As such, they
are designed to:
- Encourage competition
among options by linking costs directly to levels of coverage and care
management. For example, options that offer lower levels of coverage
and/or more care management cost less; options that provide higher
levels of coverage and/or more freedom of choice cost more.
- Close the ever-growing
gap between Merck’s total health care costs and the portion of those
costs shared by employees. To continue to manage these expenses—and
to still remain competitive—the Company has set overall employee cost-sharing
targets equal to 20% of medical costs and 10% of dental costs.
Fast
Facts
- According to
Hewitt Associates, a leading human resources and management
consulting firm,
U.S. employers will see health care costs increase an average
of 10-13% in 2001. This rise comes after last year’s rate
increase of 9.4%, the highest since the early 1990s.
- In terms of
employee payroll-related contributions for health care coverage,
Merck employees currently pay an average of 4.6% and 0%
for medical and dental benefits, respectively—with Merck
paying the balance. However, keep in mind that payroll contributions
are just one of the ways that Merck employees share in the
cost of medical and dental coverage; there are other factors
to consider including copayments, deductibles, coinsurance,
etc.
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Related Links
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2009 Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, N.J., U.S.A.
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Merck manages the costs of health care benefits just as any other corporate
expense. Over the past few years, the Company has maintained the competitiveness
and quality of our medical and dental benefits—and proactively managed their
costs—by making a series of minor benefit changes and by offering many employees
the chance to elect managed care medical coverage. And, many employees have
done their part to manage these costs as well—by making smart coverage decisions.
The success of this strategy is clear:
