plans were invited to respond to a request for proposals. The plans that were ultimately selected signed a three-year contract, which included a commitment to maximum yearly premium increases over that period.

Selecting Health Plans

To be eligible for continued participation, plans must have or be seeking NCQA accreditation. They must also provide HEDIS data. The company establishes performance standards against which to judge plans. The standards address the plan's organization and financial status, service integration, clinical care, use of protocols, and customer service, among other things. The company's evaluation process includes site visits. Plans that fail to meet a standard are not automatically ineligible for further participation; the company is looking for continuous improvement in meeting the performance goals. It monitors plans' strategies for addressing problems as well as their success in solving those problems.


Open enrollment is offered once a year, in the fall for coverage that begins in January. The company pays 90 percent of the premium for any plan chosen. Almost 60 percent of employees have chosen a POS option. It appears that employees give the highest priority to having a plan that offers choice of providers and includes "their" doctor. Price—in the form of employee contribution to premium—does not appear to be very important in influencing choice, in part because the contribution structure requires employees to pay only 10 percent of the additional cost of more expensive plans and in part because the plans' premiums do not differ much. However, copayments for out-of-network use (another measure of "price" to enrollees) does appear to influence choice of plans.

Educating Employees

The company made a major commitment to educating and equipping employees and retirees to make an informed choice

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