MANAGED CARE February 2001. ©MediMedia USA

Sidebar to accompany: Defined Contribution: Why It Won't Happen Any Time Soon

Don't show them the money!

Despite recent signs of an economic slowdown, this is still a tight labor market. Employers are not likely to switch to a defined-contribution system unless they're sure that their employees would back such a move.

A survey by the nonpartisan, not-for-profit Employee Benefit Research Institute indicates that employees like things just fine the way they are. The survey, conducted by phone in February and March 1999, asked 1,004 workers what they thought about the push to put more of the purchasing power in their hands.

Employees now prefer:

The study's authors said that even "if the existing tax exclusion for employment-based health insurance was removed, there is still strong support for the employment-based system...."

If health care benefits were taxable, employees say they'd prefer:

SOURCE: 1999 HEALTH INSURANCE PREFERENCE SURVEY, EMPLOYEE BENEFIT RESEARCH INSTITUTE

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