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The expected benefits, as they appear at the end of year one, are folded into the performance target for year two, and management never gets paid a premium for finding such an investment.

Cost-sharing arrangements such as increasing the size of the co-pay, raising the amount of the deductible, requiring employees to make larger contributions to the insurance premium, providing only catastrophic protection, offering managed health-care plans with comprehensive coverage and offering flexible savings accounts or health savings accounts are all ways employers have attempted to manage costs with varying impacts on employees.