Current trends in employer management of health-care plans are summarized, and the role of managed care is emphasized. Employers realize that employees perceive health-care plans as an important benefit and that attractive benefit plans will help in recruiting and retaining employees. At the same time, companies are faced with the need to find new ways in which to curtail the rising cost of health-benefit plans, which often constitute their largest and most uncontrollable budget item. Such techniques as more effective claims administration, plan design changes, plan financing arrangements, education of employees, and increased employee cost sharing are among the cost-containment actions that employers are implementing. Managed-care networks including health maintenance organizations are often viewed as the ultimate cost-containment model; however, the effectiveness of these evolving arrangements must be rigorously evaluated on the basis of appropriate performance criteria and documentation of achievement. Faced with cost-containment pressures, employers are taking a more assertive and informed role in health-plan purchasing decisions. The future course of health-care delivery will depend in large part on the response of corporate management to the challenge of ensuring that their employees receive quality health care at controllable costs.