In order to control healthcare costs in a proper manner, a plethora of employers throughout the nation have taken drastic steps in order to keep up with the effectiveness and efficiency of their own business. Paying for medical costs continues to be an issue as time progresses, even with the implementation of new factors within the Affordable Care Act. Some of the main challenges that are faced on a daily basis include implications such as a decrease in the use of preventive services, poor health habits of employees and a decrease in the quality of overall care (Karuppan, 2014). The purpose of this paper is to develop a healthcare strategy that employers can potentially use in the future. Costs will be discussed and there will be a rationale mentioned pertaining to the compensation, benefits and total rewards. Strategy
For an organization with well over 100 employees, the aspect of the strategy would be to purchase a health insurance plan that is group based. In essence, there is an allowance for the employer to select and ultimately purchase a plan and this is typically done through a broker or an agent. With regard to costs, there needs to be an assessment made with regard to the type of business that is being handled. As a whole, costs tend to be shared between the employee and the employer. Moreover, coverage can be extended to possible dependents, if necessary. Once a discussion with the broker or agent is made, it should be known that there is a minimum amount that must be contributed towards the premium on a total level. It may be 50%, 75%, 80%, etc. This value can vary depending on the type of insurance plan that is purchased (Karuppan, 2014). Additionally, if there are premium contributions that are being made, the employer can use them as tax deductibles and employees can use them as pre-tax if necessary. To fully implement this first strategy, the employer should be aware of the many types of group insurance plans that exist. As years progress, they continue to be to the most type of health insurance offered to employees who work for large companies. For those employees who work for micro employers with less than 10 employees, group insurance may be offered as well, but in different form. In this case, many employees tend to be covered by an additional plan.
The second strategy that can be implemented includes the development of a defined health plan where there is a monthly contribution that tends to be fixed. The employer plays a role in allocating that monthly allowance and employees can then purchase the plan that may work well for them. Moreover, the employees can then be reimbursed depending on the balance that is spent (Daloni, 2013). This second portion of the strategy can potentially keep costs down within the organization because there is a level of cost predictability that is seen. Once there is a determined amount that is contributed each month, this value tends to stay the same, thereby creating a sense of ease for the business involved. Moreover, there is a strong allowance for the employees to be offered tax credits and they can then have an increased amount of control over their health care if they choose to.
The final strategy that can be implemented within an organization is facilitating bonuses for employees for their health insurance and medical costs, if needed. Since there are some organizations who simply cannot afford to purchase a group health insurance plan, this strategy is beneficial because the employers do not have to meet a certain minimum participation requirement. Moreover, they do not have to worry about potential alternatives when medical costs are involved. Therefore, this aspect of the overall strategy would work by giving bonuses or a raise in salary directly to the employee. In the long run, this tends to be cheaper instead of reimbursing the actual premium from a health insurance company. As long as tax savings and compliance implications are sorted through, this last portion of the strategy can help a business save costs, especially if they are a micro-business. Although purchasing a health plan has become more mainstream within the past few years, allowing for at least one of these strategically logistic steps will push a business towards a decrease in overall costs (Nicholson, 2012).
With regard to the entire strategy, it should be known that in-network benefits will be offered if the employee decides to opt for the insurance premium purchased by the employer. A preferred provider organization will be laid out and there will be a consumer-directed plan as well. A health savings account that will be adjusted based on bonuses will be used instead of a reimbursement arrangement since this will have a stronger tendency to decrease costs in the long run. A limited amount of wellness incentives will be offered because a wide variety may overwhelm the employees. The following incentives will be laid out for the company: participation based and progress based. The participation based incentives will include participation in some type of screening event so that the preventive services can be utilized. The progressed based incentive will encourage the employees to make sustainable steps towards bettering their health so that they can have an increased well-being. These two incentive parameters may not be expanded right now, but there may be plans for an increase in size in the near future (Nicholson, 2012).
In some cases the plan will be fully insured and self-funded depending on the type of plan that the employee chooses. Based on the strategy outlined, the employee can choose to implement the best option for their overall lifestyle. The communication plan will include the identification of the purpose of the strategy as well as the identification of the audience. In this sense, the purpose will be to develop a more efficient organization with a decrease in medical costs and the audience will be the employees who want to take advantage of the health insurance implications that are offered. With regard to channels of communication, posters, newsletters, flyers, etc. will be created accordingly. Finally, with regard to the Cadillac Tax that is proposed for 2018, this may benefit the employer because there will be an encouragement to engage employees and to offer plans that are more costs effective. Once the strategy as outlined above is implemented, there is a strong chance that the overall costs can be decreased.
Rationale for the Strategy with Regard to Compensation, Benefits and Total Rewards
The strategy is beneficial pertaining to parameters such as compensation, benefits and total rewards because the employees are the ones who have the chance to choose the best plan possible based on their own circumstances. Their salary will not be affected and their benefits will be stable regardless of the implications involved with the Affordable Care Act. As a whole, total rewards may increase because employees will be encouraged to use incentive programs that facilitate preventive services.
Overall, health care costs continue to be a burden to many organizations throughout the United States. With the proper steps, there is an allowance to decrease those costs and to create an environment where employees are in turn happier. Moreover, there is a stronger opportunity to create factors where employees can use certain benefits such as preventive services and incentives in order to increase their own well-being.
- Daloni, C. (2013). Opportunity for progress. Nursing Standard, 27(51), 18-20.
- Karuppan, C. (2014). Employer based coverage and medical travel options: Lessons for
healthcare managers. Journal of Healthcare Management, 59(3), 210-220.
- Nicholson, K. (2012). An ounce of prevention: Preventive health care saves Americans and
money. Public Employee Advocate, 31(4), 1-10.