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Describe the nature and causes of the employee health insurance cost problem in this case
The case study details problems that organizational managers encounter when solving the problems of healthcare insurance costs against the background of economic performance. In the context of Leimberg and McFadden’s (2012) study, the problems causing the health insurance cost problems include higher taxation rates, large catastrophic-illness claims, high technology medicine, increased use of mental health and substance abuse services, increased use of medical services, shifting costs from government programs, and the recent premium increases of traditional and managed care plans.
Leimberg and McFadden (2012) reinforce the facts that the AIDS menace, the demographics in the Auto industry, and high physician fees contribute significantly to the problems facing the Quality Auto Parts organization in the provision of health insurance for its employees. All the above-mentioned problems are against the poor financial performance of Quality Auto Parts Company.
What information should the employee health benefits committee gather before making any recommendations? Why?
Before making decisions, the employee health benefits committee should gather information on the insurance options employees want to adopt, detailed information about the available health insurance plans, and any available programs that could be combined to provide the best option suitable for the employees. In the views of Leimberg and McFadden (2012), to make the decisions, the committee has to collect information on all cost containment plans including self-insurance, the health savings account, pre-admission certification for surgery, utilization reviews, implementation of disease control programs, wellness programs, the use of retail clinics, flexible clinics, financial incentives for outpatient services, managed care programs, and the mail-order drug prescription programs (Miller, 2004).
Given the desire of most employees to protect themselves from high healthcare costs, is there any way for Quality Auto Parts to continue to attract the best employees while containing health benefits cost?
In view of the need to keep the health insurance costs down, there is a way Quality Auto Parts can continue to attract highly qualified staff while containing health costs. One of the solutions is to identify the best insurance plan that fits well with new employees who want to join the Quality Auto Parts. According to Leimberg and McFadden (2012), the basis of making the most appropriate choice is the previously gathered information detailing the health insurance plans that fit into the health insurance plan of the organization and individual employees (Miller, 2004).
Leimberg and McFadden (2012) argue that embracing available and proven techniques on pension and benefit planning could provide Quality Auto Parts with the best option to adopt in providing employees with the health insurance program while keeping insurance costs as low as possible. The option should reflect the need for Quality Auto Parts to keep the health insurance costs as low as possible while being acceptable for both the employer and the employee.
On the basis of what you know about Quality Auto Parts, which of the four specific proposals would you be likely to recommend?
Typically, one of the best options is to come up with a health insurance plan establishing an insurance fund, and engaging the local providers using the providers’ preferred arrangements. The strength of the proposed scheme bases on offering price discounts to the Quality Auto Parts organization for each employee directed to the local providers. That could significantly be beneficial to the organization. However, there is a range of other options, but the information gathered could provide the best platform in decision making on the best option to adopt. I recommend a combination of the major insurance plans because of the major medical expenses that could be costly to the company having a health savings account option to address the needs of less costly routine healthcare options.
References
Leimberg, S. R., & McFadden, J.J. (2012). Tools & Techniques of Employee Benefit & Retirement Planning, 12th edition (Tools and Techniques of Employee Benefit and Retirement Planning. New York: The National Underwriter Company.
Miller, J. E. (2004).The Tools & Techniques of Employee Benefit and Retirement Planning, New York: The national Underwriter Company.
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