Application: Health Insurance Options
When you think of the benefits that employees most desire, health insurance is likely to be one of the first things that comes to mind. Employer-sponsored health insurance is a benefit that nearly all employees appreciate. Though most employers would like to provide health insurance to their employees, the stark reality of the matter is that it is one of the most costly benefits an employer can provide. In fact, health costs have continued to increase steadily in recent years.
In order to manage the expense of providing health insurance, many employers are exploring different options for health care plans, as well as variations in the traditional indemnity arrangements. One increasingly popular option is the consumer-driven health plan (CDHP). This plan is gaining employer buy-in not only for the cost advantages, but also because it allows employees to become more literate and active in their own benefits. As an HR professional, how might you determine which health insurance plans are right for your employees? And how can you ensure that the plan you have selected is an affordable option for your organization?
To further explore the CDHP and other available health insurance options, review Chapter 10, "Employer Sponsored Health Insurance Programs," in your course text. Then examine the articles, "Employee Communications and Health Care Reform," and "Mythbusters: The Facts Are In About Consumer-Driven Health Plans," to consider the challenges and implications of employer-provided health care. Finally, analyze the appropriateness of various health plans for a specific organization by placing yourself in the role of the Human Resource professional in the scenario below.
Scenario
Solar Solutions manufactures custom-designed solar panels. The organization has been in business for five years and has enjoyed slow but steady growth. As the company has expanded, so have the compensation and benefits offered to employees. However, due to the high cost of health care insurance, employees have been forced to bear the expense of that benefit. Now that Solar Solutions is more profitable, the president of the organization wants to change the health care practices of the past. He hopes this change will accomplish two strategic goals. One, he wants to lighten the stress current employees feel about paying for their own benefits. Two, he hopes this measure will help to recruit new employees who might otherwise shy away from an organization with no formal health care plan in place.
Though the president is excited about these potential changes, he is also concerned about the costs associated with health care insurance programs. Accordingly, he has asked you to investigate insurance options that are available for companies. He would also like you to prepare a critical comparative analysis of employer-sponsored medical plans.
To complete this Assignment, respond to the following in a 3- to 5-page paper:
Compare the types of health care plans currently available to organizations.
Select two types of health plans from the list below:
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Indemnity
Exclusive Provider Organizations (EPOs)
Point of Service (POS)
Briefly highlight the key characteristics of each plan you selected, including what differentiates it from the others.
Note both positive and negative factors related to each plan.
Compare the two organizational plans you selected to CDHPs.
What are the most significant elements of CDHPs?
What advantages do CDHPs offer over the two plans you selected?
What are possible disadvantages of CDHPs?
Analyze the appropriateness of various health plans for a specific organization.
Propose a recommendation for what you believe would be the best health plan for Solar Solutions. Include a justification for your recommendation.