Assignment: Case Study: Health Care Bargaining

Read the case study and respond from a management or union perspective.

Case: Health Care Bargaining and PPACA

GMFC is a multidivisional company with over 50,000 employees. Given its size, it has chosen to self-insure its health care coverage and subcontract administration to Vesuvius Heath Care (VHC), one of the five largest health care insurance companies in the United States. In addition to paying claims, VHC is also the gatekeeper for what procedures are covered by the plan and for negotiating payment levels with major health care providers. Prior to the effective date of various Patient Protection and Affordable Care Act (PPACA) provisions, the GMFC health care plan had a lifetime benefit of $2 million per covered employee or dependent and offered coverage to dependents up through the age of 22 if enrolled in a full-time degree program. The PPACA has required GMFC to change its coverage to accommodate new benefit and age limit requirements, adding some cost to the company for the current plan.

Looking forward, GMFC wants to make sure that its coverage includes the essential health benefits required by PPACA, but is concerned with the rate of health care cost inflation. Local 384 is looking toward 2018 and is concerned that the company may abandon the plan because it might be vulnerable to the "Cadillac tax."

GMFC is considering dropping health care coverage and paying the federal penalties instead. This would leave employees in the situation where they would need to purchase insurance from one of the virtual exchanges. If GMFC were to do this, Local 384 would demand a large wage increase to offset the reduction in contributions from the company. In any event, there would be significant labor relations problems associated with a drastic change like this.

Assuming that these issues will be major ones in the upcoming negotiations, prepare either a union or a management position on the issue of future health care benefits at GMFC, recognizing that the employer will be decreasingly able to compete if total compensation costs continue to increase and regulatory mandates become more cumbersome.

Be sure your paper follows APA style according to the CSU-Global Guide to Writing and APA Requirements; the paper should be 4-6 pages in length, not including the cover and reference pages.

Use three credible sources. The CSU-Global Library is a good place to find these sources. You may not use Wikipedia for any CSU-Global assignment. For this assignment, a credible source is defined as:

• A scholarly or peer-reviewed journal article
• A government-based website or publication
• A trade or industry journal article, publication, or website, including those from trade organizations.