Impact of Affordable Health on Company-Sponsored Benefit Products

Impact of Affordable Health on Company-Sponsored Benefit Products

Human Resource Management Business Article Assignment # 3
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Article Topic: Impact of Affordable Care Act on Company-Sponsored Benefit Programs

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In Chapter 13 we will discuss benefit offerings companies provide to employees. One of a company’s major benefit offering is healthcare coverage. Research and find articles regarding the Impact of the Affordable Care Act on company-sponsored health benefit programs. Since this is new legislation there will be limited information but companies are already beginning to alter program offerings as a result of this new/evolving legislation.
You will most likely want to use several articles to gather information. Articles may be general articles addressing what is likely to happen based on research conducted by consulting firms, professional organization and special interest groups or articles may be specifically about a company or number of companies named in the article decisions have been made and implemented.
If you or someone you know is working at a company that is implementing healthcare benefit changes – you may use that information (you should cite the individual as an additional source).
Content:
1. Summary – Summarize the articles you have researched. Talk about the trends pointed out in the articles (how are company-sponsored healthcare benefits changing or projected to change). Talk about the authors (consulting firm, special interest group, professional society, columnist of journal/newspaper) and the companies (if mentioned) they are writing about.
2. Detail – Provide more detail about the decision regarding changes in the employee-sponsored health programs for the company or companies mentioned in the article. If there is more than one company and/or more than one change discuss each of them.
a. Briefly describe the company (i.e, industry, type of business/what it does, large/small, consumer/commercial oriented)
b. Discuss the decisions management made with regard to changing the healthcare plans offered (moving employees into the public exchanges; reducing weekly work hours to avoid including employees; eliminating spouses, etc.)
c. Discuss the reasons management provided to support their decisions.
d. Discuss the potential impact to the employee and their families. (this part may be difficult because the article may not mention impacts and you will need to think about it and give your opinion).
e. Discuss the potential impact to the company that may result from the changes they are implementing (employee morale, employee engagement, long-term potential of creating recruiting issues as a result of reducing healthcare benefit offering or moving higher percentage of workforce to part-time capacity)
3. Close – Provide a reaction statement. How do you feel about this action? Do you think this decision was the right thing – for the business, for the employees? What would you do is you were working for this company?
Human Resource Management Business Article Assignment # 3
2
Sources:
 You will use at least 3 reference (sources) and cites those references / sources within the paper.
 Your sources MUST be American based from the U.S OR in English (NOT your translated English.)
 If you use quotes from the article, be sure to cite these as in-text citations when they are used throughout your paper.
 REMEMBER: Wikipedia is not a credible source
Formatting:
Your paper will consist of a cover page (template provided), content (template provided) and a source page.
 Word document
 3 pages (8 ½ x 11 paper size) double-spaced (does not include the cover or source page
 Use 12pt, Times New Roman font
 Use 1 inch margins on all sides
 Be sure to follow the content and cover page templates for additional formatting
Submission:
 Papers are to be submitted through Blackboard via the designated homework portal by attaching a copy.
Notes: Please reference the Rubric for grading detail.

Summary

New requirements have been deployed by the Affordable care Act (ACA) for better health coverage plans (Klein et al. 3). This health plan will cover a range of preventive services like no co-pays, co-insurances or deductibles which are free. From Henry, J. Kaiser Family Foundation, the new ACA plans could increase employer costs, it is bound to bring in comprehensive benefits that cover working aged Americans. The need to ensure aged American workers access health insurance is not common until the introduction of the new ACA plans. Employees are projected to enjoy better benefits through the tax system and better subsidies. Retirees are also likely to receive defined contributions from employers. Linda Blumberg is a writer on why Employers will continue to provide Health Insurance. Blumberg concludes that, most analysis done by The Rand Corporation (which supports General Electric Company (GE), will say companies will leave the company-sponsored healthcare intact. The company’s new strategy is based on the belief that a considerable number of companies will come up with strategies to improve health coverage according to the new requirements. The company’s strategy is to avoid escalating control health insurance cost caused by unpredictable economic like the 2008 recession.

Decisions regarding changes in the employee-sponsored health programs for General Electric (GE)

General Electric Corporation (GE) is an Industrial company which supplies computer electronics, houseware, lighting and electrical appliances for commercial sale. GE also provides personal healthcare products. Improving quality of healthcare worldwide, aviation and capital (financial) products and services The Company’s size is significantly big with a higher share of workers of over 3000 workers who work in their labs and factories. These employees range from high-waged to low-waged workers. A substantial shift predicted in the new requirements by the company raised the prospect of public subsidy costs.

According to a Rand Corporation press release in early 2015, the management had considered was to drop the ACA health cover for economic reasons. The penalty fine was less than the health cover; this is especially for employers who had a hundred or more workers. It would also mean that employees who initially had individual covers, or private exchange would drop them to benefit from the employer cover. Another management decision was to prolong waiting periods for the newly employed employees. Apparently, Rand Corporation, subjecting new employees to a probation period before permanent employment with eligibility for health benefits. Health Insured Covered workers who happen to have applied in grandfathered covers are exempt from certain provisions of the Affordable Care Act. These includes an obligation to have a waiting period of less than three months this required the company to review their plan year by year to delay going forward with such provisions. The company also introduced minimum work hour rules which could prove an employee not eligible for health benefits because the benefits would differ significantly from the employees who only work full time.

The press release mentioned that newly implemented changes resulted in some potential impacts. General Electric being such a large firm had to consider workforce to part-time capacity. For the company to avoid an increase in total compensation, the company modified employees to part-time and full-time since the law only applies to full-time employees. The company also had to consider the defined contributor approach where an employee is offered a set amount or to choose from several health benefits options offered on the exchanges. An exchange is a marketplace for health insurance.

From a personal perspective, the new ACA agreement will bring a fundamental change in the way Americans will receive their healthcare covers especially for the employees. While ACA will provide access to insurance for many, it will change how some currently receive coverage and lower employment rates especially on low-wage workers. On the other hand, the improvement is likely to put cost pressure on the business, employers, employees and Insurers. Insurers will face a significant impact such as rising costs of hospitalization and unnecessary treatments. If, however, no action is taken to relieve these pressures, costs will continue to increase yearly. The new agreement may also be disadvantageous because most companies will be dominated by employees with better benefits and better subsidies. Large companies are more likely to delay the approach and pay the required penalties and allow employees to obtain coverage through the private insurance exchanges.

Some of the ACA’s requirements increases costs for the company which would mean increase in taxes which means contributions would be higher to cater for retirees and employees in high-risk occupations.  If I were working for General Electric, I would choose to go with the Health Reimbursement Arrangement (HRA’s). When this happens, both I and the company could contribute to a Health savings account (HAS) for me and my dependants. I could arrange for with employee to fund my Health Savings account through payroll deductions. Withdrawals from HAS is normally not taxed, so I would retain my health saving account balance even if I resigned from the job.

Work Cited

Blumberg, Linda J., et al. “Why employers will continue to provide health insurance: the impact of the Affordable Care Act.” INQUIRY: The Journal of Health Care Organization, Provision, and Financing 49.2 (2012): 116-126.

Henry J. Kaiser Family Foundation. 2014 Employer Health Benefits Survey. Henry J. Kaiserr Family Foundation, 10 Sept. 2014. Web. 31 March 2015. < http://kff.org/report-section/ehbs-2014-section-one-cost-of-health-insurance>.

Klein, James, et al. “The Affordable Care Act and Employer-Sponsored Insurance for Working Americans.” AcademyHealth, 7 Feb. 2011. Web. 31 March 2015. PDF File.

Rand Corporation. Eliminating Health Insurance Subsidies will boost costs, causes millions to drop coverage. 8 Jan. 2015. Press Release. Web. 31 March 2015.

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