How would you describe the nature and causes of the employee health insurance cost problem?
How would you describe the nature and causes of the employee health insurance cost problem? What information should be gathered and reviewed before making a recommendation?
Case Study Forum Instructions
Instructions: You are required to submit 2 replies during each discussion, and each post must include proper spelling and grammar – 250 word minimum.
All replies must address the major points of the question posed and be supported by:
Reading & Study Materials (2 citations in current APA format required).
Integration of 1 or more biblical principles.
Pertinent, conceptual, or personal examples.
Thoughtful analysis (considering assumptions, analyzing implications, comparing/contrasting concepts).
Clarity must be brought to issues being discussed and each reply must relate issues to 1 or more biblical principle and experience.
Topic: If you were on the Health Benefits Committee of Quality Auto Parts, in the Nikomo, Fottler, & McAfee: Case Reading: Controlling Employee Benefit Costs, how would you describe the nature and causes of the employee health insurance cost problem? What information should be gathered and reviewed before making a recommendation? Explain and discuss your answer.
Textbook: Nkomo, S., Fottler, M., & McAfee, R. (2011). Human resource management applications: Cases, exercises, incidents and skill builders (7th ed.). Mason, OH: South-Western Publishing Co.
Student 1: Quality Auto Parts, an automotive manufacturer, is faced with a problem. The company wants to provide their employees with exceptional benefits as they have been known to do, but need to do so in a way that is cost effective. Unfortunately, the rising cost of health insurance and struggling economy makes it difficult to do so. John DeCarlo, the CEO for the company found out, “the total employee health insurance costs increased from $4,680 per employee per year in 2000 to $9,869 in 2010” (Nkomo, Fottler & MAfee, 2011, 234) and costs continue to rise. The company must determine the best way to continue offering benefits in a cost-effective manner.
In order to determine the best plan of action for the organization, John DeCarlo creates a committee to look into its options. The group has multiple options to consider. For the Health Benefits Committee to make an educated recommendation, additional information needs to be obtained and reviewed. Each option which the group is asked to consider needs to have details provided with regards to cost and the actual coverage entailed. In addition to obtaining information on each of the options available, the organization should also consider researching its competitors to determine what they offer and how they structure their plans. “One of the best strategies for determining external equity is to conduct a benefit survey. Alternatively, many consulting organizations, professional associations, and interest groups collect benefit data that can be purchased. Perhaps the most widely used of these surveys is the annual benefit survey conducted nu the U.S. Chamber of Commerce. The Employee Benefit Research Institute is also a first-rate source for benefits information” (Milkovich, Newman & Gerhart, 2017, p. 453). Through obtaining information on what competitors offer, Quality Auto Parts can better judge how their current structure and the proposed will stack up against others in the market.
Quality Auto Parts is known “as a ‘‘preferred employer’’ because it had always paid above the market wage rates and its benefits were always more liberal than those of other U.S. companies and particularly those of foreign competitors. DeCarlo did not want to do anything to jeopardize his company’s advantage in attracting and retaining high-quality personnel” (Nkomo et al., 2011, 235). Through thoroughly researching and picking the best option for both the company and its employees, the organization can continue to do so as “medical benefits continue to be ranked tops in importance for most employee groups” (Milkovich et al, 2017, p. 445). The Bible says in Philippians 2:4, “Let each of you look not only to his own interests, but also to the interests of others” (BibleGateway, n.d.); through providing benefits and taking care of their employees, Quality Auto Parts is doing just that.
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