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Running head: Human Resources Navigating the Insurance Challenge
Human Resource Management
Benefits are a major expense for employers today, and with a decade of little or no growth, increases in benefit costs in the private sector of 3. ...
In the following pages we will seek to understand the costs of health, disability, and worker’s compensation insurance, the three main cost drivers in benefits packages, that have the most impact on employees and organizations today. ... Overall though, the issue becomes a question of how much longer organizations can sustain and accommodate changes, of 13-15% increases annually in insurance premiums, and continue to find creative solutions to maintain benefits for their employees (Gerard & Lewis, 2003).
Healthcare Insurance
Health care spending in the United States is currently at 15 % of the Gross Domestic Product (GDP), a larger share of GDP than any other industrialized country and expenditures are expected to increase by more than 60 % by the end of the decade (Plunkett, 2004). ... Other forms of insurance offered by respondents include dental, mental health, vision, chiropractic, supplemental health and accident, intensive care, long-term care, critical illness, cancer insurance and hospital indemnity insurance (Burke, 2004). ... These increases in cost are a challenge to employers and cannot be taken lightly. ...
Disability Insurance
Another challenge for human resource departments is in the area of short and long-term disability benefits. ...
Employers have been offering this type of coverage for many years so why the challenge now? ... Another challenge for employers is the adverse disability tendencies, which are affecting employers and insurers in risk management. ... d)
Workers’ Compensation
The last area of insurance compensation that human resource departments are working hard to control costs for, is workers’ compensation. This insurance is a state-based set of programs designed to provide benefits to employees who are injured or become ill in the course of their employment. ... Each year, workers compensation insurance cost businesses upwards of “48 billion dollars”, and the premiums keep rising (U. ... state requires employers to have workers compensation insurance with the exception of Texas. ... 2)
Employers with a set number of employees are required to purchase insurance for their employees from a workers’ compensation insurance company or in some cases are allowed to be self-insured. An employer files a claim on behalf of the injured employee with their insurance provider, who then pays the medical and disability benefits according to a state-approved formula. ... Some states are cheaper than others to open and maintain operations, and more companies are choosing states with reduced insurance costs. ... 1)
Conclusion
In conclusion, it is increasingly clear that employers can no longer maintain the costs of insurance benefits alone. The insurance benefit gravy train for employees is over. Organizations have truly maneuvered and manipulated two of the largest beasts in the country, healthcare and insurance systems, in an effort to negotiate creative packaging, cost sharing, and benefit reduction techniques, only to realize average annual increases in the double digits that exceed their budgets ability to pay. The truth of the matter is that employees must be instituted as the next line of defense in organizations’ struggle to maintain and contain the costs of insurance benefits. ... Employees must begin to view health insurance benefits as a privilege, not a right to be squandered.
Approximate Word count = 3436
Approximate Pages = 13.7
(250 words per page double spaced)
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