Question

1. Your company designs and makes electronic counting and control devices for manufacturers. It employs 300 people in the Midwest and has been in business on a privately owned basis for nine years. The industry is competitive, and your company must preserve an edge in getting new products to market faster than others, maintaining a high-quality product, offering good and sustained service to its customers, and selling at a competitive price. The company offers a privately insured health care plan, among other benefits and rewards, for all employees and their dependents. It is a traditional indemnity plan design and the cost as a percentage of total employee compensation has increased from 16 percent to 25 percent over the last two years. There is no cost to the employees for their health care. Your competitors are sponsoring much less expensive plans. Your CEO has asked you for a complete review of the health care plan and to create a design that is in line with the business strategy, is cost-effective, provides employees with choice and quality, and helps recruit and retain employees.

Can you link your health care plan to a potential increase in productivity? How? How would you measure?

Answer 1

Answer) When we look at some of the points,we see that healthcare plan is expensive compared to other players and has risen substantially in cost over past 2 years,we have to achieve 3 goals here,first is cost effectiveness which we can achieve by keeping expenses capped that is healthcare plan will be kept under a budget,second is about keeping employees happy,attract new people,for that healthcare plan should include choices which most people agree with giving employees choice but still removing options which are too much of cost center and are not voted by many.Finally for productivity we can link gold, silver and basic plan with productivity where based on pre decided work criteria,we can place top 5% employees in gold plan with more coverage,next top 10% in silver plan and remaining in basic plan giving an incentive to be more productive and at same time cost efficient.

Answer is complete.Thank you!