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As health care costs rise the importance of an enrollment in a health care plan grows. Health care will continue to be an important factor for employees as long as costs continue to grow. I. Health Care. Starting from the time a person leaves their parents and as they enter the workforce and continue through life healthcare is an issue. Security is a basic human need and health care is one of the biggest parts of that security. It is important to know if one becomes ill or injured that treatment is readily available to them. This includes not only the employee but also the employee's family and or life partner. Health care here in the United States is not socialized and therefore is provided through the purchase of health care plans entirely by the employer or with co-payments from the employees. A. Providing health care programs is not always a guaranteed part of a compensation package when employed. Depending on the organization and its total compensation package health care may or may not be included. The organization may chose to provide the health care to the employees free of charge or they may be required to contribute a significant amount each month. 1. An employer designs compensation packages to attract qualified employees who have the knowledge and skills they desire. As part of the package health care plans may be offered to the employee after an initial waiting time such as 30 or 90 days. The health care plans help to attract and maintain a stable workforce thus, enabling the organization to meet its goals of production or service. 2. Health care plans provided by an employer may be similar to what the military provides, which covers all expenses for the military member. This type of plan requires the family members to pay a deductible amount of the services provided 3. The employer may also provide subsidized or reduced health care plans as part of the compensation package. Subsidized plans may be significantly lower in cost to an employee than if they purchased the plans on their own. Private health care plans costs for an employee can run one and a half to three times as much as what an employer can provide. This is due to the buying power of an organization when it is in a group plan rather than an individualized plan. 4. A factor in deciding the need for a compensation plan is whether or not a stable full time work force is needed. The need for a stable workforce base helps to finalize the decision for including the health care as part of the compensation package. A healthy work force ensures the employees are ready and able to perform their assigned duties. B. Health care needs are not limited to the lower paid employees of an organization. Employees at all levels of earning and positions require some form of health care plan to provide for themselves, their families and life partners. II. Statistics reported by the Employee Benefit Research Institute (EBRI) state that in 1998 170.3 million people had employment based health care plans. Of this amount 6.2 million were through the federal government, 22.9 million through state and local governments, while 125.7 million were through the private sector. This still leaves approximately 80 million people without health care plans are spread into self employment, small businesses, Medicare, Medicaid and uninsured. These statistics help to point out the importance of a compensation plan that includes health care for employees. A. The EBRI states in its data that the uninsured employees are part-time, low-income, blue collar in certain industries (such as agriculture), young (under 31), single, less educated, minority, non-citizen and employed by small firms. The average uninsured worker is less likely to earn the same wages as an insured worker. B. Availability of health care plans has an impact on prospective employees. Further information provided by the EBRI shows that 78% of the full and part-time prospective employees take this factor into serious consideration when considering job offers (EBRI World at Work Report, 1999). C. Health care plan costs to employers as of 1992 were 221.4 billion dollars a year as reported by the U.S. Department of Labor's Bureau of Labor Statistics. This is compared to costs of 37.2 billion dollars to employees. These figures show that employers are expending 6 times as much as the employees are for the plans. 1. Employers are constantly looking for ways to reduce costs and a factor in reducing costs is to maintain or reduce the likelihood of increase in health care plans. A major step in this cost reduction method is health care prevention. Employees are in a position to have an impact on the cost of health care. Prevention in relation to plan costs is important in the fact that healthier employees cost less to purchase health care plans. 2. To assist employees in starting and maintaining prevention methods the employers provide health fairs, surveys, and educational materials. Along with these efforts many companies provide quarterly newsletters, activity programs, fitness center memberships, fitness centers on-site, and incentives/rewards. Consulting groups such as Presbyterian Health Care and Health Grades provide professional assistance in reducing employer health care costs. III. Health care plans are a vital part of the overall compensation plan for many organizations. To attract and retain employees with the knowledge and skills necessary to achieve the desired goals of the organization a viable health care plan is necessary. To ensure plans are within an acceptable expense it is necessary to educate employees in preventive health care measures. Healthy employees make for less expenditures of plans and more productivity. Reviewing the facts and reports it is clear that health plans are a necessity rather than a nicety to help the organization meet its goals. Health Care 7 Compensation Management in a Knowledge-Based World, (2000). By Richard I. Henderson. Henry Holt and Company Inc., (1999). "Forbidden Love" by Gary B. Nash http://www.presbyterian.org/employers.html http://www.healthcareresource.net/healthplan.html http://www.ftp.bls.gov/publ/news.release/hce.txt Bibliography: HEALTH CARE Health Care Word Count: 1079
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