0To prepare for this Discussion: Review the materials on critical reading strategies and on the MEAL plan for paragraphs.Read the provided article in the Learning Resources, taking note of where the a
Discussion Week 3
As an employee benefits manager it is my responsibility to work with the insurance companies and have a health insurance policy that can address the needs of all the employees. In 2014 the Affordable Care Act made it a requirement for everyone to have health insurance. Under the new law businesses that had more than 50 employees are required to provide insurance to their employees, and they have to satisfy both state and federal rules (Small Business Majority). Currently, there are two different groups that my employees fall under: the first group is within the age group of 20-30 year-olds who have no health issues that are known, and the second group is within the age group of 40-50 year-olds who have been diagnosed with chronic diabetes. I would want to take the route of health benefits as compensation for my employees so that it can play a role in recruiting employees and retaining them (Polsky et. al., 2005). This laws makes it necessary for the government and the employer to fulfill their obligations of have health insurance for their employees. Moral Hazards consist of asymmetric information that is between two parties and once there is a deal struck there is a changing in behavior of one of the groups (Nickolas, S., 2019). An adverse selection is when there is no symmetric information that is provided before a deal is set between two parties, the seller and the buyer (Nickolas, S., 2019). Since there are two different groups that must be provided insurance, moral hazards and adverse selection will impact the health insurance options that are provided. If one of the groups is hiding information that could be vital to selecting the health insurance, it can have a negative impact on the other group or cause a change in who qualifies for the health insurance and who doesn't.
There are many things that need to be kept in mind when designing a health insurance policy for my employees. The first step is to identify the objectives and budget, second is to prepare a need’s assessment, third is to bring together a benefits plan program, fourth is to communicate this plan with the employees and lastly, determine the effectiveness of this program. I would want to have a PPO plan set up for the employees, because they will be able to have more flexibility in who they see and their individual health care needs can be addressed (HMO vs. PPO Insurance Plans). Since there are different health concerns for the groups this would be the best route to take, because although the premiums might be higher, there is the flexibility that you can see a specialist without having to see your primary care physician first.
References:
HMO vs. PPO Insurance Plans. Retrieved from https://www.medmutual.com/For-Individuals-and-Families/Health-Insurance-Education/Compare-Health-Insurance-Plans/HMO-vs-PPO-Insurance.aspx
Nickolas, S. (2019). Moral Hazard vs. Adverse Selection: What's the Difference? Retrieved from https://www.investopedia.com/ask/answers/042415/what-difference-between-moral-hazard-and-adverse-selection.asp
Polsky, D., Stein, R., Nicholson, S., & Bundorf, M. K. (2005). Employer health insurance offerings and employee enrollment decisions. Health services research, 40(5 Pt 1), 1259–1278. doi:10.1111/j.1475-6773.2005.00415.x
Small Business Majority, (n.d). Laws Related to Health Insurance. Retrieved from https://healthcoverageguide.org/reference-guide/laws-and-rights/laws-related-to-health-insurance/
I agree with you that the employer should have some responsibility to provide health insurance to their employees. Although the government does provide some incentives to employers that provide coverage, the government should have some responsibility in providing health care. The Center for Medicare and Medicare Services does provide incentives for bundled payments. In both underdeveloped and developed countries, insurance is free to the population. It is known that employees with chronic illnesses spend more on health care. Therefore, the employer and the government should provide plans that complement the other for the total population to achieve quality care at a lower cost. The employees with no known health issues can pick coverage where the deductible increases each year as usage increases. This could reduce the risk for the insurance company and eliminate the risk associated with the misuse of health care. Under the Affordable Care Act, health coverage should have some regulation in use and guidance to insureds that have chronic illnesses (Mendoza, 2016). For employees with unknown conditions, abuse can be tracked, and healthy living incentives can provide a way for this population to recover costs related to higher health costs with quality outcomes. Employees that have diabetes can select coverage options which will cover the treatment and medications related to the condition. The insurance company can reduce the amount of risk, premiums and out of pocket expenses, of high- risk employees can incur (Ma, Qiu, and Bi, 2015). The opportunity for adverse selection could be less or eliminated. Also, both plans will be managed by a primary care physician adverse selection can also be eliminated. The primary care physicians would direct care and ensure a possible cure for the disease.
References
Ma, B., Qiu, C., & Bi, W. (2015). An insurance contract with a low compensation period under adverse selection. Information Economics & Policy, 31, 67–74. doi: 10.1016/j.infoecopol.2015.04.005
Mendoza, R. L. (2016). Which moral hazard? Health care reform under the Affordable Care Act of 2010. JOURNAL OF HEALTH ORGANIZATION AND MANAGEMENT, 30(4), 510–529. doi:10.1108/JHOM-03-2015-0054
