When employers purchase health insurance, they do so to minimize the loss of wealth they can acquire as a result of paying medical expenses for sick employees. The insurance company accepts this risk in exchange for premiums paid and pays for medical expenses when there are health issues. Several things are taken into consideration when deciding on a plan and services that would be provided. First and foremost is to make sure that medical costs are forecasted so that the right prices for premiums are charged. This is ensure profitability and cover all cost associated with the insurance plan. The most important insurance cover that most employees in this century are turning to it is the long-term care insurance. This ensures that people with diseases such as cancer, diabetes, and other diseases that might require long-term care secure their retirement benefits. This report will take a look at a chosen company’s employees, reviewing their health risks and demographics in order to determine what plan would work best for them. There will also be an analysis of the possible potential risks if the decision is made to insure this company.
Castor Collins Health Plans is a HMO that provides health insurance and services to enrollees throughout the state of Pantome. The company is currently looking to increase the number of members enrolled and has been contacted by Dearden Industries to possibly help them with their health insurance needs. They want a plan designed specifically for their needs. The insurance premium will be split with the employer paying 80 percent and the employee paying the other 20 percent. Nevertheless, the employees were allowed to pay for any extra premiums resulting from any additional insurance requirements that the Dearden Industries did not initially contract with Castor Collins Health Plans. The most they are willing to pay was five thousand per person. After providing insurance for the company for a year, they decided to increase the premium but in return wanted more health options under the insurance plan. This move was reached after conducting an assessment on the health conditions of the company employees and establishing that most of them required comprehensive health care insurance, which was not initially included in the previous caluse.
Dearden Industries is the largest petroleum refinery in the state of Pantome. There are other companies under the Dearden umbrella that have branched out into similar areas. This company has about thirty thousand employees, 65 percent of them are men. One third of the employees work in the refineries and by doing so has been exposed to numerous chemicals. One of the known chemicals, benzene, has been the cause of some lawsuits in the past. Health risks that are associated with exposure are pulmonary diseases, leukemia, and skin disorders. Twenty percent of the employees are smokers and six percent have admitted to having an addiction to alcohol. The employees with office positions spend long hours on the phone and computer. The general complaints among this group are stress related injuries. Nearly half of them (40 percent) have severe headaches regularly. There are also instances of mental health problems (40 percent), high blood pressure (28 percent) and high cholesterol (22 percent). There is a high risk that some of them will develop coronary heart disease in the future.
The plan that was selected for Dearden Industries was the Castor premium plan. This plan does cover preexisting conditions. Selected services were added which are sure to increase the number of individuals enrolled. Preventive and diagnostic services were also added, and because the quantity is very responsive to price, the decision was made to charge a higher copayment to keep cost low and to reduce the risk of employees over using the benefits provided. Emergency dental care and acupuncture are also included. In 2008, the decision was made to enhance the plan after a cost effective analysis was performed. After reviewing the cost effectiveness of different services the decision was made to add gastric bypass and kidney dialysis.
As a result of low utilization of services the cost are lower and this increases profits. This has been associated with the fact that the employees of the Dearden Industries are many in number, and that most of them have different medical complications that require insurance covers. Nevertheless, the company employees fall ill less often due to proper management plans, which have resulted to very little compensation benefits paid to the clients. Since this company has a large number of employees, the possibility that actual costs will considerably surpass estimated costs is quite low.
It is notable that Dearden Industries could consider the option of ignoring to offer their employees the subscribed insurance covers. However, according to the results of several studies, having health insurance is valuable both to the employer and to the employees. Health care insurance ensures that employees receive appropriate and required health care. Additionally, offering health insurance has been associated with lower morality and better health outcomes, which translates to higher performance and organizational productivity. Therefore, the inference that offering insurance coverage for the Dearden Industries employees translates to improved productivity since the employees would have confidence on their health care solutions.
Reference:
Dearden Industries. (2013). Company Administration. Retrieved from www.deardenindustries.com
