Benefits are another core element of a Total Rewards Program that no longer focuses primarily on insurance benefits. Benefits are designed to help protect and ensure financial security and includes retirement plans, health and welfare plans, and programs that provide pay for time not worked.
Identify at least one nonmandatory or voluntary plan that you feel should be made mandatory and why.
Identify one of the impacts of Medicare Reform and identify how the identified impact has affected employers and/or employees.
What are the major differences between a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO)?
Describe the characteristics of an employee that would benefit the most from choosing a PPO. Do the same for an employee that would benefit the most from choosing an HMO.
Share your experiences in your narrative.
Full Answer Section
Impact of Medicare Reform:
One significant impact of Medicare reform has been the increasing cost-sharing for beneficiaries. This includes higher premiums, deductibles, and co-insurance. This shift has affected both employers and employees. Employers face rising costs for retiree health benefits, as many retirees rely on Medicare as their primary insurance. Employees, especially those on fixed incomes, struggle with the increased out-of-pocket expenses, potentially delaying necessary medical care or foregoing it altogether. This can lead to poorer health outcomes and greater long-term healthcare costs.
PPO vs. HMO:
Here are the major differences between a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO):
Employee Profiles:
- PPO: An employee who values flexibility and choice would benefit most from a PPO. Someone who is willing to pay more for the option to see specialists without referrals and to have a wider selection of doctors, even if some are out of network. For example, someone with chronic conditions who sees several specialists or someone who travels frequently and may need medical care in different locations.
- HMO: An employee who prioritizes lower out-of-pocket costs and is comfortable with a more managed approach to healthcare would benefit most from an HMO. Someone who is generally healthy and doesn't anticipate needing to see specialists frequently. They are willing to work within the network and get referrals to keep costs down. For example, a young, healthy individual or a family on a tight budget.
Personal Narrative (Example):
In my previous role, I witnessed firsthand the challenges of navigating healthcare options. A colleague, Sarah, was diagnosed with a rare condition requiring specialized treatment. Her employer offered both PPO and HMO plans. Sarah, initially drawn to the lower premiums of the HMO, quickly realized the limitations when she needed to see specialists outside her network. The referral process was cumbersome and time-consuming, delaying her treatment. Ultimately, she switched to the PPO, despite the higher cost, to access the specialized care she needed. This experience highlighted the importance of understanding the nuances of different health plans and choosing the one that best aligns with individual health needs and risk tolerance. It also underscored the value of having access to benefits counseling to help employees make informed decisions about their healthcare.
Sample Answer
Let's explore these aspects of employee benefits and healthcare.
Non-Mandatory Plan That Should Be Mandatory:
I believe short-term disability insurance should be made mandatory. While some employers offer it, and some employees opt to purchase it, its absence can create significant financial hardship. A sudden illness or injury that prevents someone from working, even for a short period, can be devastating without income replacement. This can lead to debt, housing insecurity, and delayed medical care, exacerbating the initial problem. Making it mandatory, similar to Social Security, would provide a safety net for all workers, ensuring a basic level of income protection during temporary periods of disability. This benefits both employees (financial security) and employers (increased employee morale and reduced absenteeism due to financial stress).