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Report on Health Care Bargaining

   

Added on  2020-05-04

8 Pages1647 Words32 Views
Running head: HEALTH CARE BARGAININGHealth care bargainingName of the student:Name of the University:Author’s note

1HEALTH CARE BARGAININGIntroduction:Positive and cooperative relationship is necessary between employer and employee tofoster efficiency in business organization. Effective liaison and interaction between the HRmanagement and employees are critical in addressing labor relations issues in a businessorganization. Common employ related concerns include minimum salary, compensation andother benefits and equal pay and justified workings hours. Human resource laws and regulationsis necessary in these area (Ehrenberg & Smith, 2016). The issues related to labor relations isfurther highlighted in this paper by the case study of GMFC. The main issue in the case is relatedto the sudden discontinuation of health care coverage and resultant demand of increasing salaryby employees. This paper further gives insights into the benefit of health care benefits and itsrelation with employee relation issues. Issue at GMFCGMFC is a multi-division company with about 50, 000 employees. Initially the companywas providing life time health insurance benefit of 2 million dollar per employee. However,recently they decided to self insure their health care coverage and subcontract administration toVesuvius Health Care (VHC), one of the five largest health care insurance companies in UnitedStates. The main challenge for GMFC in adapting the new healthcare plan was it was associatedwith additional cost for the company. Hence, considering the high expense and rise in health carecost, the company has decided to adapt the cost cutting strategy of discontinuing health carecoverage for employees. This move resulted in demand of salary hike and increased pressure ofthe labor union of management to increase the compensation package for employees. Alternative options for GMFC

2HEALTH CARE BARGAININGGMFC’s move of reducing their expenditure is correct considering huge competition inbusiness organizations. To retain the competitive advantage in business, it is critical for thecompany to reduce irrelevant expense and take cost cutting measures. Hence, the decision isbeneficial for the company considering challenges in business and future perspective. However, to implement the decision of implementing health discontinuation coveragewithout any controversies, there is a need for active involvement of the human resourcedepartment in resolving the labor union issues. Some the relevant actions that GMFC can take inthis scenario include the following:Accept the proposal to change coverage to new plan- The employer GMFC can go aheadwith new compensation structure proposed by PPACA. This is a relevant option becausecompensation package are developed by the company considering the basis pay, medicalinsurance options, different allowances and conveyances and retirement options for aspecific job position. Considering all the above factors can help employer to predict thetrue total cost per employee and providing appropriate compensation package toemployees (Fatima & Ali, 2016). Focusing on appropriate compensation package is alsonecessary to increase the satisfaction level of employees and decreasing the attrition rate.Paying the federal penalties- If GMFC decides to cancel the health benefit scheme, thecompany will then have to proceed with the federal penalties according to the CadillaxTax (Elliott, 2015). By taking this option, the company can use the cost saving to theiradvantage to fulfill other important business purpose. However, there are severalchallenges for the company in going ahead with this option. This would seriously hamperthe brand image and reputation of the company (Elliott, 2015). The employees willdevelop resentment against the company and this would ultimately affect productivity.

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