Continuation of Sodexos Medical Benefits - Research Paper Example

Continuation of Sodexo’s Medical Benefits Plans Issues of the of the Continuation of Sodexo’s Medical Benefits Plans Issues Part 2 ANALYSIS OF MAJOR BENEFITS ISSUES AT SODEXO On paper, it is admitted that Sodexo as an organization has one of the best and most comprehensive medical care and coverage plans available. This is easily ascertained as we see that the organization has carefully considered almost every aspect of company life and employee needs in this regard. Virtually everything from life insurance and short and long term disability benefits to online counseling, leave policy and dental and eye care has been looked at and covered. In addition to this the other facilities and discounts like Lifeworks, flexible working hours, education assistance, service appreciation awards, career growth and training programs for employees with growth and leadership potential have also been considered. This in my opinion would make Sodexo’s plans comparable to Google, Microsoft or any other Fortune 500 company. Basic Issue, Purpose and Relationships But as they say, the strength and efficacy of a plan lies in its weakest link, and in this case, the link was a service provider, namely Aetna. It has been shown that Aetna has been a preferred company for Sodexo’s Group Life Insurance Plan. Therefore I also assume that this company is involved in the administration and provision of services under its Short and Long Term Disability Plans. Interestingly this fact was uncovered by delving into the Exit Interviews of quite a number of employees who had been bitter and critical in their appraisal of the coverage and degree of care administered by the insurance company even under the Business Travel Accident Plan. Further investigation into the matter by a combination of HR and Medical Staff determined that no less that 15 such instances had occurred in the last one and a half years. Since staff was enrolled in the insurance plans automatically and the coverage was renewed every year, Aetna considered that they simply could not lose. As far as the relationships between fraud in the medical coverage and employee dissatisfaction are concerned, a little analysis will put forth that since the Short and Long Term Disability Plans as well as the Benefits Travel Accident Plan were related, one often leading to another, the connivance and inefficiency of Aetna staff was often the culprit leading to improper and insufficient attention to non-managerial staff. In many cases, such staff had to resort to other or personal means to meet these deficiencies in care. Since the complaints were few and far between, Aetna had managed to get away with it unscathed so far. The amazing thing is that these very staff took proper care of Sodexo’s managerial and higher level staff quite well in similar instances of accident and disability. Clearly they knew who was wielding the power here. The purpose of this paper is not only to highlight this deficiency but also its causes so that the erring staff is removed or the coverage is given to another insurance company. Such a state of affairs can hardly be tolerated. It is also desired to review the efficacy and management of all the different types of medical coverage so that similar or other deficiencies can be highlighted and corrected. Thus we will accomplish a thorough review of all types of medical coverage given by Sodexo, and by doing so positively impact employee satisfaction. It is also interesting that one or two lower level employees had highlighted these in their assessments of the available benefits at the company, and even made a remark in their employee satisfaction surveys, but these were unfortunately overlooked by HR as being too unlikely to be true. It was assumed that the employees were over-reacting to an already bad or painful situation. For one thing, this state of affairs may indicate that HR has become too complacent and sure of itself and therefore it is suggested that future employee surveys and benefits assessments be independently conducted and the results summarized and analyzed by a professional firm. The names of the participants must never be revealed or written and the results and analyses along with corrective action recommended, if any, must be sent directly to the CEO or the head of the corporate governance body in Sodexo. Part 3 Academic Resources on Benefits Plans and Relationship with the Issue In this section we will consider the history, uses, advantages and disadvantages of benefits plans in the available literature on the subject. We will also be striving to see what the best practices are in this connection, and whether we can apply these principles to plug the gaps and improve the functioning of the benefits plans at Sodexo. A defined benefits plan is one where employee benefits are sorted out using a set formula based on his or her duration of employment, salary history and the like (www.investopedia.com). It is clear that for the most part, employees at Sodexo are enjoying the benefits of comprehensive coverage that includes such things as dental and eye care, accidental, short term and long term disability benefits and in fact even death benefits to the heirs of the family. This speaks of all the elements of a plan where the finance department has to consider investment possibilities to get a return that would cover the retirement benefits accruing to an employee as well. What is more, at Sodexo all employees of age 21 or older are fully vested for the purpose of insurance benefits on completion of three years employment with the firm. It is also possible to get tax benefits under such plans. Under a defined benefits plan, an employee is virtually guaranteed a certain amount in terms of annual retirement income (About.com, 2009). This is in turn based on a number of factors such as age, last salary drawn and years of service with the company. Some of these plans also have an option whereby the employee can convert his or her future income into a lump-sum payment at retirement. Social security may be classified as a defined benefits plan, as it gives the retired worker a chance to earn an annual pension, based on his or her lifetime earnings. The best part is that it is even adjusted for inflation on a yearly basis. Having a good defined benefits plan is one thing, effectively administrating it is another. Usually HR and Administration is concerned with looking at the administration of a benefits plan, and on this account may also use the services of a doctor or surgeon. There is considerable room for outpatient billing fraud, hospitalization and medical malpractices and even some insurance companies have been known to defraud employers in this regard (UNCTAD, 2010). This often happens when this important function is outsourced. Since the premium and coverage is decided upfront and paid regularly, there are opportunities to mislead employees to take additional OTC drugs, painkillers and the like that may complicate the medical condition instead of curing it. The monetary consequences of these are all too evident. The insurance company may stand to gain from additional premium next year. Lack of adequate care and improper degrees of care are common complaints. In some cases employees on medical panels are made to wait long periods- then sent home after a hurried and cursory examination that does not even look at the problem in adequate detail. Quite naturally an employee gets fed up with a few instances of this- then decides to use his own resources to cure the problem. He does not want to bother his company, but as a result, the culprits get off scot-free. Both Government hospitals and private clinics in connivance with unscrupulous insurance companies stand to reap the benefits (Insurance Information Institute, 2011). By all accounts, medical related insurance fraud in the USA and other developed economies has become rather rampant (PR Newswire, 2011) the inefficiency and ineptitude of Government to handle the issue has also been one of the key issues regarding Obama-care. The outcry is not about the additional debt it will get us into- rather it is about the ineptitude and uncaring attitude of Government agencies that will administer the plan according to their own sweet will (Ponnuru, 2009). The President himself is sending mixed signals as he indicates that the status quo will not be tolerated, too much professionals are making Medicare more costly for families. But the fault really lies in the system. We should limit the number of specializations and strive for a better standard of basic care administered by our general practitioner (Reuters, 2011). Charges include false claims, kickbacks, conspiracy to defraud and encompassed areas from medical tests and equipment, home healthcare treatments, physical and occupational therapy. Clearly the case of Sodexo and Aetna’s mishandling is not one that is isolated. By some estimates, medical fraud in the USA amounts to between $60 and $600 billion per year (Author Unknown, 2009). Part 4 This section will probe into the details of the case and record its findings. The case was brought to light when the Exit Interviews of former employees were checked. It transpired that more than a few of them had mentioned the case of inadequate or improper care received at the hands of the insurance company Aetna and its staff. In fact there were 15 separate complaints of such nature in the past one and a half year, which is quite appalling. Even HR could not escape the blame and though it said that maybe the employees were over-reacting, it was a matter of concern that the problem was not highlighted, probed into and properly investigated. An Exit Interview is a face to face interview conducted with an employee who is leaving the organization. The purpose of this exercise is to record their overall working experiences and feelings during their tenure, and also note any positive and negative comments they make concerning the organization, its setup, policies or staff handling personnel and professional matters. It can point to deficiencies or defects that might have not been highlighted otherwise. In this case, it brought to light the instances of poor and inadequate service from Aetna staff. As an action plan, it was decided to call in whoever of the 15 complainants was available in the city and could come to a meeting with a Special Committee consisting of the HR Head, the CEO and the Head of Corporate Governance at Sodexo. They were not however told the participants of the Committee, only the nature and purpose of the meeting. Participation was made entirely voluntary. When the time for the meeting arrived, nine of the former employees had turned up. This made for an interesting majority of the candidates. Although retired, they were still a little apprehensive on seeing the Committee. It goes to the credit of the CEO and the HR Head that they immediately put the attendees at ease by offering them snacks and coffee in an informal setting. The party then proceeded to the Conference Room at Sodexo. The participants had already been made aware of the nature and need for the meeting so they were aware of the agenda. A Confidential Group Interview of this nature is an exception rather than the norm, and highlights not only the importance of the problem but also the fact that higher management is conscious of its implications and is taking steps to investigate and correct the defects. The HR Head began by thanking everyone for coming and then explained the reason for the meeting. She highlighted the fact that the retirees had recorded complaints in their Exit Interviews and regretted that this had not been followed up till now. She however promised that a full and proper investigation would now be conducted into the matter. On his part, the CEO spoke up to reassure the retirees that everything would be kept confidential and that they had no need to worry- in no case would their names be revealed to the insurance company nor its medical team. He also advised them to keep the proceedings of the meeting to themselves. He then invited the retirees to speak about the unfortunate events that had occurred in connection with their visits and treatments at the insurance company courtesy of their medical team. Meanwhile the HR Head and the Corporate Governance Head were busy taking down details. Records of previous visits of the retirees were also checked and placed in a separate file as evidence. When the symptoms and related conditions were matched by an independent and qualified surgeon and doctor, quite a few irregularities were observed and discrepancies noted. False and expensive treatments were also recorded. All this would form the basis for accusing Aetna and its medical care team of fraud carried out on Sodexo through its lower level employees. In the end, the CEO once again praised the retirees for complaining about the deficiencies in the healthcare system. He assured them that they would not be seen as complainers and troublemakers, but rather as whistleblowers that highlighted the faults in an otherwise good system. The bad eggs would be thrown out of the basket, the dead fish out of the pond. No more would this state of affairs be tolerated. When the rest of the people had left, the CEO also addressed the HR Head and the Head of Corporate Governance together and stated that such complacency would not be tolerated at Sodexo. As such the company had a responsibility towards the employees in much the same manner as the employees had responsibilities and duties toward the organization. It was only when they worked together in total harmony and without fear and suspicion of each other would the goals and objectives of Sodexo be achieved. At the same time people would see Sodexo as a great place to work for, making it an Employer of Choice or a Preferred-Employer. As such, these companies never have difficulty attracting and retaining the best staff, no matter what the economic conditions. So basic trust and cooperative effort, it was reiterated, can have enormous repercussions for the future of any business enterprise. As a rewarding gesture, the CEO directed a company van to take the retirees back to their homes as well. Part 5 In this part of the paper, we will create a developmental strategy by offering solutions and options that are appropriate for the benefits issue. The expected outcomes will also be addressed. As discussed previously, we have seen that the HR Head, CEO and Head of Corporate Governance have already defined and discussed the problem and conducted a meeting with the retirees who had been affected and had made complaints against the insurance company and its unprofessional medical team. All that remains is for the management of Sodexo to discuss and take an appropriate course of action for its employees. The CEO of Aetna was contacted by the CEO of Sodexo and the events that had occurred were explained. As expected, the CEO of Aetna was dismayed and apologized profusely for what had occurred. He then promptly had all the medical team members in question summarily fired for reasons of malpractice and attempts to cause medical fraud as well as bring a bad name to Aetna. No one was spared and no excuses tolerated. In fact they were told that they should not refer to Aetna as a former employer as well. This action was sad but necessary if we are to clean up the messes in our system. The pros of this action is that these erring staff would have to prove themselves worthy of remaining in the medical profession, and tell the truth in regard to what had occurred at their former employers. The cons of this action is that they might find it very difficult to find a job and may even have to change professions. A new medical team was appointed to attend to Sodexo employees, their credentials and personal and professional conduct being thoroughly checked as well. The pros of this action are that Sodexo staff never has to worry about being shortchanged in regard to medical treatments with Aetna again. Thankfully they appear very professional and courteous and are especially considerate to Sodexo staff. It appears that the circumstances and fate of the previous team had become known through the grapevine (Pugh, 2010). . One positive outcome of the entire case is that the new Aetna medical team is very much conscious of its responsibilities. The second outcome is that it has made life better for the rest of the Sodexo employees who are still under the benefits plan. The third outcome is that HR and Corporate Governance now takes its responsibilities very seriously indeed, regardless of nature of complaint and level of employee. Different aspects of the medical benefits plans and their quality of coverage are also reviewed from time to time. References Author Unknown (2009). Medical Fraud has taken a Toll on America’s Healthcare System. Accessed on 29 July 2011 at www. promotehealth.info. Hartwig, R.P. (2011). Reinsurance Market Trends and Perspectives: Reinsurance in the Age of Black Swans. July 20, 2011. Insurance Information Institute (2011).The Online Insurance Fact Book, 2011. PR Newswire (2011). Insurance Fraud on the Rise, HVAC Investigators, 07/06/11. Ponnuru, R. (2009). The Fatal Flaw of Obamacare. Time Magazine, August 17, 2009. Pugh, T.(2010). Recession is fueling a boom in insurance fraud. McClatchy Washington Bureau, 03/11/10. Reuters (2011). US charges 111 in largest Medicare fraud crackdown, February 16, 2011. Sodexo. (n.d.). Retrieved July 8, 2011, from Benefits: http://www.sodexousa.com/usen/careers/benefits/benefits.asp#other Staff Writer (2011). Definition and Characteristics of a Defined Benefits Plan. From www.investopedia.com. Staff Writer (2009). Defined benefits plans and examples. From About.com. UNCTAD (2010). Selected Issues in Corporate Governance. UN Publications. Read More