Employer vs Employee Contribution to Healthcare with Union Workers - Thesis Proposal Example

Background Summary Employees working in any sector are considered to be “backbone” of any nation, particularly its economy. This is because physically as well as mentally healthy and effective employees exhibiting optimum productivity will only accentuate their organizations’ fortunes thereby positively influencing the economy. However, when that “backbone” is broken or affected because of ill-health, it will not only “paralyze” their respective organizations’ functioning but also their respective families and even the state or nation’s economy. So, it is evident that healthy humans or workers can only put in their best efforts and elevate organizations’ performance, their profits, their market share, and so on. This being the case, it is very crucial for the organizations, labor unions, and even government to adopt or come up with policies to safeguard and improve the health of the employees. Speaking of government’s role, although it is a joint federal/state system, the federal government has given the main responsibility of regulating health insurance policies regarding employees to the states. In addition, governments are encouraging organizations to come up with their own health insurance plans called employer contributed health insurance. under the McCarran-Ferguson Act. States regulate the content of health insurance policies and often require coverage of specific types of medical services or health care providersthey have The 1985 act of ‘The Consolidated Omnibus Budget Reconciliation’ required that every employer having twenty or more employees should provide nonstop access to health coverage to workers who leave their jobs. Moreover the 1996 Act of ‘Health Insurance Portability and Accountability’ (HIPA) guarantees the employees that their company authorized health insurance cover will not be revocable under any preexisting exclusions. (Patel and Rushefsky 2006). Based on this enticing factor and other necessities, the health insurance cover can be enlarged. Provide a tax credit to companies that maintain or increase the size of U.S. workforce relative to workforce outside the United States...prepare workers for retirement; provide health insurance (Sullivan, 2008). “Small businesses currently get a tax deduction for health insurance paid, and even this is limited to only an income tax deduction for the owner. Convert this deduction into a dollar-for-dollar credit. Let small businesses reduce their tax burden by how much they spend on health insurance premiums and health savings account (HSA) contributions. Furthermore, allow small businesses to get the best deal possible for their employees by letting them purchase health insurance across state lines” (Ellis, 2009). For a long time, employers have used healthcare contribution schemes as a way of attracting and retaining highly skilled and qualified employees. Through healthcare contributions, employees together with registered family members can access free healthcare facilities across a number of hospitals. Jon and Trude (2009) notes that there are of theories that explain the benefits of healthcare contributions. One prediction of these theories is that companies contributing more to healthcare tend to pay lower wages (Abraham, Thomas& Anne, 2009). Therefore, the healthcare costs will be borne largely by employees. This shows that employer efforts to reduce coverage or implement other changes while pursuing cost control themselves have a cost. If an employee feels that these benefits diminish the value of health benefits, they may leave the employer unless they are getting such benefits elsewhere within the organization. Alternatively, if an employee feels that he is better with more wages but fewer healthcare benefits, the employee may leave that organization. This suggests that employer efforts to contain healthcare costs will not have a positive impact on profits owing to a number of staff exits that are associated with low wages even though healthcare benefits are good (Jon &Trude, 2009). Therefore, the key question for employers is how to package healthcare benefits with other compensations like wages in order to appeal and retain employees in a competitive labor market. Problem Statement In many countries, employee unions are losing their influence on fighting for proper terms of healthcare contribution without necessarily reducing other benefits (Frostin& Adams, 2012). This is attributed to the fact that a number of companies are changing from being manufacturing-oriented to the current scenario on lenient employee numbers with many companies being service oriented. The few that are manufacturing oriented are employing automated methods of production that employ fewer employees. This study aims to find out the actual beneficiaries of healthcare contribution among union workers in the wake of declining influence of unions. The research will also find out the criteria companies use when they allocate benefits in comparison to the healthcare contribution the company makes to every employee. This study is necessary since it will try to explain why people join unions and strongly support unions and if they do benefit at all from such unions when negotiating for healthcare benefits. Besides facing a number of deductions from the company, each union member will contribute a certain percentage of his salary to union fees every period, which could be one year or otherwise depending on the union by-laws. This is an added cost to the employee. Purpose Statement The purpose of this paper is to examine the impacts of employer and employee contribution to healthcare schemes while analyzing the benefits accruing to employees from these schemes. The nature of the topic dictates the use of both chronological and comparative analysis of the benefits employees receive from the healthcare schemes relative to the services they offer to their employers. The focus of the study will be on the economic costs and social benefits associated with healthcare contributions. The study will sample out a number of employers with union employees who contribute to healthcare schemes and find out the nature of bargaining power the employees have with respect to how much they contribute relative to what the benefits associated with such contributions. The study involves visiting employer sites to collect relevant information regarding the contributions and if the employees have a say on the amount to contribute relatively to the benefits they anticipate receiving. Research Questions To achieve the objectives of the study, the researcher will be guided by the following research questions; (1) How do companies determine the amount of money to contribute to health care schemes in relation to the employee wages? (2) How far does the company engage employees when sourcing healthcare benefits schemes? (3) What are the opportunity costs of having a good health care scheme? By addressing these questions, the study will explain the role of an employee when the company is making decisions pertaining to health care contributions and the benefits associated. In addition, the study will find out the associated opportunity costs and if there are better alternatives to such healthcare schemes. Methodology The researcher will employ primary and secondary data collection methods through physical visit to the location so that he can conduct interviews and if possible have a glimpse of the various techniques companies used to calculate compensation for their various employees and also make use of the available literature from previous research studies. At the companies, the researcher will find out who are the participants when making such crucial decisions and the feel of the company if at all employees could be requested to come up with a one-on-one rate for each employee depending on his/her healthcare requirements. The researcher will issue questionnaires to employees where he will collect information regarding how the whole exercise of contributing money is carried out and find out the feel of employees on how the exercise should be conducted. The researcher will conduct individual visits to the healthcare providers where he will find out the nature of services employees receive relative to the contributions received and if possible observe on how the whole exercise is carried out when offering services. The study shall employ a semi-structured approach to interviewing since this method shall ensure there is consistency in the research, and it will allow comparison of the data collected. The study aims to analyze the results got with the various regulations that are in force, which provide for employee contributions. The study will also analyze the results with respect to union expectations and by-laws to see if the employees do have a fair healthcare scheme. The study will provide recommendations on how the healthcare scheme should be handled to be of benefit to both employees and employers by increasing employee morale and output while the employers increase their level of profitability. In addition, the study shall provide recommendations on the best way of involving various parties when coming up with the best scheme to avoid high staff turnovers that related to healthcare benefits. References: Abraham, J.M., Thomas, D., & Anne, B.R. (2009). Access to HealthInsurance at Small Establishments: What Can We Learn from Analysing Other Fringe Benefits?Inquiry 46: 253-273. This article is about health insurance fringe benefits at small establishments in human resource development. Buchmueller, T., &Alan, M. (2009). Employer-Sponsored Health Insurance and the Promise of Health Insurance Reform. Cambridge, MA: National Bureau of Economic Research Working Paper No. 14839. This article is about reforms in the employee insurance sector. California Association of Health Plans.(2009). The Rising Cost of HealthCare: Causes.3-22. This article is about healthcare provision in health care canters. Carter, S.B., & Richard, S.(2010). Work and Welfare: In Historical Statistics of the United States.Cambridge, UK: Cambridge University Press. This article is about human resource development and retention. Chen, Y., Stuart, S.R. (2008). Local amenities and five-cycle migration: Dopeople move for jobs? This article is about human resource management and retention. De-Silva, S. (1997). Human Resources Development for Competitiveness: A Priority for Employers. International Labor Organization, ACT/EMP Publications, 2-18. This article is talking about human resource growth and development. Frostin, P., & Adams, N. (2012). Employment-Based Retiree Health Benefits: Trends in Access and Coverage. Employee Benefit Research Institute. 377, 1-24. This article is about employee access to healthcare services in healthcare canters. Jon, B.C., &Trude, S. (2009). Managing Costs, Managing Benefits: Employer Decisions in Local Health Care Markets.Health Services Research, 38(1), 358-362. This article is about human resource management (HR costs and benefits) Livingstone, A. (2011). Employee Free Choice: Amplifying Employee Voice without Silencing Employers-A Proposal for Reforming the National Labor Relations Act. University of Michigan Journal of Law Reform, 45(1).219-259. This article is about human resource rights (Fighting for the rights of employees) Overell, S., Mills, T., Roberts, S. Lekhi, R., &Blaug, R. (2012). The Employment Relationship and the Quality of Work. Provocative Paper 7 of The Good Work Commission,45-53. for fun? Journal of Urban Economics 64: 519-537. This article is about human resource management (measuring productivity relative to benefits.) Read More