Ensuring Employees Pay for Extra Cost of Healthcare - Essay Example

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The author states that among the causes of additional care cost increase is the trending rise is in cases of lifestyle-related complications. In response to this, employers should implement programs that would ensure employees to incur the cost of extra premium spent on lifestyle-related illnesses.  …
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Ensuring Employees Pay for Extra Cost of Healthcare
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Ensuring Employees Pay for Extra Cost of Healthcare
“As an employer, I understand the challenges firms face due to the ever-increasing cost of coverage premiums. This statement is affirmed by statistics from the CDC that the cost of insurance premiums continues to rise. Consequently, employee medical claims are on the rise. The CDC estimated the cost of average annual premiums paid by employers in 2010 to be $13,770 for family coverage and $5, 049 for single coverage (1). According to reports by the Wall Street Journal, there was an anticipated rise of 4.4 percent on employer-based benefits in 2014 (Johnson 1).
Among the leading causes of additional care cost increase is the trending rise is in cases of lifestyle-related complications. In response to this, I believe employers should implement programs that would ensure employees to incur the cost of extra premium spent on lifestyle-related illnesses and chronic conditions. Employers should device an economic program that would ensure employees compensate the extra cost over premiums spent on lifestyle-related diseases. The following is a proposed framework that employers would use to ensure employees pay for extra costs above coverage premium spent on lifestyle-related conditions.
First, employers should schedule all chronic conditions that are lifestyle-related and contribute to the increase in cost of premium. A possible list should include conditions such as diabetes, some forms of cancers, heart disease, and obesity-related illnesses. In order to ensure a robust program, accredited health care professionals should approve the scheduled list of complications and ascertain they are lifestyle-related.
The second process in the framework should involve calculations of direct and indirect costs of incurred from health-related illnesses. Direct cost calculation is simple and can be estimated based on extra expenditure the company has on inpatient and outpatient services. They include extra expenditure on services including surgeries, radiological processes, laboratory tests, and drug therapies. Indirect costs include an estimation of resources forgone by the firm or company because of lifestyle-related health condition that affects an employee. The value of lost work because of absenteeism should be calculated based on accumulated wages throughout the period. Other forms of indirect cost include the value of increased insurance incurred by the company because of lifestyle-related conditions.
The third aspect of the framework is to calculate above-the-coverage premium expenditure per-individual or family on lifestyle-related conditions. The direct or indirect cot should be valued as at the current economic conditions considering factors such as inflation. Through the model, the company can calculate the cost above that stated in the coverage premium.
In most arrangements, employers pay half the premium as portion of the benefits package. Any calculated cost incurred by an employer that is above half the premium spent on lifestyle-related conditions should be deducted from wages or salaries of the employee (s). That will compensate the high cost of healthcare premiums that employers spend every year on personal or family packages. The human resource department should implement the proposed program. My justification for the proposed program is to compel employees to reform their lifestyle, and consequently the lower expenditure on employer-based benefits.”
Works Cited
Centers for Disease Control and Prevention (CDC). Rising Health Care Costs are Unsustainable. October 23, 2013. Web. March 3, 2015.
Johnson, Avery. “Expect Health-Insurance Premiums to Rise.” The Wall Street Journal. March 22, 2014. Web. March 3, 2015. Read More
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