One more retailer is making headlines by changing the mix and method of their employee benefits. Total Compensation is what we’re really talking about here and we all know benefits are only one part of that equation – but with the rising cost of healthcare, benefits certainly are the most dynamic piece of the equation as of late.
If an employer suspects their employees might be eligible for subsidies through the state health exchanges/marketplaces required by the PPACA this move will certainly be on the table. The big question is whether employees will be able to find the same affordable options for benefits in the individual market of the public exchanges as they were getting under a group employer plan. With Trader Joe’s offering $500, if there’s more than a $500 increase in the cost of coverage after subsidies, the employee is worse off. And if so, will that $500 threshold get squeezed as medical costs inflate? Is the company going to up this occasionally to keep the same buying power and will they vary that amount to account for the various rates among the states? ($500 may go quite a ways in the Midwest, but not so much when you get out of flyover country.)
And of course, that’s just the surface level issue. If we dig deeper we get into thornier issues, such as who’s now vested in the employee’s health risks (if behaviors drive the majority of health care costs – which they do – now if someone who’s getting a subsidy is a smoker, don’t all taxpayers have a vested interest in them kicking the habit?) Ah, I love the froth and fervor of the debate. Our employment world has changed and will continue to. We are living in interesting times. Are you affected by this? Please comment below and tell your story.
The ability to attract and retain a workforce is what’s at stake here for the employer. For the employee, it’s a much more personal consideration of the tradeoffs between health and wealth.
Let’s put our typical HR Tech spin on this: Where is the decision support for the employee? There are certainly systems that an employer can use to help employees decide between their plans if multiple plan designs (PPO, HDHP, HMO) are offered. Who will build the Rosetta Stone that simplifies employer group plans, exchange offered individual options, voluntary products (accident, critical illness), preventative wellness and so on while taking into account subsidies, incomes and perhaps multiple under 30 hour jobs?
If there’s a vendor taking a swing at this “feed-the-world, while-curing-cancer” type project, you have our attention. Please comment below and we will sing your praises.