C428 Paper 2SK1 Seamus Company Healthcare Plan |Name College of Business, Western Governors University

Seamus Company Healthcare Plan Name College of Business, Western Governors University February 2023 Seamus Company Healthcare Plan A1. Due to the increasing costs of healthcare, the Seamus Company is looking for an affordable answer to rising healthcare costs and maintaining the quality and service at a reasonable price that Seamus Company has provided its employees. Moving away from the current fee-for-service plan. Seamus is looking for the best plan available. The current Fee-for- service plan costs are on a continual rise. They contain unneeded services that increase the overall expense not only to Seamus but its employees. Managed-care plans offer the ability to better control costs along with catering to the needs of our employees. The Big Three After looking at available options for our employees, cost savings, health improvement, tax advantages, and overall quality we are looking at three plans. All plans provide for better- managed care. 1. Preferred Provider Plan 2. Health Maintenance Organization 3. POS Health Plan Each plan allows us to move away from the current costly fee for service plan. Preferred Provider Plan Preferred Provider Plan (PPO). Is a managed health care plan that uses a provided list of doctors, specialists, and others that are subscribed to the plan. PPOs also give our employees better flexibility in seeking outside services that better suit their needs. It also has wider access to doctors, allowing for more flexible care. As not all employees will fit into one coverage plan. This plan works very well for employees who can not just on a single physician to meet their family needs. You do not have to pick out a primary care physician for all the employee or their family to see. This allows them the flexibility to cover needed specialists or needs to cover family members who may not live in the same household, but they are required to cover them due to legally binding agreements. Drawbacks are the increased cost and deductibles, and copays to the employee. They also cover less in out-of-network services requiring the employee to pay more out-of-pocket cost. Benefits are more initial controlled up-front costs, but the employee can better fit the coverage to their needs. Health Maintenance Organization Health Maintenance Organization (HMO). Is a plan that uses a more structured list of providers. Those providers have agreed to a reduction in rates if the patient stays within the network of the plan provided. But additional costs can incur by going outside of the network for services that are not approved by your current network doctor. Costs are better controlled, and it gives our staff options to lower cost on available plans and initial copays. Each employee chooses a physician from a large list provided and that physician then directs the individual or family care. They take charge of providing direct care to the patient and can direct them to specialists as needed thereby controlling unneeded medical costs. By using the approval and recommendation from the primary care physician the out-of-pocket costs to see a specialist are less than they would be going out of network. The HMO plan still covers the employee or family if they are out of network area and need emergency care. Benefits good coverage for employees and family will by keeping costs low. Provides good quality coverage that fits most of their needs. Drawbacks are the limited list of physicians, limited control of individual access leaving employees to look for better services. Point of Service Plan Point of Service Plan (POS). Is a plan that offers the affordability of an HMO but allows your physician the ability to better tailor the services needed by the patient. It does require the employee to pick a primary care provider and they can also see other physicians or specialists to better suit their or a family member’s needs. The employees get a better deal by going directly to the primary in related costs. But they will pay a little more for outside services not approved by the primary physician. This type of program works well for employees that may need to see an occasional specialist or out-of-area physician, clinic, or specialist. Benefits a better plan than an HMO but not all the costs of a PPO plan. Drawbacks are the requiring of a primary care provider that may not be your current physician. Seamus Meeting the Needs. A1a. All three plans help us control the rising cost of health insurance. By enrolling in a plan, it allows us to work with our employees in providing them with great medical coverage and ensuring that we meet the needs of our employees. In changing from the current fee for service plan. We have an excellent staff and we want to keep our key employees, by changing the plan we meet the needs of Seamus company in cutting overall costs and meet the needs of good quality medical coverage for our employees. The plans listed above provide the coverages that are needed and all three provide great coverage. The main goal is to control costs for the Seamus company. It is also known for taking care of its employees and retaining their services. This goes a long way in keeping great employees and influencing the prospective quality of new applicants to fill new positions. Changing our current plan to a better-managed care plan will allow us to better control the costs and savings these plans provide. Each plan has a yearly negotiated rate that helps control costs and provide great services. All plans allow for Seamus to pay directly into the plan and enjoy the added tax benefits. It streamlines the services and allows our resource management staff to apply their needed efforts elsewhere. Thereby cutting costs of the time- consuming plan we have now. The Plan A1ab. As CFO I am recommending, we move to the Preferred Provider Plan. Of the three plans, the PPO provides the greatest flexibility for our staff and their families The Preferred Plan reduces overall costs to the Seamus company. Allows direct payments into the program giving Seamus a tax advantage. It also helps us keep our key people, they get to keep their current family physicians, and expanded coverage is provided with little or no inconvenience. Payments and deductibles will be lower as an added benefit. Meeting the Goals A1b. (Control and Cost) Control the initial startup costs are limited in transitioning to the PPO program. We can work directly with each employee on direct costs, monthly premium fees and help them set up HRAs, Health Reimbursement Accounts. With the PPO program, they offer a wide variety of health informational programs that allow us to train as a group or as individuals to better take care of themselves through education and practices that can be provided by their physician. With wellness programs seeking to improve the overall health of our employees and their families, we can improve productivity, decrease sick time, and improve their overall long- term health. Cost savings would begin immediately in converting to the PPO program. This would be seen through the overall cost reduction in premiums paid by Seamus company through a negotiated pay provider. The employee would also pay part of the premium giving the company even more savings. This would allow us to use those needed funds elsewhere. While enjoying the tax-related benefits of the premiums being paid directly by Seamus company into the plan. Aligning our Needs A1c. The need to reduce overall medical costs and meeting the needs of our employees can be met. By transferring our current costly and time-consuming medical insurance program to a PPO we are streamlining our cumbersome program to a more cost-effective and progressive program. It reduces the direct amount that the Seamus Company pays for its current services and allows us to pay into one direct program. Thereby saving the company time and money. It allows us to use the available tax-exempt services by using a single-payer system. We also help our employees by providing better medical services, better health education, and controlling the expanding out-of-pocket costs for them. We can offer to set up tax-free HRA’s to help them mitigate their out-of-pocket costs. Benefits of Risk Management A2a. By transferring to the PPO, we are putting ourselves at an advantage of using negotiated rates. It transfers the management of the program to the insurance provider. They can provide better services to our employees through the mitigation of negotiated rates. We go from paying a fee for services that varies widely and is time-consuming to a managed cost service. We transfer the risk from Seamus Company to a management plan. Costs are controlled and better services are provided, and they manage unnecessary medical procedures saving out-of- pocket costs and increasing premiums.