Health Care Bargaining PPACA

Health Care Bargaining and PPACA in GMFC
Introduction
Companies with a huge number of employees must comply with the federal regulations relating to the Patient Protection Affordable Care Act (PPACA). The PPACA is a massive program that purports to cover each and every aspect of health care and education in the United States (Sade, 2012). Effects of PPACA on the work industry, both to employers and employees, can bring rise to increased costs, frustrations, and costs that create a staggering situation like what GMFC Company is currently experiencing. Being a large multidivisional corporation with over 50,000 employees, it becomes very crucial for the GMFC Company to make critical decisions regarding health care coverage for its employees.
Should the company make the wrong choice, it is very likely to collapse.
In this paper, we shall present the matters engraving the continued health care coverage for workers at GMFC Company, as well as the union’s (Local 384) stand toward any transformation of the current level of health care coverage. To facilitate this discussion, a synopsis and an analysis of the new regulations covered by the PPACA will be reviewed by the study. We shall carefully discuss the health benefits at GMFC, the dilemma of the GMFC regarding the PPACA, the impact of the PPACA to GMFC, and the collective bargaining implication of PPACA to the GMFC Company.
Health Benefits at GMFC
Based on its size, the GMFC management decided to self-insure its employees with health care coverage by subcontracting Vesuvius Heath Care (VHC); one of the five largest health care insurance companies in the United States, to administer its health care program. The GMFC employs the to pay claims; act as a gatekeeper for whatever procedures covered by the health care plan, as well as a body to negotiate payments levels with the main health care providers. Before the federal enactment of the various PPACA reforms, the GMFC provided most basic medical services with a $2 million lifetime limit for each covered employee and a dependent coverage for students up through the age of 22 who have enrolled in a full-time degree program. In line with the new provisions of the PPACA, the GMFC is required to change its health care scheme to accommodate the new benefits and age limit requirements. These additional requirements mean that the company is liable to add some more costs to the existing plan.
The dilemma of the PPACA in the GMFC Company
Two alternatives face the GMFC Company, either to ensure that its employee’s health care package comprises of the critical health benefits as obliged by PPACA, or to drop them and face the federal penalties for non-compliance.
The option of the business endorsing the plan as stipulated in the PPACA is not welcoming to it since it poses a threat of increased costs due to the increase of the health care cost of inflation. More so, Local 834 checks on the GMFC Company not to neglect the plan because it might be vulnerable to the skyrocketing tax. Should GMFC decides to drop the health care coverage and pay the lawful penalties instead, its employees will be forced to purchase insurance from virtual exchanges companies, and as a result, the union would demand large salary increment to offset the reduction in the contributions from the company. Apparently, it is clear that the company is in a serious dilemma since the available alternatives touch serious labour relations problems that are associated with the rapid, unexpected
change.
The impact of PPACA on the GMFC Company
Considering that the GMFC Company does not endorse the PPACA plan, it will be charged a penalty under the prescription of the ‘Cadillac’ tax.
Cadillac tax is a forty percent tax on firms that provide high-cost health benefits to the employees (Kapp, n.d.). Therefore, the company needs to devote a significant time to manage and maintain compliance with the law. Another direct implication to the GMFC Company is that it will have to dedicate more human resources and even require complex IT infrastructures to facilitate a smooth running of the new system plan. This process, therefore, means an increase in the cost to the company. On the other hand, by GMFC endorsing the PPACA, it will have a wider impact on the nation. For instance, there will be a creation of additional workload to the department of insurance in the health care sector as a result of increased health care requirements. Since PPACA imposes various taxes and penalties, GMFC will be adversely affected should it not comply fully with the plan.
GMFC requirements by PPACA
Under PPACA, employers are not directly mandated to offer health coverage to their workers. However, this measure contains a powerful incentive for many employers to do so. Large employers such as GMFC face a financial penalty if any of their full-time employees obtain a premium credit through an exchange. Large companies are required to automatically enroll their workers in the company’s health scheme, although, the employees are at liberty to opt out
of the employer’s coverage (Sade, 2012).
Collective bargaining implication of APPACA
According to Fisher,(n.d), Companies entering into negotiations currently are much better positioned to bargain with full knowledge of how to respond to health care changes as well as the cost impact of those changes. Unluckily, for most companies, the choices required by the PPACA are difficult to make. In many instances, it all together becomes too difficult to make bargains successfully. The skyrocketing health care costs and economic crisis in the recent years have made companies to face an unpleasant prospect of handling the spiraling labour costs at the negotiating table. Health care reforms are highly supported by many as a step toward countering the rising health care costs. Therefore, the changes required by employers to deal with the PPACA command and penalties will almost certainly face a tough resistance at the bargaining table by unions that are already tired of hard bargaining by employers.
In this light, employers will more likely drop health care coverage for their employees and eliminate all non-conforming benefits attributable to workers. Further, the employers may change or modify plans to decrease health care plan costs and alter the employees’ contribution due to affordability. Consequently, Firms will be advocating the Taft-Hartley health and welfare plans. However, employers considering a Taft-Hartley plan should be cautious of the on the so-called ‘Cadillac plans,’ an exercise tax that will be legally enforceable in 2018 according to PPACA, and whose total costs exceeds certain thresholds. It is often extremely hard to negotiate a way out of the participation in such kind of schemes, and hence any company that employs it risks attracting a penalty soon (Fisher, n.d).

Conclusion
From the discussion above, we can conclude that it is imperative for the GMFC to recognize that health care coverage is very paramount. Besides negotiated wages, there are other pay forms, such as the provision of insurance, a company should provide to its workers. However, due to the increased health care cost per a member of staff, as provided by the PPACA plan, it becomes imperative for the Company to avoid engaging in acts like reducing benefits of its employees, subcontracting for the health care service, as well as retrenching part-time workers. The study, therefore, concludes by emphasizing that for a company to continue; health care containment of its employees is very vital. In as much as transformation is good in a changing time, the GMFC should fully embrace the PPACA program. Adopting the program will make GMFC to attract future talents as well as retaining high-current quality employees. High employee retention and attraction of super talents will enable GMFC to maintain high-efficiency levels and hence remain more relevant and thrive in its operations.