Human Resources Case Study 77
Case Study 77
For many companies, health insurance can become a challenge especially for those companies who make small profits trying to exist in today’s economy. That is the case for Quality Auto Parts, a company who has seen its profits from the late 80’s increase and decrease at different variables until today. During the recent recession the decline in auto sales put a damper on the auto parts dealers as well. This did not make things better when the doubling of health insurance benefits continues to rise over the years. Quality Auto Parts put together a health committee to try and figure out a way to help cut there spending on employee health benefits while still being able to appeal to the employee. A very tough task especially when noting that the health insurance costs increased from $4,680 per year in 2000 to $9,869 in 2010. It becomes very alarming considering the companies profits have continued to shrink during the recent recession. This puts a huge burden on everyone in the company because drastic measures now have to be taken in order to keep Quality Auto Parts in business. The health committee came up with four options for Quality Auto Parts to take in hopes of keeping the business flourishing towards the future. It is obvious that the CEO of QAP does not want to stay with the current traditional indemnity policy because it is too costly. That now leaves the committee three options. The second option is to offer an HMO option in addition to the current plan. If going forth with this option, it still carries the burden of those high insurance costs with only an option of an HMO. The majority of Employees, especially in a large company, do not like change and might not take the effort to look into the HMO option. The last two options, in which both President and CEO John Decarlo and Vice President for Finance David Schramm agree on separately, in which the committee has came up with are two that I would offer congruent with one another. If
For many companies, health insurance can become a challenge especially for those companies who make small profits trying to exist in today’s economy. That is the case for Quality Auto Parts, a company who has seen its profits from the late 80’s increase and decrease at different variables until today. During the recent recession the decline in auto sales put a damper on the auto parts dealers as well. This did not make things better when the doubling of health insurance benefits continues to rise over the years. Quality Auto Parts put together a health committee to try and figure out a way to help cut there spending on employee health benefits while still being able to appeal to the employee. A very tough task especially when noting that the health insurance costs increased from $4,680 per year in 2000 to $9,869 in 2010. It becomes very alarming considering the companies profits have continued to shrink during the recent recession. This puts a huge burden on everyone in the company because drastic measures now have to be taken in order to keep Quality Auto Parts in business. The health committee came up with four options for Quality Auto Parts to take in hopes of keeping the business flourishing towards the future. It is obvious that the CEO of QAP does not want to stay with the current traditional indemnity policy because it is too costly. That now leaves the committee three options. The second option is to offer an HMO option in addition to the current plan. If going forth with this option, it still carries the burden of those high insurance costs with only an option of an HMO. The majority of Employees, especially in a large company, do not like change and might not take the effort to look into the HMO option. The last two options, in which both President and CEO John Decarlo and Vice President for Finance David Schramm agree on separately, in which the committee has came up with are two that I would offer congruent with one another. If