Imagine being a leader in a small-to-mid company - Assignment Example

Sur Supervisor Memo Chief Executive All Staff Members Sharing High Health Insurance Cost For the last couple of years employer health insurance cost has increased significantly. The Kaiser Family Foundation has estimated that between 2007 and 2013, the cost of insurance has gone up by over 60% in real value. The Obama Health care Act is aimed at providing healthcare to all citizens of this nation – including those who belong to economically deprived class in the society. Increased insurance cost, due to this new healthcare act, has some definite ramifications on the health of your organization and I need to share with you.

Health insurance cost is not equal for all but largely depends upon lifestyle-related habits such as excessive liquor consumption, eating habits leading to obesity, smoking because such people needs additional healthcare giving rise to insurance costs. This raises the burden of employer because they need to pay at least half of the insurance cost for each employee as a contractual obligation while offering job to a prospective employee. It becomes imperative that some policy framework, in the matter related to insurance cost, needs to be prepared and implemented that distinguish employees based on their lifestyles.

In a free-market economy, costs need to be shared judiciously - in line with the benefits derived by employees. Market can always adjust, while providing full healthcare benefits to workers, by providing lower wages to them so that the total cost to employer remains unchanged but that cannot be done due to minimum wage act in operation. Another alternative is to reduce the number of workers so as to keep the total wage bill constant. When wage rate is allowed to settle on its own without any external interference such as minimum wage act, these issues do not crop up.

Quite often, economists have given their expert opinion that the minimum wage act creates market distortion in employment generation process harming weaker section of the society. Survival of the organization largely depends upon how fairly everyone is treated based on their contribution to the organization and the costs incurred on them. Usually, most employers do engage themselves in cost-benefit analysis while providing employment to any employee. The commercial wisdom entails that burden of health insurance cost must be shared appropriately – in proportion to the benefits garnered because lifestyle approach of each employee greatly differs.

It will not be out of place to mention that giants such as IBM provides rebates to workers on insurance costs who follow healthy lifestyles and penalizes those in the form of higher insurance costs who do not follow healthy lifestyles. This policy has a basis of fair dealing for all. For the sake of equity, your organization now believes that time has come to implement similar health insurance policy not only for our staff but also in the benefit of all stake holders. Accordingly, 10 percent higher premium will be charged to those workers who tend to engage in lifestyle-based costly behaviors.

Everyone needs to make a note of this change regarding healthcare insurance policy that is made effective from today. Thanks for your understanding. If you have any questions, kindly feel free to contact me. Sincerely,Work-CitedKaiser Health News. How Employer-Sponsored Health Insurance is Changing. Web. 12 June 2014.