Managed Care Course


ManagedCare Course


Providing a health insurance plan for employees is a legalrequirement for employers (Morrisey, 2014). The time and effortexpended by workers in an organization are mostly rewarded usingwages and salaries. Nevertheless, other allowances and benefits arealso included in the packages owing to staff members.

An employer could face various consequences for failing to offerappropriate health insurance plans for their workers. Firstly, manycompanies are motivated to provide health insurance coverage to theirworkforce due to the tax incentives (Morrisey, 2014). In this regard,the monthly payments submitted in providing cover are customarilydeducted from the company’s gross revenues. Therefore, a reductionin the taxable income lessens the employer’s obligations. Also, theemployer’s liabilities for social security and Medicare are reducedsince the insurance payments are factored into payroll tax(Finkelstein, 2014). Consequently, an employer that fails to providethe preferred insurance plan has increased tax obligations.

Furthermore, health insurance plans are offered in recognition of thevalue of workers to a firm. For example, employers realize that staffmembers become less productive when in poor health (Morrisey, 2014).Therefore, it is in their best interests to provide viable insuranceplans as required by their workers. Employers that fail to achievesuch a standard grapple with high turnover and missed deadlines.Regular periods of absenteeism may also be a factor if members of theworkforce are forced to search for alternative forms of insurance. Insome instances, highly-skilled workers may demand larger healthbenefits than those with lesser pedigree (Finkelstein, 2014).Consequently, an employer that fails to offer desired insurance coverloses the ability to attract and retain reliable workers.

Employees that have families ordinarily search for long-term jobsthat satisfy their pertinent needs. On the other hand, young andunstable workers may prioritize other factors apart from security(Morrisey, 2014). If an employee failed to offer standard healthinsurance for all employees, this could result in reducedproductivity and morale. It could also lead to glaring differences inthe duration and quality of insurance cover (Finkelstein, 2014).Therefore, employers would struggle to emphasize the importance ofteamwork and cooperation among a divided workforce.

In many instances, legal guidelines stipulate the requirement tooffer appropriate health insurance plans. Labor unions and otherbodies may demand particular forms of health insurance cover fortheir members (Morrisey, 2014). Subsequently, employers would becompelled to accede to the established practices in the healthindustry. Additionally, those that fail to offer a suitable insuranceplan are sued in criminal courts and shamed in public. The resultantreputational damage weakens the company’s brand. Punitive damagesin terms of fines also deplete the profit levels (Finkelstein, 2014).Employers may also incur additional costs when they are forced to payfor auxiliary health insurance plans.

Besides, some corporate sponsors rely on the levels of jobsatisfaction to make grants to other firms. Workers that haveadequate health plans usually have higher levels of contentment(Morrisey, 2014). They may also work more efficiently in attainingthe organizational targets and objectives. On the other hand,employees who lack decent insurance coverage are mostly dishearteneddue to lack of motivation (Finkelstein, 2014). Consequently,employers who neglect the health needs of their labor force sufferthe ignominy of reduced goodwill and sponsorships. Some clients mayalso choose to have dealings with a particular company since itsworkers portray a sense of satisfaction.

In addition, employees show a willingness to cater for some of thecosts associated with insurance cover. Employers are usually pleasedwhen thy share costs related to health insurance plans (Morrisey,2014). Nevertheless, an employer that decides to finance undesiredhealth plans is typically burdened with remitting the entire payment(Finkelstein, 2014). Consequently, the worker has no share in fundingthe regular payments.

Granted, many workers demand insurance cover through their employersfor various reasons. For example, a private individual cover isassociated with steep costs (Morrisey, 2014). There are also barriersthat limit access to individual coverage. Employment-based insuranceresults in other advantages to employers. For example, businesses canpool their resources and hence reduce administrative expenses andadverse selection (Finkelstein, 2014). Large companies experience themost cost advantages. Consequently, employers that offer unwantedinsurance plans become susceptible to adverse selection and incurhigher administrative expenses.

In many instances, the workers in an organization are customarilyhealthy and relatively young. Therefore, employers offer insurancecover that is relatively inexpensive in comparison to olderpopulations burdened with chronic ailments and grave disabilities.Advanced programs such as Medicaid and Medicare ordinarily assume theinsurance costs of such high-risk population groups (Morrisey, 2014).The value of insurance cover accruing to the patient exceeds theexpenses incurred by the employer. Consequently, employers that failto provide desired health insurance programs miss out on the reducedcosts of employee-based cover.

Indeed, employers are obligated to provide health insurance for theirstaff members. As discussed, legal requirements expose non-compliantemployers to prosecution and punitive damages. An employer also riskslosing the ability to attract and retain highly-skilled workers.Moreover, the productivity of employees may be compromised due toregular bouts of illness. Besides, the employment-based cover ishonored with special tax privileges. Consequently, employers thatfail to provide desired insurance plans risk losing credibility andprofitability.


Finkelstein, A. (2014). Moral hazard in health insurance. NewYork, NY: Columbia University Press.

Morrisey, M. A. (2014). Health insurance (2nd ed.).Chicago, Ill.: Health Administration Press.