Health insurance is designed to protect patients from the risk of expensive medical services. The cost of insurance, however, is steadily rising. When costs are too high, healthier individuals tend to not purchase insurance coverage, resulting in a lower percentage of healthy individuals to pool with those who have health issues. This poses a challenge for employers and the government, as they are tasked with designing viable policies that balance cost and generosity of benefits. For this Discussion, examine the following scenario and consider the type of insurance policy the employer should design and provide for employees.
Scenario: You are the employee benefits manager for a mid-sized construction company with 50 employees. You are responsible for working with insurance companies to design a health insurance policy to meet your company's needs. An analysis of the health risks of your company's employees indicated that there are two populations of typical individuals: 20- to 30-year-old workers with no known health issues and 40- to 50-year-old workers with chronic diabetes. Assume that 40% of the employees fall into the second category of workers with chronic diabetes.
To prepare for this Discussion:
Analyze the provided scenario. What is the obligation of the employer and the government in insuring these two populations of individuals? How do moral hazard and adverse selection impact these insurance provisions?
Consider the type of insurance policy the employer should design and provide for its employees. Be sure to consider type and generosity of coverage, premiums, deductibles, and cost-sharing
Obligation of the Employer and the Government
It is obligation of the employer and the government in insuring both healthy individuals and sick populations with chronic diabetes to provide the best health insurance provisions on losses from disease and medical expenses. In addition, the Affordable Care Act makes it obligation for the employer to provide health benefits to its workers. If the affordable coverage is not provided the employees, then the employer can face penalties (Pilzer and Lindquist, 2014). At the same time, it is also requisite for the employer to provide the employer shared responsibility provision to 50 or more full-time equivalent employees. Apart from this, it is also crucial for the employer to include some insurance provisions including sickness benefit and paid leave provisions for 40- to 50-year-old workers with chronic diabetes. On the other hand, it is obligatory for the ...
Health insurance is designed to protect patients from the risk of expensive medical services.This response analyses the obligation of the employer and the government in insuring employees in the context of given scenarios. Moral hazard, adverse selection impact, and type of insurance policy are also discussed.