Karen Swift is president of an accounting firm that has 10 employees. The only employee benefit provided by the firm is a paid two-week vacation for employees with one or more years of service. The firm's profits have substantially increased, and Karen would like to provide some additional benefits to the employees. Karen needs advice concerning the types of benefits to provide. Assume you are an employee benefits consultant. Based on the following considerations, answer the following questions:
a. Karen would like to provide health insurance benefits to the employees. Describe briefly the major types of managed care plans that she might consider.
b. Assume that Karen is considering both a preferred provider organization (PPO) and a health maintenance organization plan (HMO). Explain the major differences between these two plans to Karen.
c. Are there any other group health insurance benefits that Karen might consider? Explain your answer.
d. Karen is concerned that rising health-care costs may result in an increased financial burden to the firm. Describe a group health-care plan that Karen might consider to deal with the problem of rising health-care costs.