Please answer the questions in bold. I will really appreciate the effort. FYI donot copy and paste any previous response on the web. am simply looking for new insights. Thanks

Consumer-Driven Health Care: Medtronics Health Insurance Options

In June, Dave Ness, vice president of Compensation and Benefits of Minneapolis-based Medtronic, was wrestling with the decision about the health care insurance choices he should offer employees next year. He had launched Definity Health, a new program, two years ago, on an experimental basis. Definity Health, also Minnesota-based, was founded to offer a new kind of consumer-driven health plan. Unlike many other health insurance plans, it was consistent with Medtronics human resource and business strategy of encouraging consumer-driven health care.

Definity Healths plan consisted of three elements.

A Personal Care Account, sometimes described as a health reimbursement account (HRA). Employers contributed to the account and employees used the money to pay for health care expenses from their chosen provider. Funds remaining in the HRA at the end of the year were rolled over to the next year. Preventive care was 100% paid for by the plan and was not charged against the employees HRA balance.

Comprehensive Health Coverage. The plan had three levels of deductibles from which employees could choose, ranging from $1,500 (low) to $3,500 (high) for a single employee, and $3,000 and $7,000 for family coverage.

Health Tools and Resources. A broad array of resources to support member health and wellness decision-making available online and by phone. Members could research providers across many criteria, review pricing for medical services or conditions, talk with nursing professionals or a pharmacist 24/7, delve into medical information, and track their Personal Care Account and Comprehensive Health Coverage activity.

The plan paid for all preventive care to encourage participants to receive periodic physical exams, immunizations and other services designed to maintain health and to ensure early detection and treatment as necessary. Because the plan had no gatekeepers and allowed much broader types of expenditures under its health account and preventive care policy, it permitted employees to make more decisions about their health care.

To date, Nesss objective of being cost-neutral appeared to be realized. Medtronic self-insures the majority of its health care plans and contributes from 75% to 80% of the cost of coverage, depending upon the plan. Although costs were not the primary reason to offer the Definity Plan, they were an important aspect and it was expected that over the long term, health care costs under this plan would be lower than traditional plan offerings.

In the first year, approximately 10,500 employees were offered the Definity Health option and 13% signed up. Although Ness anticipated that Definity would appeal to younger employees who were less concerned about their health insurance, enrollment statistics were almost identical to Medtronics other more established plans when comparing coverage levels, pay rates and job types. The enrollment data did, however, indicate a higher than expected percentage of males enrolled during the first year. During the second year, the distribution between males and females was as expected, approaching 50% each.

Ness was quite pleased with initial enrollment because it showed that a significant number of employees were interested in participating in an entirely different type of health care plan. He was among the 1,300 employees who chose the Definity option and like the others, was well satisfied. Last years enrollment was 4,040 participants,

The time had come to decide. What, if any, changes should be made in the Definity plan for next year? Ness also wondered what additional metrics he should use to measure the plans success or failure. He thought back to some of the first meetings about consumer-driven health plans and how far they had come since then. He also wanted to revisit the decision not to include BHCAG among Medtronics offerings. (See Exhibit 1 for more about Medtronics health insurance plans.)

Medical Plan and Level of Coverage	Full-Time or Part-Time 32 Hours or More/Week Employee Cost. Monthly Cost	Part-Time Scheduled under 32 Hours/Week Employee Cost. Monthly Cost
HealthPartners	-	-
Employee only	$ 49.00	$153.13
Employee plus one	$99	$310
Employee plus two or more	$146	$458.25
Medica	-	-
Employee only	$78.25	$195.63
Employee plus one	$156.75	$391.88
Employee plus two or more	$242.75	$606.88
Definity Health	-	-
Employee only	$1,000	PCA
Low Deductible $1,500	$44	$165.63
Medium Deductible $2,500	$28	$151.88
High Deductible $3,500	$11.14	$143.13
Employee plus one	$1,500	PCA
Low Deductible $2,250	$83.40	$347.50
Medium Deductible $3,750	$51.10	$319.38
High Deductible $5,250	$25.05	$300.63
Employee plus two or more	$2,000	PCA
Low Deductible $3,000	$115.20	$480.00
Medium Deductible $5,000	$70.60	$441.25
High Deductible $7,000	$ 33.20	$415.00

My analyses of the case. use it to answer the questions. Thanks

After havent carefully and thoroughly read the case study, I can honestly say that from my understanding of the case, Medtronics has been generous to its employees, and they have managed to show that by the type of healthcare plans that they offer. Unlike other organizations, Medtronics offers numerous plans that employees can chose from based on their individual needs and budgets. As far as misalignments go, I believe that the company has been well aligned with industry standards. In 2000, according to a study by the Kaiser Foundation, only 27% of U.S. employees worked at companies that contributed the same amount to all the plans they offered (Herzlinger, 2002). Medtronic being that have taken on the cost on most of their plans, rather than passing it to their employees, brings me to agreeing to the fact that they are in fact in alignment.

Although the Medtronics does keep their employees in mind, it goes to show the company cares about them and their wellbeing. However, the company fails to have wellness programs in place that employees can go to in case they felt stressed with their work. companies like Google, has a slide in case employees are tired of taking the stairs; the East Coast office houses ping-pong tables, nap pods and LEGO stations. Employees can shower, get their laundry done, get massages and even swim at work. And Motley Fool offers free spinning classes and boot camps to in-house subsidized massages, the health and fitness perks are off the charts (Rothfeld, 2015). Meanwhile, The Medtronics consumer driven healthcare plan currently only offers phone conferences instead of actual office visits that can much beneficiary to employees. The CDHP offers preventative services like regular checkups, offices visits, and so forth at affordable rates which am sure their employees appreciate.

Mr. Ness who oversees benefits and compensation at Medtronics, seems to have worked hard on the new consumer driven health plan, but was also under the impression that it would only attract the younger employees since their health wasnt of great concern to them. Ness didnt really talk or worry about other health plans offered at the company, because he wanted to ensure that the new CDHP was well developed (Hurzlinger, Hurwich, & Bokser, 2014). The strong aspects of the CDHP is its affordability which makes it easy for employees to be able to afford certain doctor services based on their needs.

Among the 10,500 employees who were offered the Definity(CDHP) plan in the very first year that the plan was introduced, just happened to turn out that the 13% of the employees who signed up for the plan were mostly male, and younger employees at that which was Mr. Nesss worry. Things however, quickly changed the next year with more than 1,300 employees now signed up for the Definity(CDHP) health care plan. Among the 1, 300 employees, Mr. Ness was one of those who also signed up for the plan (Hurzlinger, Hurwich, & Bokser, 2014). Although the plan has its peaks and so forth however, one of its weaknesses remains to be its lack of a more proper wellness program.

The definity plan is the flagship plan offered by the company, which would have the low cost of treatment. The enrollment was 13% of the total 10500 employees who worked with the company, which spiked up in the second year. The Total coverage cost which ranges up to 75 to 80% of the total cost, should be taken to 85 to 90% even if there is a spike of 10% in the premium. if the company manages to provide 90% cost of coverage, the employees won't mind spike in the premium. The beneficiaries would look at the long-term benefit which they would enjoy by paying a fraction of more payment. If the company can manage it without any changes in the current payment system, it would be a win-win situation for both.

They are various rewards components in the Consumer-Driven Health Care: Medtronics Health Insurance case study that can either be reduced, or in my opinion be left the way it is. According to the 2013 annual health benefits survey by Towers Watson and the National Business Group on Health, released earlier this month, two-thirds of companies with 1,000 employees or more offered health insurance plans that included medical expense accounts (Andrews, 2013).

The Rewards package is appropriately planned for what employees are paying, these rewards offered by the plan are encouraging them to keep track of the preventive measure for their health, which is beneficial for the company in turn, hence I feel there should be no reduction of the benefits. If they wish to reduce, they could lower the gap of the difference in premium paid by the Full-time employee vs the part-time employees. Currently, the premium paid is threefold by the part-time, this could be reduced as there could be more enrollments in the plan.

With the use of the HSA account, a company incentive could be a match, say 200 to 400 dollars if employees open the account. More enrollment increasing ideas would be to have an enrollment fair where all the plans are fully explained and questions answered. Another idea would be to take a survey of what the employees are looking for in a health care plan. Options are great, but employee involvement is crucial in determining what options to offer. Picking alternatives that would engage employees, not just so the company can herd its employees to the best option. As the plan stands now, enrollment will likely continue to increase just by word of mouth and the favorable structure that employees already like.

The major difference between Definity health care plan and other is that definity offers deductible option to employees for instance, definity care plan does the following; Personal account to pay for health care expense from chosen provider and preventive care 100% paid by plan not chargeable to employee account, Huge number of resources to support decision making with online and phone support. The insurance offers reviews on pharmacy, medical services and personal account, over long term, the cost incurred will be lower due low premiums paid. Meanwhile with other plans, the following are the difference; No account for employee, traditional way of claiming back preventive health expense from bills provided, No digital or online support on pharmacy or medical service. This leads to incorrect decision making due to lack of correct information on time, and Over long term, the cost incurred will be higher due high premiums paid.

A. Make recommendations for accommodating potential financial, procedural, and legal constraints regarding the revised benefits and compensation package.

B. Make revisions to the current benefits and compensation package that address concerns related to your previous analysis of the quantitative and qualitative data. In other words, what changes would you make to the current benefits and compensation package in order to address the concerns you previously identified?