Please write peer review/ comment on the below paragraph 4-5 sentence.

Medical/Healthcare Coverage:

In the case:

The 3,800 production and maintenance workers of Auto Products Corporation, who are represented by the Local 5000, United Metal Workers of America, are all covered by the same first dollar medical coverage with no employee contributions and no deductibles. Health care coverage includes physician visits, hospital services and emergency room treatment. These plans, while not restricting employees to certain doctors or hospitals, require claim forms, waiting for reimbursement checks, and for the employee to fulfill a certain annual deductible. This current fee-for-service health plan, however, does not cover employees who have been laid off for more than thirty days. At present, 450 Auto Products Corporation employees are on layoff, eighty of whom have been on layoff for over thirty days. The current employer cost of the health plan is $6,899 per employee. The union has indicated it will not allow any changes to be made to the healthcare coverage plan. However, with 11% of their coworkers on layoff and 17% of those with no healthcare coverage at all right now, perhaps this would be a good time to discuss how to lower healthcare coverage costs for the employer, improve the coverage for working employees and extend the benefits for the laid-off employees who are out of work past the current thirty-day limit.

Textbook:

Currently, almost all labor contracts require employees to help the employer with healthcare cost containment measures. Even as far back as 1998, 73% of workers contributed some part of the employer healthcare plan costs. For employers, the costs of this premium coverage is not only very expensive, but it is not always money well spent. People who go to the doctor for every sniffle or who dont get a second opinion to discern the necessity or more advantageous price on a surgical procedure drive coverage costs higher. Then the healthiest employees who never use the coverage because they do not need or want to go to the doctor have premium coverage that goes unused. Neither of these are good values for the employer, and funds recouped from a less costly insurance plan can be used for wage increases and other benefits. As alternatives, there are HMO (health maintenance organization) and PPO (preferred provider organization) options, as well as the newer HDHP (high-deductible health plan) that can be combined with either an HMO or PPO as well.

Web:

The HMO limits the patient to a specific group of healthcare providers, and offers preventive care at affordable out-of-pocket amounts. Employees with large families or those who hate filing for reimbursements would benefit most from this type of plan. The PPO is similar to the HMO, but with more choices for healthcare providers within preferred networks, but the employee can also pay the difference to see any healthcare provider they choose. They also dont have to get referrals from their primary care doctors to see a specialist.

A HDHP is a new way to look at coverage, especially when combined with an HSA, (health savings account) which allows covered employees greater flexibility and discretion in deciding when and how to use their health care dollars. The employer and employee can contribute pre-tax dollars to the HSA, and then the covered employee can use those funds to pay medical expenses, tax-free. If the employee does not spend the HSA funds, they are not use-or-lose. HSA funds can roll year over year for the life of the employee. They are portable, and go where the employee goes. Therefore, the employee does not forfeit the funds once they are in the HSA. The employee can continue growing the balance of the HSA over time and if the funds are unused by the eligible retirement age, the employee may use the HSA funds as an additional retirement account, for medical or non-medical expenses.

In two different moves to a new kind of healthcare coverage plan, union-management teams have contracted with HMOs, PPOs and/or an independent preauthorization group for certain medical procedures, with the result of cutting 10% off their multi-billion or multi-million dollar healthcare costs. If the first years HSA deductible could be contributed by Auto Products Corporation, perhaps the idea of changing to a HDHP could be an appealing prospect. High-deductible health care plans focus their merits on the two groups who would be best served: employees who go to the doctor all the time, and those who rarely or never go. Once the employee has met the annual deductible and stays in the network, the plan becomes traditional until the out-of-pocket max has been reached, then there are no more out-of-pocket costs for the year. The HSA can also be a savings vehicle for retirement, as shown in the examples below. The HSA, even when 50% is used each year, can grow into quite an additional nest egg. The HSA, side-by-side with the 401(k) or other tax-deferred plan, has advantages even above these tax-deferred account types.

Healthcare coverage and costs are a huge concern for all involved. I would like to propose moving to a high-deductible health plan. An HDHP, combined with a PPO or HMO, would be accompanied by an HSA for each employee with the first years deductible as the employers contribution to fund the account. The healthcare coverage would also be changed to extend from 30 consecutive days while on layoff to 60 consecutive days.