Management Essay: Managing the Rising Costs of Medical Benefits

Student Name
Instructor/Professor
Course Title
Date of Submission
Managing the Rising Costs of Medical Benefits
HR professionals now face a close call in implementing the guidelines in employment and benefits laws given the ever-rising costs of healthcare benefits (often exceeding average inflation costs in the economy) and other bonus packages. Given the directives of healthcare benefits outlined in the Affordable Care Act (ACA), managers need to develop strategies to reduce healthcare benefits costs.
HR Challenges
One of the key challenges is that of out-of-the-pocket expenses that employees have to meet when the employer already provides an insurance benefits package. It results in low employee satisfaction as they raise regular complaints. It beats the core benefit of providing medical benefits when the cost is high, but the service ascribed remains unavailable, hence a clear loose-loose scenario. Secondly, in defined benefit plans where the employer meets the medical costs in entirety, there is a tendency to be less conservative in spending on health. The end consumer, the employees, are likely to be spendthrift and pay less regard to the cost of healthcare interventions, drugs, and medical procedures when they are aware that the costs will be met by someone else. As such, the medical bills may be too high unnecessarily hence leading to escalating costs of the healthcare benefit plans. Third, while HR managers are tasked with the responsibility of negotiating medical benefit plans with insurers and healthcare providers, they face a tough task in managing how the plan is executed and liaising with hospitals to follow up complaints to the extent that it may jeopardize their daily tasks in the company. Often, this lack of expertise in handling healthcare costs and associated planning leads to providing sub-par services. Lastly, given the current legislation, hospitals are mandatorily ob...