Concordia Saint Paul
One of the biggest financial issues facing Human Resources (HR) presently, is the increasing cost of employee benefits, specifically health care benefits. Offering competitive benefits to a workforce of any size comes at a high cost to employers. With job markets improving in recent years, job seekers now have the ability to be somewhat selective and benefits are often a deciding factor when chosing to accept a particulat position. The ability for organizations to offer such competitive benefit packages to team members has become progressively difficult with recent health care cost and benefit changes. The cost of health insurance consistently rising directly relates to the types of benefit packages offered. According to the article “Benefits Costs” in the 2011 Controllers Report, rising costs of health care coverage can be combated by changing vendors or health plan design. Overal the cost of offering health care benefits to employees and possible dependants has deep financial implications and will continue to be a pain point for HR. In the text, “Human Resource Management” by Mathis and Jackson (2011), benefits can be described as indirect rewards granted to an employee as a part of the organization. The text explains that inflation and changes in workers compensation have additionally escalated benefits costs.
Policies and Practices
In the text “Human Resource Management” by Mathis and Jackson (2011), a survey is referenced indicated that employees consider health plans to be the most significant benefit offered by employers. Over the last several decades, the price of health care coverage has drastically increased. With the heightened cost of covereage, employers are facing tough financial decisions. Changing copayments or employee contributions are some of the ways that Mathis and Jackson (2011) explain employers are trying to cope with increasings costs. Along with the rising cost of benefit coverage, recent changes in regulation have led to changes in the way employers directly offer health care benefits to their employees. Some employers who previously were not legally required to offer benefits to employees now are. With the introduction of this new policy, an increase of cost to many employers is evident. Along with these policies, offering benefits has become a bigger financial issue for HR and organizations as a whole.
Laws Related to Benefits
The Affordable Care Act is a relatively new law, passed by congress that has brought about many changes to the way in which organizations extend benefits to employees. In the article, “Historic Health-Care Reform Package Becomes Law” (Clark 2010), details about the new law and how they will affect employers and individuals are outlined. As the article explains, the new legislation imposes mandates for Americans to have or obtain health insurance and many employers to provide it. Like consumers, employers also face many changes due to the Affordable Care Act. First, as the Individual Mandate now forces individuals not covered through their employer to have health insurance, the Employer Mandate forces companies with more than 50 employees to provide health care coverage for their workers, or pay a penalty tax (Clark 2010). In the past, employers were not legally required to extend medical insurance to their workforce, however many offered the benefit. Various organizations will be impacted differently by the Affordable Care Act, small businesses specifically that did not formerly offer the benefit due to cost may be impacted the most. If these businesses were unable to afford to extend the benefit previously, legally requiring them to do so may increase expenses, thus creating a financial issue.
Alerus Financial previously offered health care coverage to all employees at full time status (which accounts for most of the workforce), so this change in