2023 Tax Calendar
VIEWpoint Issue 2 | 2022
Inflation Reduction Act: Highlights of Key Changes for You and Yo...
Successfully navigating the sea of change brought about by health care reform will require corporate finance and human resource (HR) departments to achieve a new level of cooperation to promote both employee health and company financial health, according to an insurance industry expert at a client conference recently hosted by Doeren Mayhew, a top accounting firm in Houston.
Michael Turpin, executive vice president of USI Insurance Services, shared his views on the impact of health care reform on the corporate bottom line, explaining that benefit philosophies will become increasingly influenced by financial performance.
“HR and finance will have to come to a skillful détente on what they are willing to do,” Turpin said. “HR must be a friend and a fiduciary.”
Many companies will see growing tension between HR and finance as the desire to minimize disruption and maintain employee engagement clashes with the financial realities of operating a profitable business in a low-growth economy, Turpin said. This will leave organizations with four basic options:
Costs tend to be higher for companies that are not self-insured, Turpin said. Experts predict self-insured companies will save about 10 percent in costs in 2014 over their fully-insured counterparts.
Companies wanting to see their benefits costs remain equal to or lower than their rate of revenue growth must have a plan that includes tactics such as:
Noting that health care benefits represent a bilateral contract between employees and the employer, Turpin said strong HR fiduciaries can help manage health care costs without increasing contributions or cutting benefits by identifying and engaging employees at risk for developing diabetes, cancer or other serious diseases to adopt healthier behaviors. Employers also should encourage employees to become health care consumers by comparing costs of various health care services and avoid emergency room visits for minor issues.
Turpin suggested HR and finance work together to answer key questions such as:
In the end, managing balance between employee benefits and revenues comes down to one important question: “What is more disruptive?” Turpin asked. “Engaging employees or firing them?”
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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