Article Review: Effects of Mandated Benefits

Effects of Mandated Benefits

Name

Columbia Southern University

Introduction

The article, Mandated Benefits, Good or Bad, by Margo D. Beller, was about mandatory health care benefits and how they affect the business communities (Beller, 2014). The state of New York is one of the most mandated health insurance states in the country, and the costs will continue to increase every year. (Beller, 2014). The problem with all the mandates, is that it is not level across the playing field for both large businesses and small businesses. In order for a company to remain competitive and attract employees who are looking for good benefits and a higher pay, companies have to constantly pay these rising prices in the health care coverage. Some of the smaller businesses are fighting on whether or not to even have a medical insurance policy in the first place. Costs of the health policies are increasing all the time, making it impossible for the lower class who needs the medical attention to pay for the care they need. With the increase in the premiums and the costs of the mandates in the health care coverages offered or mandated by the health insurance departments, there has been a rise in the percentage of the uninsured. (Beller, 2014). Larger companies as well as private companies can be exempt from these mandates due to the provisions of ERISA, and therefore do not have to worry about the changes in the amounts because they are protected and ERISA is a standard that sets one set amount of health insurance for employee and dependents. This really only effects the middle to lower class citizens, and a big overhaul of the health insurance needs to be looked at and corrected.

Mandatory Indirect Benefits

According to the article, some of the mandatory indirect benefits that are being mandated by the state of New York are outpatient treatment for alcoholism and substance abuse, mammography screenings, home health care and maternity care coverage. (Beller, 2014). With the increase of mandates in the health care, issues will arise. “The cost for the mandate will continue to increase every year, adding to the financial burden on employers and employees.” (Beller, 2014). Now, this will not only increase just because of the services that are provided for the employees, and they will have to pay for these adjusted benefits, but because some of the benefits being added may be something that is needed by that employee. For example, you may have a drug problem and when you add a benefit for drug addiction and care, and use it within the company, now more people want to utilize this, and there will be more of a demand and due to a higher demand, there will need to be a cost adjustment within the health system, which in turn raises the cost of the benefit package for the employees.

Factors to Consider

Offering benefits as a business owner to a potential employee in the state of New York would be extremely tricky. There would be a number of factors to consider when determining what to offer and how to offer my compensation package. One thing that would make a difference would be if I was a small, large, or a private business. All three are affected by the mandated state health care system, either positive and negative. As a small business owner who cannot afford to provide coverage on my own due to the mandates, I would research other companies in the state and join forces. There is a program called, small business health options programs or SHOP exchanges. These programs include new state-based health insurance purchasing pools or CO-OPs (in about one-half of the states) where small businesses are able to pool together to buy insurance. (National Conference of State Legislatures, 2018). This would be a way for me to still offer the health insurance and remain competitive. The article states how many of the smaller businesses are deciding, if the state continues to drive up costs, is to provide “no coverage at all.” (Beller, 2014). Larger companies and private companies do not use group health agencies and therefore are unaffected by the state mandates. As a potential employee looking for a job, I would look at the healthcare benefits closely. New York is a high cost area, so the compensation package has to be just right. If I am going into a company who is not offering insurance for me and my family, then I will have to pay out of pocket, and will not be living comfortably, and could possibly not afford to live where I am for too long. So, naturally, I would be going with the larger company, who offers the better pay with included benefits for myself and family. Even if it does cost a little, the overall saving yearly would be better that paying for a private company myself outside of the company’s policy.

How Mandatory Indirect Benefits Affect You

Mandatory indirect benefits can be both good and bad, depending on the area of employment and what the career is. Maybe even where you come from can be a considerable factor for some people. Being told what benefits you are to pay for from an employer and what you are going to pay can feel as if you have no control of your financial assets, or you have no voice in the decisions of you and your family’s coverages. Now, what if those decisions that were made for you were the best and they were of very little cost? Would your opinion be the same then? This article was about medical mandates in the State of New York, so I will keep the comparison to the medical aspect of indirect benefits to that category. In the Army, we have a health system called TRICARE. This is automatically given to every Soldier once they enlist in the Army and you must pay for the coverage. You pay depending on of you are paying for yourself, or if you are paying for you and any dependents you have. There is no way around this. Now, in a way, the bad thing is we don’t have a choice in the sense of what gets covered or who covers us. But, we do get full coverage for low cost, so there really isn’t much to complain about. But there are some companies out there that force their employees to pay for plans that offer benefits they will never use. That to me is crazy. Companies should only make employees pay for the benefits they will use, and determine those benefits on a yearly basis during evaluation times. Overall, I don’t necessarily agree with mandated benefits because, like New York, they can hurt people and business more than they help. But, I’m not against it either because they can be beneficial depending on what benefits are mandated and what the costs are to the company and to its employees.

Conclusion

This article by Margo D. Beller really puts into spotlight the rising issues with mandated healthcare benefits within businesses and how they are affecting business both large and small. When businesses have to choose between smaller staff positions, or no medical coverages at all, to closing down completely due to the unaffordability of the new mandates, then you know there are issues that need to be looked at deeper. Legislation should not have to create Acts and Plans that supersede benefit packages from state insurance policies to protect people and companies from bankruptcy. New York increasing their plans by adding more and more additional benefits into their health plans should stop. Yes, drug addiction is a problem that needs attention and coverage. The state should look deeper into what is being covered and look at what can be taken out and replaced. Make plans that suite smaller businesses to where they can still afford to be competitive in the market with the larger corporations. Having mandated benefits do not only hurt the people that have to pay for them. The businesses have to pay for them as well in order for them to offer it to the employees. It all trickles downhill, hurting everyone in its path. Having choice would be a better option for everyone.

References

Beller, M. D. (2014). Mandated benefits, good or bad? At N.Y. hearing, reviews are mixed. Insurance Advocate, 19

National Conference of State Legislatures. (2018). Small and Large Business Health Insurance: State & Federal Roles. NCSL. Retrieved from https://www.ncsl.org/research/health/small-business-health-insurance.aspx

TRICARE. (n.d.). Health Plans. Retrieved from. https://www.tricare.mil/Plans/HealthPlans