With a possible strike between ATT and the Communications Workers of America set to begin tonight at midnight, the issue of health care serves as a major focal point between management and union leadership.
According to an article in today's Wall Street Journal, the union is upset that management wants to charge them for health benefits. Until the contract expires tonight, union workers did not pay for their health insurance premiums. That may change if a strike settlement occurs.
As someone who has designed health benefits plans for major companies, I would bet that neither mangement or their union counterparts have looked at the details of their health insurance plan. In fact, I would guess that neither side could name the carrier that provides the union with their health, dental or vision plans.
A thorough audit of the plan and its coverages would help both sides understand the scope of the issue. Once they look at the costs, they should evaluate these factors to reach an agreement.
1) Most workers rarely need major medical hospitalization. Studies have shown that for most companies, only three-percent need major hospitalization. Having a higher deductible for each worker will lower the costs. With the savings from this program, ATT could establish a Medical Expense Reimbursement Plan that would pay for the small number of people who require hospitalizaton.
2) What has ATT done to promote a healthy lifestyle? Companies that promote healthy lifestyles tend to have lower health benefits claims than those who don't promote them. Having a gym onsite or educating a work force on diabetes and stroke prevention are just a few of the variables that could decrease the costs of health insurance.
3) Know that claims paid to premium ratio. As most companies hover at a 30-percentage range for the typical claims to premium paid ratio, ATT can negotiate with their carriers to keep them from increasing the cost of health coverage every year.
4) Understand which carriers provide the most "in-network" coverage for specific areas. By using regional plans with different carriers, ATT could lowers it costs. For example, AETNA may have the best network of medical providers in Georgia, while Blue Cross could provide a more extensive network of providers in San Antonio.
5) Communicate how the company is doing with its claims to premium ratio. If ATT union memebers have a high rate of claims redemption, management should stress healther lifestyle options in their corporate communications program.
ATT and the CWA are not unique organizations when it comes to health benefits. Few truly understand the risk or costs involved with their employee benefits program. Yet, companies could change this by bringing in an outside broker who can work with their financial and human resources team to help them comprehend the nuances of their corporate health benefits packages. This effort could help them lower their health benefits costs.