GMFC Case Study

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GMFC has two main choices, either figure out how to play or they pay, meaning they done one of five options, they either: absorb the cost, improve current plan efficiency, shift costs, eliminate ancillary health care benefits or end health plan sponsorship (Ratcliffe & Stover, 2015). If GMFC chooses the latter option of the five options, not only would there be significant labor relations problems, but that the penalty would equate to $2,000 per employee per year, minus the first 30 initial employees. Thus, employers are likely to pay a much lower penalty if they offer coverage than if they don’t offer coverage. This is important for GMFC because paying an entire year in violations would cost GMFC $99,941,998.80 which would make GMFC decreasingly able to compete if its total violation costs continue to increase because regulatory mandates become more and more cumbersome for not providing health benefits to employees. Additionally, this approach would affect GMFC’s attractiveness and retention of its high value employees, leading to other internal problems. To combat this GMFC would end up spending money on other compensations or an increase in overall wages of every employee. So in order to avoid the penalty and its astronomical costs, GMFC’s …show more content…

(Ratcliffe & Stover, 2015). The could also work on improving the current health care plans efficiency by managing unit costs through medical discounts, audits, program/service review, and contract reviews along with general promotion of health via promotions, biometric screenings, accountability strategies, disease management, and incentives would all help to manage the cost of health care for GMFC and its employees (Ratcliffe & Stover, 2015). Though, effective, this option would be best utilized in a combination

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