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Discretionary benefits may be understood as compensation to employees, which is not mandated by the law. Such benefits may involve life insurance, pension plans, maternity or sick leaves, prescription drug insurance, and others. To comprehend the role of discretionary benefits, it is essential to investigate employees’ needs and expectations concerning their work. Employees working for ABC company ask for more benefits, and it seems that their request is justified and relevant.
ABC is a middle-sized company that operates in the cleaning industry and has approximately 200 employees. The company provides an average level of remuneration, transportation services, and holiday bonuses. The employees ask about health insurance benefits since they are prone to various diseases such as diabetes, varicose, cardiovascular issues, et cetera. Since many employees cannot afford some vital health services, they tend to visit hospitals rarely, which creates chronic conditions. Besides, employees need wellness programs to restore their health after physical work.
The review of the company and the recent scholarly literature show that there are several options for providing health plans to employees. One of them is to offer high-deductible health plans, including health reimbursement arrangements (HRAs) or health savings accounts (HSAs) (Fronstin & Roebuck, 2013). It is reported that high-deductible health plans are a viable solution for employees with low and middle income. However, other studies reveal that chronically ill patients may reduce their visits to doctors (Wharam, Zhang, Landon, Soumerai, & Ross-Degnan, 2013).
In particular, the evidence shows that they are likely to limit visits, while laboratory examinations and acute visits remain unchanged (Reddy, Ross-Degnan, Zaslavsky, Soumerai, & Wharam, 2014). Similar results are found by Fronstin, Sepúlveda, and Roebuck (2013), who state that outpatient physician visits are reduced in a long-term period. Therefore, it seems that ABC should be more attentive to the health benefits offered to employees.
The implementation of wellness programs presents several advantages to both organizations and employees. For the employer, the provision of discretionary health benefits guarantees the stability of the team. The studies show that in companies that do not spare funding for such benefits, employees tend to value their work more than those who have less protection (Fronstin & Roebuck, 2013). If the employer demonstrates generosity and reliability during many years, then the personnel will be ready to show solidarity in times of crisis and even accept the reduction in wages for some period.
Considering the given case from the point of the company’s success, it is possible to suggest that wellness programs are likely to reduce health care costs since healthy lifestyles, proper nutrition, and disease prevention will be targeted. Moreover, employees will show less absenteeism as they will feel better, which seem to positively affect the productivity levels. It should also be stressed that health benefits will enhance both the physical and psychological condition of employees, who will feel the protection and support of their company. Thus, discretionary health benefits, including insurance and wellness programs, will be rather advantageous about the described case.
Fronstin, P., & Roebuck, M. C. (2013). Health care spending after adopting a full-replacement, high-deductible health plan with a health savings account: A five-year study. Issue Brief, 388, 1-16.
Fronstin, P., Sepúlveda, M. J., & Roebuck, M. C. (2013). Consumer-directed health plans reduce the long-term use of outpatient physician visits and prescription drugs. Health Affairs, 32(6), 1126-1134.
Reddy, S. R., Ross-Degnan, D., Zaslavsky, A. M., Soumerai, S. B., & Wharam, J. F. (2014). Impact of a high-deductible health plan on outpatient visits and associated diagnostic tests. Medical Care, 52(1), 86-92.
Wharam, J. F., Zhang, F., Landon, B. E., Soumerai, S. B., & Ross-Degnan, D. (2013). Low-socioeconomic-status enrollees in high-deductible plans reduced high-severity emergency care. Health Affairs, 32(8), 1398-1406.