Decides to offer employees medical insurance administered

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Reference no: EM13986843

A company with 100 employees decides to offer its employees medical insurance administered by a major health company, but funded totally by the employer—i.e., it self-insurance. The next year, five employees were diagnosed with major medical issues that cost several hundred thousand dollars each, which when combined with everyone else’s expenses, cost the company $2M for the year. The CEO is furious with his HR director who told him that, given their history of medical expenses, he could expect no more than $1M in total costs for the year. What is the best way to avoid this problem in the future?

A. Lay off old, sickly workers and hire only young, healthy workers

B. Set a limit of $10,000 on medical expense payments from the employer. Employees must take care of anything over that themselves.

C. Employer buy insurance that kicks in when medical expenditures exceed what the company expected or is willing to cover.

D. All of the above

Reference no: EM13986843

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