Companies rarely switch the health plans they offer to their workers, and seem to be especially cautious in the 2020 election year.
The big picture: Medical and drug costs are crushing employers and workers alike. But altering benefits — which could require employees to change their doctors — could provoke even more anger.
The former CFO of Huntsville (Texas) Memorial Hospital is suing the hospital for breach of contract and defamation, according to the SE Texas Record.
In his complaint, filed Aug. 28, Guy Gros claims he was hired as Huntsville Memorial’s CFO in February 2013. He was initially given a two-year contract and then a three-year contract with automatic renewals, according to the lawsuit.
Under the contract, the hospital could terminate Mr. Gros’s employment for cause. On Dec. 2, 2016 he was terminated for alleged cause. However, Mr. Gros asserts that he was fired for raising concerns about the hospital’s finances.
Mr. Gros further alleges his reputation was damaged by false statements made by the hospital’s then CEO, who allegedly told a board member that Mr. Gros “did something illegal, something he should not have.”
Mr. Gros is seeking past and future wages, lost employment benefits and compensatory damages.
Whole Foods is cutting medical benefits for hundreds of part-time workers, the company confirmed to Business Insider on Thursday.
The changes will take effect on January 1 and affect just under 2% of Whole Foods’ total workforce, a Whole Foods spokesperson told Business Insider.
Whole Foods has about 95,000 employees, so it means about 1,900 people will lose benefits.
The benefits that the company is cutting are offered to part-time employees who work at least 20 hours a week. The changes will not affect full-time employees.
Whole Foods said it was making the change “to better meet the needs of our business and create a more equitable and efficient scheduling model.”
“The small percentage of part-time team members … who previously opted into medical benefits through Whole Foods Market’s healthcare plan — less than 2% of our total workforce — will no longer be eligible to buy into medical coverage through the company,” the Whole Foods spokesperson said.
“We are providing team members with resources to find alternative healthcare coverage options, or to explore full-time, healthcare-eligible positions starting at 30 hours per week. All Whole Foods Market team members continue to receive employment benefits including a 20% in-store discount.”
A 15-year employee of Whole Foods said she was devastated by the news.
She told Business Insider in an interview that her family was covered by the health-insurance plan she is enrolled in through her job at Whole Foods.
She said she would have to increase her hours to become eligible for full-time benefits and pay for childcare, or shop for a new and potentially more expensive health-insurance plan on the private marketplace. She spoke on condition of anonymity for fear of retribution.
“I am in shock,” she said. “I’ve worked here 15 years. This is why I keep the job — because of my benefits.”
The Trump administration has opened the door to altering how healthcare benefits are provided to millions of American employees. A new rule, set to go into effect next year, will allow employers to provide workers with funds to shop for coverage on their own, an option that could dramatically upend employer-sponsored coverage.
Instead of working with an insurer and allowing employees to pick from a few insurance options, employers will be able to funnel money into a standalone tax-exempt HRA (health reimbursement account) and employees could use those funds to shop for coverage on their own, either on the Affordable Care Act marketplaces or off.
“Long term, this added flexibility may reshape a significant number of employer coverage offerings and result in sizable shifts from employer to individual coverage,” Chad Brooker, an associate principal at Avalere who consults on healthcare reform and the impacts on business strategy, said in a statement.
White House officials said the change provides more flexibility to employers and gives workers greater choice when choosing coverage. The White House expects 800,000 employers to choose this defined benefit contribution option, which is expected to affect 11 million employees and their families.
The American Benefits Council cheered the move.
“We commend the Administration for taking what we believe is an important step toward greater flexibility in health care coverage,” the employer group’s president, James Klein, said in a statement.
But others voiced their concerns about potential costs and access issues.
Paul Fronstin of the Washington, D.C.-based Employee Benefit Research Institute said it may be overwhelming for some employees used to relying on their employers to do the bulk of the shopping for them or going to bat for them when an issue with the insurance carrier arises.
“Some people are going to like that and some people are going to hate it,” Fronstin told Healthcare Dive.
Positives of the idea are that it could lessen job lock, when an employee is somewhat stuck in a job because they don’t want to, or can’t afford to lose benefits, including health insurance.
With the unemployment rate near a historic low, Fronstin doesn’t expect large employers to switch immediately. However, when the next recession hits, “I think the future of health benefits gets put to the test,” he said.
But others say the idea that it solves job lock is overplayed.
The options on the ACA exchange, particularly in St. Louis, may come as a shock to employees who are used to robust networks, Kevin Guss, vice president of private client benefit services for St. Louis-based benefits consulting firm J.W. Terrill, told Healthcare Dive.
There are few providers selling individuals plans, out-of-pocket maximums are far higher and many have very limited networks with little out-of-network availability, he said.
“You can save money if you pursue this path, but buyer beware,” Guss said.