Chapter 10 Case Study Strategic Compensation Essay

1345 Words Feb 26th, 2013 6 Pages
Summary of Chapter 10 Case * Frontline PR is a public relations firm with 150 full time employees, consists mainly of their staff plus some administrative and operations people. Frontline is currently struggling with the cost of health care insurance * Currently offers their employees fee-for-standard, 300 deductibles, 20 percent co insurance, FSA Flexible spending account * After attending and speaking with several experts at the national conference on compensation on Health Savings Account, she thinks an HSA will be a viable option for Frontline. * She believes that making such change from standard fee-for-service plan to HSA with high- deductible insurance plan could result in significant cost savings for the company. …show more content…
| DISADVANTAGES OF HSAPeople who are older and sicker may not be able to save as much as younger, healthier people who need less medical care. | You decide how much money to set aside for health care costs. | Illness can be unpredictable, making it hard to accurately budget for health care expenses. | You can shop around for care based on quality and cost. | Some information, including cost and quality, can be difficult to find. | Your employer may contribute toward your HSA. | Pressure to save the money in your HSA might lead you to forgo care. | Money can be placed in your HSA on a pretax basis or may be deducted from your taxable income. | If you withdraw money from your HSA for nonmedical expenses, you'll have to pay taxes on it. If you're younger than age 65, you'll have to pay a 10 percent penalty, too. |

Source: http://www.mayoclinic.com/health/health-savings-accounts/GA00053

Q3-With HSA`s advantages and disadvantages, Susan must carefully study and analyze the pros and cons of HSA to Frontline`s employees. To determine if HSA could pay off for her company, she should have both a risk analysis and with the help of Allison, cash-flow analysis performed. She should examine the demographics of the employees and covered dependents, and review claims history. Knowing the age and distribution of the claims filed by health plan participants can help determine the risk the company would take on with