The annual loss ratio for a company’s health plan is 158%. The CHRO has been asked to propose changes to the plan that will lower costs while retaining as many of the current benefits as possible. A review reveals that the dental and prescription drug coverage account for 84% of the plan’s claims and that 3 of their 91 employees account for 73% of the claims.After reviewing available options, the CHRO decides that the best option is a plan that doubles the deductibles on dental and prescription benefits and lowers maximum reimbursement coverage by 25%. The CHRO presents the suggested changes to the company’s executive committee. After a brief discussion of the rationale and the merits, the COO mentions that the company should announce the plan’s changes immediately. The CHRO responds that doing so would defeat the purpose of the changes. The executive committee proceeds to vote and accept the changes to become effective upon plan renewal the following month.
How should the company react to the employees who are using the benefits excessively?
Wait until the plan changes are in effect and then hold a company-wide meeting using aggregated data to explain why the changes are necessary.
Issue disciplinary action to those employees who have used the benefits in excess of normal use.
Confidentially meet with the employees responsible and advise them that their use was the main reason why the plan had to change for everyone.
Nothing should be done; the plan should be changed and no reason should be given to the employees.
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