In a new comment, Anonymous@6:31 a.m. writes:
Historically, employer-provided health care coverage was used as a recruitment device, mostly during the 1940s when skilled employees were in short supply.
There were strict wage and price controls at the time, and health care coverage often was a deciding factor when companies were trying to land good employees. Provision of health benefits was offered in lieu of salary or other compensation that was forbidden by the laws of the time.
At this point, Gannett and other companies are adopting the employee-funded model, essentially taking away the benefit that originally was provided in place of salary. The unfair part of it is that they're doing so without effectively replacing the benefit with some other compensation.
In short, companies provided health insurance in place of money. Now they are withdrawing significant parts of the insurance coverage without replacing it with money. It's a pay cut, plain and simple.
The fact that the entire idea of employer-funded health insurance resulted from misguided government interference in the market is a debate for another day. Let's talk about the pay cut.
Related: From snake oil to science, accidents of history created U.S. health system.
As always, other views are welcome. Post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.
Historically, employer-provided health care coverage was used as a recruitment device, mostly during the 1940s when skilled employees were in short supply.
At this point, Gannett and other companies are adopting the employee-funded model, essentially taking away the benefit that originally was provided in place of salary. The unfair part of it is that they're doing so without effectively replacing the benefit with some other compensation.
In short, companies provided health insurance in place of money. Now they are withdrawing significant parts of the insurance coverage without replacing it with money. It's a pay cut, plain and simple.
The fact that the entire idea of employer-funded health insurance resulted from misguided government interference in the market is a debate for another day. Let's talk about the pay cut.
Related: From snake oil to science, accidents of history created U.S. health system.
As always, other views are welcome. Post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.
BS. Total compensation has increased.
ReplyDeleteP.S. You know you're dealing with a weak argument when you run into the pathetic cliché plain and simple.
Or when the person says: "You know, let's ignore the main, overriding concept that drives the whole thing."
DeleteIt's no surprise that Jim chooses to highlight this post. He operates at the same shallow level of comprehension.
@11:50
DeleteIt's the contention that increased benefit costs resulting in less disposable income is anything but a pay cut that's incomprehensible here. It's an argument worthy of Baghdad Bob. Nice outfit, emperor.
The new health plan is a paycut for me. I figure I am down $2K if nobody gets sick or needs the health insurance. The thing I don't understand (and I mean this, I don't understand, someone please explain) is the logic of this healthcare plan. Even if preventative health visits are covered (are they?) this will keep people from visiting the doctor at the onset of health problems - potentially leading to worsening conditions and more expensive care.
ReplyDeleteDue to the medical conditions of two of my children, the changes will result in significantly more out-of-pocket expense for prescriptions and doctor visits, before getting to the higher deductible.
ReplyDeleteThat's both plain and simple. "Simple," as in calling "BS" rather than presenting any rational rebuttal. And "plain" old lazy, as in disparaging a writer's choice of words instead of refuting a point.
No, it is not a pay cut. Your total compensation increases when the value of a benefit increases. In the case of health coverage, the value of the benefit increases substantially every year (and by more than your costs, so it's not even a "net" pay cut). Like it or not, it's just math.
ReplyDeleteAs for the incentive of managing your own costs, the idea is that you are perfectly capable of making rational decisions, including taking into account the potential consequences of putting off care.
9:29 Please explain why this is true: "In the case of health coverage, the value of the benefit increases substantially every year."
DeleteAre you talking about its paper value?
We're discussing economics, so I mean economic value.
Delete@953 - how do the health plan changes affect the economic value of Gannett employees' disposable income after covering health care costs under the plan? I dare say for most of us, the economic value of our net compensation will be lower. Call it whatever you want, but it's surely going to feel like a pay cut.
DeletePaying a higher price for an inferior product lessens value, doesn't it? The "total compensation" argument only takes unweighted dollars into account. It might be valid if I could still go out and buy a Chevy pickup for $5,000 and gas it up for 75 cents a gallon.
ReplyDeleteNobody should be happy about the cost of medical care, much less its inflation rate. For many it is a real hardship. But it doesn't accomplish anything to muddle the issues, and not recognize the true value of the benefit where it is still offered.
ReplyDeleteThese changes mean that after covering my family's medical needs, I'll have less money available to pay for the other things we require, like food, shelter, clothing and transportation. That's not muddling an issue - it's placing a value on what's in my pocket. And that's going down.
DeleteYour analysis is right on target, Jim. This change will push more of the costs onto employees and save money for Gannett. And you can bet that Gannett isn't going to put that money into pay raises to offset the higher costs for employees.
ReplyDeleteNobody's "saving" money. The employer still pays most of the freight and absorbs most of the year-on-year increase. The reality is you DO get a pay raise.
DeleteFirst, this wasn't even Jim's "analysis." It's just some random poster who doesn't get it, but Jim thinks he does.
DeleteNext, where do you get that Gannett is saving money? Show me some proof.
A pay raise would mean more money that's not already spoken for when it's earned. That's not what's happening here.
DeleteI think most people "get" that you can't call it a raise if you end up with less. But keep up the sniping if you must, since your position is not supported by the evidence. Less money is less money.
For 2014, Gannett is reducing the amount of overall employee medical it will pay to 50% from 60% this year.
DeleteThat may not yield a net savings over 2013 spending -- but it will reduce what it would have spent otherwise next year if the formula had stayed 60%-40%.
In modeling the 2014 budget, that's how it is saving money.
Because the "affordability" of coverage is based on just the employee's single premium, ( it's considered affordable if it doesn't exceed 9.5% of the employee's wages) it appears that many families will not be able to take advantage of the exchanges and the tax break on premiums they provide...It's being called the "family glitch"
DeleteBut there's a second criteria which is coverage is considered inadequate if the plan's does not coverage at least 60 percent of a person's medical costs on average...If Gannett is only going to provide on average 50% as stated above is that a way for families to get out and utilize the exchanges along with the tax breaks on premiums??...Fingers crossed it is.
Let's see: My premium is going up over 10 percent with less benefit -- no co-pays for visits or prescriptions, etc. -- I'll now have to pay the full cost of the service or product (the one break we catch here is that the rates have supposedly been negotiated with the insurance co.'s, so we'll pay that instead of the full price uninsured people pay). And I can spend $3K out of pocket before my insurance kicks in a dime. That's a major cut in the value of our insurance. Seems plain AND simple.
ReplyDeleteYeah, that's called a deductible. Good to see you know what it means.
DeleteThere has always been a deductible -- what's new (and is explained above) is that the co-pays, which brought down costs of doc visits and prescriptions, are gone. That will make a considerable difference financially to many people next year. (The site is thick with trolling this week -- wonder why?)
Delete12:54: Re: trolling - Ya think? Some comments on this thread must be copy-pasted from the HR FAQs.
DeleteLooks like I'll be shelling out $3,000 more, straight out of my paycheck. Even if coverage was staying the same (and it's not), that's a net loss, since it's not like my salary is going up $3,000 to make up for it.
ReplyDeleteWe're paying more, getting less, and have no hope for raises -- hell, we were told at my site to be damned thankful we still have a job, and if in 6 months advertising can't make their goals, the newsroom's getting hit with layoffs again.
Because the "affordability" of coverage is based on just the employee's single premium, ( it's considered affordable if it doesn't exceed 9.5% of the employee's wages) it appears that many families will not be able to take advantage of the exchanges and the tax break on premiums they provide...It's being called the "family glitch"
ReplyDeleteBut there's a second criteria which is coverage is considered inadequate if the plan's does not coverage at least 60 percent of a person's medical costs on average...If Gannett is only going to provide on average 50% as stated above is that a way for families to get out and utilize the exchanges along with the tax breaks on premiums??...Fingers crossed it is.
Someone is playing corporate damage control. Jim's argument is relevant. This step with Obamacare is one step closer where we all want to see things - universal health coverage where employers are removed from providing health care coverage for employees. As Jim and others and finding out are corporations use to factor in wages and benefits when they presented an offer to an employee. They did this because they had to compete for talent in a market that favored employees. We have seen that for decades, so employers have been working hard to eliminate all costs related to employees and health care is one of the largest.
ReplyDeleteHowever, what smart employees are catching on to is they aren't replacing it with anything. But, where are you going to go when an industry is shrinking?
Here's a tip from other industries: the dynamics favor employers and they will use this to scalp good employees by offering higher salaries to lure good peeps from other firms, or they will collude with one another and fix/freeze salaries.
"But, where are you going to go when an industry is shrinking?"
ReplyDeleteUh, gee, dunno.... maybe an industry that is growing? Could that be it? After all, you're talking about "smart" employees, right?