BUSI 440 Case Study Forum Instructions Instructions: You are required to submit 2 replies during each discussion, and each post must include proper spelling and grammar – 250 word minimum. · All replies must address the major points of the question posed and be supported by: · Reading & Study Materials (2 citations in current APA format required). · Integration of 1 or more biblical principles. · Pertinent, conceptual, or personal examples. · Thoughtful analysis (considering assumptions, analyzing implications, comparing/contrasting concepts). · Clarity must be brought to issues being discussed and each reply must relate issues to 1 or more biblical principle and experience. Topic: If you were on the Health Benefits Committee of Quality Auto Parts, in the Nikomo, Fottler, & McAfee: Case Reading: Controlling Employee Benefit Costs, how would you describe the nature and causes of the employee health insurance cost problem? What information should be gathered and reviewed before making a recommendation? Explain and discuss your answer. Textbook: Nkomo, S., Fottler, M., & McAfee, R. (2011). Human resource management applications: Cases, exercises, incidents and skill builders (7th ed.). Mason, OH: South-Western Publishing Co. Student 1: Quality Auto Parts, an automotive manufacturer, is faced with a problem. The company wants to provide their employees with exceptional benefits as they have been known to do, but need to do so in a way that is cost effective. Unfortunately, the rising cost of health insurance and struggling economy makes it difficult to do so.  John DeCarlo, the CEO for the company found out, “the total employee health insurance costs increased from $4,680 per employee per year in 2000 to $9,869 in 2010” (Nkomo, Fottler & MAfee, 2011, 234) and costs continue to rise. The company must determine the best way to continue offering benefits in a cost-effective manner. In order to determine the best plan of action for the organization, John DeCarlo creates a committee to look into its options. The group has multiple options to consider. For the Health Benefits Committee to make an educated recommendation, additional information needs to be obtained and reviewed. Each option which the group is asked to consider needs to have details provided with regards to cost and the actual coverage entailed. In addition to obtaining information on each of the options available, the organization should also consider researching its competitors to determine what they offer and how they structure their plans. “One of the best strategies for determining external equity is to conduct a benefit survey. Alternatively, many consulting organizations, professional associations, and interest groups collect benefit data that can be purchased. Perhaps the most widely used of these surveys is the annual benefit survey conducted nu the U.S. Chamber of Commerce. The Employee Benefit Research Institute is also a first-rate source for benefits information” (Mil ...

1. BUSI 440
Case Study Forum Instructions
Instructions: You are required to submit 2 replies during each
discussion, and each post must include proper spelling and
grammar – 250 word minimum.
· All replies must address the major points of the question posed
and be supported by:
· Reading & Study Materials (2 citations in current APA format
required).
· Integration of 1 or more biblical principles.
· Pertinent, conceptual, or personal examples.
· Thoughtful analysis (considering assumptions, analyzing
implications, comparing/contrasting concepts).
· Clarity must be brought to issues being discussed and each
reply must relate issues to 1 or more biblical principle and
experience.
Topic: If you were on the Health Benefits Committee of Quality
Auto Parts, in the Nikomo, Fottler, & McAfee: Case Reading:
Controlling Employee Benefit Costs, how would you describe
the nature and causes of the employee health insurance cost
problem? What information should be gathered and reviewed
before making a recommendation? Explain and discuss your
answer.
Textbook: Nkomo, S., Fottler, M., & McAfee, R. (2011). Human
resource management applications: Cases, exercises, incidents
and skill builders (7th ed.). Mason, OH: South-Western
Publishing Co.
Student 1: Quality Auto Parts, an automotive manufacturer, is

2. faced with a problem. The company wants to provide their
employees with exceptional benefits as they have been known to
do, but need to do so in a way that is cost effective.
Unfortunately, the rising cost of health insurance and struggling
economy makes it difficult to do so. John DeCarlo, the CEO for
the company found out, “the total employee health insurance
costs increased from $4,680 per employee per year in 2000 to
$9,869 in 2010” (Nkomo, Fottler & MAfee, 2011, 234) and
costs continue to rise. The company must determine the best
way to continue offering benefits in a cost-effective manner.
In order to determine the best plan of action for the
organization, John DeCarlo creates a committee to look into its
options. The group has multiple options to consider. For the
Health Benefits Committee to make an educated
recommendation, additional information needs to be obtained
and reviewed. Each option which the group is asked to consider
needs to have details provided with regards to cost and the
actual coverage entailed. In addition to obtaining information
on each of the options available, the organization should also
consider researching its competitors to determine what they
offer and how they structure their plans. “One of the best
strategies for determining external equity is to conduct a benefit
survey. Alternatively, many consulting organizations,
professional associations, and interest groups collect benefit
data that can be purchased. Perhaps the most widely used of
these surveys is the annual benefit survey conducted nu the U.S.
Chamber of Commerce. The Employee Benefit Research
Institute is also a first-rate source for benefits information”
(Milkovich, Newman & Gerhart, 2017, p. 453). Through
obtaining information on what competitors offer, Quality Auto
Parts can better judge how their current structure and the
proposed will stack up against others in the market.
Quality Auto Parts is known “as a ‘‘preferred employer’’
because it had always paid above the market wage rates and its
benefits were always more liberal than those of other U.S.
companies and particularly those of foreign competitors.

3. DeCarlo did not want to do anything to jeopardize his
company’s advantage in attracting and retaining high-quality
personnel” (Nkomo et al., 2011, 235). Through thoroughly
researching and picking the best option for both the company
and its employees, the organization can continue to do so as
“medical benefits continue to be ranked tops in importance for
most employee groups” (Milkovich et al, 2017, p. 445). The
Bible says in Philippians 2:4, “Let each of you look not only to
his own interests, but also to the interests of others”
(BibleGateway, n.d.); through providing benefits and taking
care of their employees, Quality Auto Parts is doing just that.
Works Cited
BibleGateway. (n.d.). Retrieved April 26, 2017, from
https://www.biblegateway.com/passage/?search=Philippians%2
B2%3A4
Milkovich, G. T., Newman, J. M., & Gerhart, B. A.
(2017). Compensation (12th ed.). New York, NY: McGraw-
Hill.
Nkomo, S., Fottler, M., & McAfee, R. (2011). Human resource
management applications: Cases, exercises, incidents and skill
builders (7th ed.). Mason, OH: South-Western Publishing Co..
Student 2:
Quality Auto Parts’ insurance plan is an old-fashioned plan
where the employees have no say in what type of coverage is
provided. As Nkomo mentions, “(Blue Cross-Blue Shield) is a
traditional indemnity insurance plan. All employees have one
plan, which makes no effort to control the health-care services
provided” (Nkomo, 2010, p. 235). In particular, the biggest
problem is from the health insurance company continuously
increasing their premiums over the last several years in order to
recuperate from their recent losses.
According to Nkomo:
Many of the speakers at the conference cited large catastrophic-
illness claims, increased use of mental health and substance

4. abuse services, increased use of medical services, high-
technology medicine, cost-shifting from government programs
(Medicare and Medicaid) to private insurance, high physician
fees, the AIDS crisis, the demographics of employees in the
auto industry (i.e., a higher percentage of older employees), and
recent premium increases by both traditional and managed care
plans attempting to recoup recent losses. (Nkomo, 2010, pg
234).
Before making any impulsive decisions on switching their
current provider, the Health Benefits Committee will need to
research several other options that are available. “High-
deductible health plans (HDHPs) are one option to traditional
health plans which employers have considered to respond to the
increased costs of health care” (Smith, 2015). Since there is
such a high deductible involved in this plan, the employees will
need to be more careful when using their insurance. However,
traditional plans can also have the option to include a flexible
spending account. “High-deductible plans may qualify
employers to offer their employees an option of a health savings
account. So in choosing between a traditional plan and a high-
deductible plan, an employee should not only consider the
premiums and the medical benefits offered, but should also
consider the tax implications of that choice” (Smith, 2015). It is
shown that, “a high-deductible health plan (HDHP) combined
with a tax-favored health savings account (HSA) induces more
savings and less treatment compared with a full coverage plan
under reasonable risk preferences” (Peter, 2016).
In order to reduce minimal reaction from the employees,
it will be essential to show the employees that the company has
done all of its research in order to provide the most affordable
and sensible policy for everyone involved. While there may be
some changes, allowing your employees to have a sense of
direction is crucial to keeping this a smooth transition. My
recommendation is to essentially provide several different
options for employees so they are able to choose what overall
best suits those participating. Going forward, there will be a

5. combination of choices three and four that were recommended
by the committee. This includes, “Establish a special self-
insurance fund and negotiate preferred provider arrangements
(PPOs) with local providers (i.e., discounted prices in exchange
for the directing of these employees to these providers); along
with merging with the following, “The combination of
catastrophic health insurance plan for major medical expenses
coupled with a Health Savings Account (HSA) for smaller, more
routine healthcare expenses” (Nkomo, 2010, p. 235).
Furthermore, it will be in the best interest of the committee to
continue to monitor these changes going forward. At the end of
the day, it is always best to put any decisions you need to make
in God’s hands. “Do not be anxious about anything, but in
everything by prayer and supplication with thanksgiving let
your requests be made known to God. And the peace of God,
which surpasses all understanding, will guard your hearts and
your minds in Christ Jesus” (Philippians 4:6-7).
References:
Nkomo, S. M., Fottler, M. D., & McAfee, R. B. (2010). Human
resource management applications: Cases, exercises, incidents
and skill builders (7th ed.). Mason, OH: South-Western
Cengage Learning.
Peter, R., Soika, S., & Steinorth, P. (2016). Health insurance,
health savings accounts and healthcare utilization. Health
Economics, 25(3), 357-371. doi:10.1002/hec.3142. Retrieved on
April 26, 2017 from
http://onlinelibrary.wiley.com.ezproxy.liberty.edu/doi/10.1002/
hec.3142/abstract
Smith, S. R. (2015). Tax and other implications of traditional
health insurance plans versus high-deductible health plans.
Journal of Business and Behavioral Sciences, 27(2), 102.
Retrieved on April 26, 2017 from
http://search.proquest.com.ezproxy.liberty.edu/docview/175041
1683?pq-origsite=summon&accountid=12085