Don't get stuck in the health care reform cycle

There is a tremendous amount of debate surrounding health care reform in the United States these days. Proponents argue the moral obligation of providing health care coverage for Americans while detractors talk about the enormous costs and that states and companies should be free to determine whether they want to offer health care coverage or not. For those who've read any of the history of this blog, you know that I am not going to fall down the political rabbit hole. Instead, I want to address some of the history of employer-sponsored health care in making the argument that progressive companies will find new ways to attract and retain talent now that health care is becoming potentially more commoditized.

During World War II, the US government instituted a number of austerity and industrial edicts. Car plants made tanks, women began entering the workforce in droves and challenge many workplace assumptions and paradigms. Another mandate was that wages were strictly controlled in order to maintain a more consistent industrial engine to support the war effort. Without the ability to attract and retain talent using wages, companies began using per-tax benefits or help differentiate themselves from competitors. Because health insurance was (and still is ) a qualified per-tax benefit, companies found that they could vary their company contributions as well as the design of the benefits offered to differentiate themselves. This is the model that exists to today.

So, health care reform introduces government-mandated exchanges for all Americans to secure health insurance if they cannot otherwise get it. Conceivably, the design of these exchanges allow those who are not working to get affordable insurance covering a certain minimum level of benefits. The exchanges and even subsidies for those whose household earnings are within a certain range of the federal poverty level are funded through premiums paid by the enrollees but also primarily taxes on companies and various penalties or taxes.  

Companies are paying now and they will pay tomorrow. The issue at work here is that companies were previously able to manipulate plan design and contributions without a real "market median". Smart companies were always benchmarking their benefits with peer groups in their region, industry and/or size but there was no "or else" factor. Now, the state and federal exchanges will create the new benchmark market comparison. I would argue that in five years, health care plan design will be dramatically different than it is today as exchanges become more sophisticated and the costs of participating or not for companies lead to a homogenization of health care insurance in this country.

So, progressive firms need to be taking this opportunity to think about how they will attract and retain talent when health care benefits are not a point of differentiation. Wages are already very market-driven. Will it be your commitment to wellness, health and safety? What about the intrinsic motivation of how your jobs are structured? Start the conversation now and you will be ahead of the curve when all others are wondering what happened to their employment brand when health care evolves.