Understanding Health Insurance Needs for Small Businesses in the U.S. to Formulate the Information Technology Strategy
The Patient Protection and Affordable Care Act will significantly impact the small business sector of the United States. The case study conducted by Rahul Bhaskar, Steven G. Mihaylo, and Yi “Jenny” Zhang focuses on health insurance needs for small businesses and information technology strategy. The cases analysis discuss the problems faced by a particular insurance company, ASBC, as it relates to employee versus employers health insurance preferences. The derived solution to the company’s issues regarding new healthcare reforms and information technology strategy are explored in detail with proper justifications assessed. Problem Identification
This case analysis examines ASBC approach to understanding their health insurance needs. Before identifying the problem it is necessary to discuss the economic issues. There are a plethora of insurance companies for individuals and organizations to choose from in America. Insurance companies offer an array of benefits, after selecting the appropriate company the individual must then choose a benefits package that suits their needs. America is currently experiencing a major health care reforms known as The Patient Protection and Affordable Care Act. There are two laws from the healthcare reform act that impacts the small business sector immensely: The Patient Protection and Affordable Care Act states that if a business has less than 50 full-time employees, average wage of employees is less than $50,000 per year, and the business contributes at least 50 percent of the premium, it will then get up to 35 percent of the employees premium contribution as a credit. (Bhaskar, Mihaylo, Zhang, 2012, pg. 1) However, this tax credit is not applicable to small business with more than 50 employees which accounts for over half of the workforce. Due to rising premiums health benefit options are being reduced. According to various surveys private sector companies are less likely to offer health insurance as compared to large corporations or even government (Bhaskar et al., 2012). Learning about the changes in health care sets the stage for the problem presented in this case. ASBC conducted a survey that analyzed the cause of the differences in employee versus employer’s preferences when it comes to health insurance. The problem is figuring out how to align employee and employer preferences so that ASBC can design a plan that is favorable for both parties. Causes of the Problem
There are three causes to the problem identified in this case. The first cause to be examined is the cost of providing insurance to employees, the next cause is healthcare reforms currently taking place, and finally the lack of technology innovation that is currently happening with ASBC’s business. This section will demonstrate how these factors are leading employers to provide inadequate health benefit packages from the employees’ perspective.
In recent times, the conversation of how healthcare costs are bankrupting millions of Americans has been on the table. Many companies provide health benefits, and with healthcare costs rising employers are forced to share premium costs with employees and or provide less than glowing benefit options. The survey conducted by the ASBC company found that the three most important factors for employers were annual deductible, monthly premiums, and the cost of prescription drugs (Bhaskar et al., 2012). These factors are the most consumed by employees, and contributes to a large part to the cost of providing insurance. It is important for companies to maintain cost efficiency when providing health benefits in order to achieve the overall goal of maximizing shareholders wealth. Recently, there has been political debates and election issues over rising healthcare cost. Many politicians are trying to find ways to combat the...
References: Bhaskar, R., & Zhang, Y. (2012). Understanding health insurance needs for small businesses in the u.s. to formulate the information technology strategy. Journal of Cases on Information Technology, 14(4), 1-11.
Pearlson, K.E., & Saunders, C.S. (2013). Managing & using information systems a strategic approach . (5th ed., p. 24). Hoboken, NJ: John Wiley & Sons, Inc.
Pearlson, K.E., & Saunders, C.S. (2013). Managing & using information systems a strategic approach [Powerpoint slides]. Hoboken, NJ: John Wiley & Sons, Inc.
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