I thought I would relay something that has been transpiring at the company am associated with over the past two months.
Basically, our employees have a health care plan (a blue one) and get 401K matched retirement benefits.
The board, accounting and legal departments have met to best position the company in light of a possible government option. Based on what has been reported, what the cost, employer penalty and predicted increases in private insurance will amount to, they are trying to figure out the best position to be in. Basically, trying to figure out what the bottom line may look like.
Interestingly, with what they have hatched, the solution is fairly elegant: however, the availability of a public option ultimately hurts the employees, and protects corporate profits.
1.) All employees except management will not have their annual contracts renewed, HOWEVER, each of those employees will be given the opportunity to keep their job as a PRIVATE CONTRACTOR. They will be given a 20% per hour raise with their contracts.
2.) Making them private contractors does a number of things: a) removes some level of liability from the company in case of sexual harassment, etc. This will result in our liability insurance premiums to decrease by over 30%. b) it eliminates the employer's responsibility to pay payroll taxes and FICA. The employees, as private contractors, will be responsible c) the retirement program will be discontinued, however private contractors who establish retirement 401K (equivalents) will get a yearly bonus equivalent to around 50% of the former match amount. d) as private contractors, all employees become "at will," meaning no cause is necessary to release them, as long as their contracts are fulfilled. e) their health benefits will cease, and they will be able to purchase from the government option or "exchange." f) services such as parking, etc will remain free, but if necessary parking permits will be implemented and can be purchased by the private contractors. g) all private contractors will be subject to confidentiality agreements, and the company can litigate against them in case of intellectual or corporate theft. h) the company will not be subject to government penalties due to not providing health care, as they will have very few actual "employees" and those employees will maintain their current health care plan. As far as the "higher ups" know, there will be no way to regulate these private contractors, if they don't want insurance, they pay the penalty out of their own pockets.
3.) The estimated cost savings of this implementation runs around +10-20% for the company, on our personnel expenses (not overall profit margin, that number is closer to 4%).
4.) Some raised the issue of losing employees, however, the job situation in Michigan is so terrible right now, this was viewed as an unlikely real problem.
In the end, with the availability of the public option, the company will save some money. The employees will be dumped on the public option, and will have to pay for it out of their own pockets. In addition, their retirement will take a big hit. Also, almost every employee will need an accountant to handle their taxes from now on, as they each essentially will be running a "one man company."
This plan would, unfortunately, result in more take-home pay, but offset by increased "out of pocket expenses", a likely lower level of benefits, and reduced retirement income. The only upside is increased profit for the company.
I was wondering why the upper management was so excited about the public option.
As a side note, the nature of my position would not cause the changes to affect my situation, I'm not management but I am an "exempt" employee class. There are just a few of us, so we weren't even discussed.
So, in the end, corporations will get higher profits and screw employees, and in a state like Michigan, they can get away with it easily.
