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Health Care Plans

Smith’s Oil & Auto 2016


The Smith’s Oil & Auto (SOA) owns several gas stations and auto repair shops in Pennsylvania, New Jersey, and New York. They have been in business for 35 years and have grown from 10 employees to 500 employees in 2015. SOA prides themselves in taking care of their employees and has offered health care benefits to all its full-time employees and those who work part-time at least34 hours per week. SOA has benchmarked themselves against the industry and other local companies similar in size.

Several years ago President Obama introduced the Patient Protection and Affordable Care Act (a.k.a. Health Care Reform). Over the course of several years implementation has started to take place. SOA has done their best to keep up with Health Care Reform (HCR) but they have a small human resources department and have not been able to devote the time.

Here are some company facts:

Employee Information*(see attached census of employees):

  • 500 total employees
  • 217 full-time all who earn over $40,000 per year
  • 150 work between 20-29 hours per week
  • 62 work between 30-33 hours per week
  • 71 employees work 34-39 hours per week

Health Care Plans:

SOA offers two plans to eligible employees – a PPO and an HSA. They are currently fully-insured and on 1/1/2012 they moved insurance carriers on their effective date from Blue Cross to Aetna. At that time they also made a couple of plan design changes to their PPO. They increased the in-network deductible from none to $500 single, $1000 family in order to keep the premium low. They also raised the copay for doctor’s visits from $20 to $30. SOAtold you they grandfathered their plans under HCR.

Attached find a copy of the two plan designs currently in place.

Information on Rates and Employee Contributions per month:

Single Rates/month $440 $330
Family Rates/month $935 $715
Single Contribution/month $220 $165
Family Contribution/month $468 $358
*Information not given on seasonal/temporary workers.




Smith’s Oil & Auto has hired your team to assess their compliance with Health Care Reform. You must look at their current program and determine if they have implemented the required reforms and let them know what is on the horizon. They are most interested in knowing if they were compliant with 2015 requirements and if they are still compliant for 2016. What kind of penalties would they face if not compliant? You must explain ALL options available to them. Then, make a recommendation for their program. They would like to stay as cost neutral as possible. Be able to support your recommendation with a thorough analysis of why this is in the best interest of the company.

Unfortunately you may not have all of the information to determine if they have implemented every reform. Since that is the case, make sure to outline any reforms you think will impact this company (both past and future). The format should be a business style report. Charts, graphs, etc are welcome to supplement your material.

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Category: Sample Questions