Benefits March 21, 2005

GAO: One-Stops Satisfy Employers, but More Data Needed

March 21, 2005 (PLANSPONSOR.com) - A new report from the Government Accountability Office (GAO) suggests that while employers are, overall, satisfied with one-stop services, the Department of Labor (DoL) should collect more data to better address employers' needs.
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While only about 50% of employers are aware of their local one-stop, awareness increases as the size of the employer grows. For small business, about 50% are aware of such shops, while 66% of medium-sized businesses and 75% of large businesses are. Use is also correlated with size, with 75% of large employers using such one-stops, compared with only 50% of medium and 25% of small businesses doing so.

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Employers still use the systems primarily to fill job vacancies, according to the report.

A large majority (75%) of those who use one-stops are satisfied with their services, while 83% would go back to use them again. However, the GAO is recommending that the DoL lacks data on employer usage. It is recommending to the Secretary of Labor that she require states to collect and report on employer use of the workforce system. According to the GAO, the DoL agrees with the recommendation.

One-stop services were created by the 1998 Workforce Investment Act (WIA), which created a comprehensive workforce system – known as a one-stop system – which is designed to bring job seekers and employers together. State and local agencies are required through the WIA to bring together 17 federal programs and make their services available through about 1,900 one-stops across the country.

The survey polled 3,232 small, medium and large employers from the private sector from a nationwide database of businesses, according to the report. The businesses were divided into small (less than 49 employees), medium (between 50 and 499), and large (over 500).

For a copy of the report, please see http://www.gao.gov/new.items/d05259.pdf .

Benefits March 18, 2005

E&Y Outlines Problems, Solutions to Auto Industry Health Woes

March 18, 2005 (PLANSPONSOR.com) - A new white paper from Ernst & Young (E&Y) is asserting that the auto industry is being hit harder than most others with regards to health care costs, and also offers up some solutions to the problem.
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The E&Y report suggests that the size of the industry and foreign advantages in health care, employee consumption, and retiree to current employee ratios make the auto industry especially prone to health-care cost problems.

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Ford, DaimlerChrysler, and General Motors – the auto industry’s “Big Three” – spent over $10 billion on health care in 2003, a direct result of their sheer size, according to the report. American companies also have a competitive disadvantage because many of their competitors are based in countries, such as Japan and Germany, which offer universal health coverage. Also, because of the strenuous labor involved in the auto industry, auto workers tend to use more health care services. In addition, retirees tend to make up a greater portion of those covered by health plans provided by auto companies than those in other industries, according to the report.

E&Y, in its report, suggests possible means of fixing the problem. At the corporate level, E&Y suggests that there be greater cost and utilization analyses done in the industry, as well as an increased focus on wellness and lifestyle programs that promote healthy workers.

Also suggested is increased vendor management; E&Y suggests that auto companies demand the same quality and cost improvements in their health care system as they do in other aspects of the business. E&Y suggests finding the most effective vendor, renewing contracts to keep up with which vendor provides the most efficient service, and negotiating financial incentives into health contracts.

The company also suggests that auto companies move toward a more consumer-directed approach, in which workers take charge of their health program. E&Y asserts that productive “consumerism” requires information for employees on costs and quality, education of responsible health spending, and components that offer benefits to employees.

For a copy of the white paper, please see here.

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