Cutting Costs at Ventacare Exercise

Cutting Costs at VentaCare Exercise

What are the discretionary benefits provided by VentaCare? What are the legally required benefits required by VentaCare?

In this scenario, VentaCare is currently offering a very generous benefits package to its employees, including federally mandated benefits that all employers must offer, and discretionary benefits that VentaCare elects to include as an incentive to attract the most qualified staff. Legally required benefits include programs like Medicare, Social Security, and Workman's Compensation, which employers of every size must provide to their employees. Due to the fact that VentaCare employs more than 50 permanent staff members, in this case a total of 250, federal law also requires the company to provide unpaid family vacation time and medical leave benefits, pursuant to the Family and Medical Leave Act (FMLA) of 1993. While the granting of vacation, holiday, and sick days is mandatory, VentaCare goes above and beyond the letter of the law by paying employees during these designated leave days.

Aside from these requirements, VentaCare also provides an array of discretionary benefits to entice the most experienced applicants to work for the company. Among the many discretionary benefits provided by VentaCare are its short-term and long-term disability insurance and life insurance for which the company pays the full premium, the provision of a tuition reimbursement for employees seeking to improve their education, its monthly health and wellness lunches, and its full-service Employee Assistance Program.

2.) How should Allison approach evaluating VentaCare's benefit program?

Allison must remain vigilant during the painful process of cutting costs through the elimination of employee benefits, realizing that in this time of worldwide recession, struggling companies like VentaCare simply cannot afford to spend lavishly on their employees for the foreseeable future. The federal spending cuts that have severely impacted VentaCare's bottom line will not be rescinded until the budget deficit, debt ceiling, and sequester crises are resolved, and with at the current rate of political progress in Congress, the loss of financial support may as well be considered permanent. To that end, Allison should be exacting in her appraisal process, forgoing any concern over individual employee grievances in order to focus fully on returning VentaCare to economic viability.

3.) What are some benefits Allison should consider changing or eliminating? Why?