FedEx Employee Healthcare Benefits: A Case Study

Introduction: Healthcare as an Employer Responsibility

Providing employees with adequate healthcare is one of the central challenges facing any responsible American corporation, given that health coverage in the United States is largely employer-provided. For many years, the FedEx Corporation offered healthcare packages through managed care programs such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). HMOs came under widespread criticism during the 1990s: their limited networks of providers, complex referral procedures, and frequent denial of care deemed "unnecessary" or experimental meant that individuals often had to pay out of pocket for treatments they needed or desired.

FedEx's Tiered Benefits Approach

FedEx is a large, diverse, internationally focused company. To meet the needs of its workforce — which encompasses young and older workers, those in physically demanding jobs and those in desk-based roles, and people in various life stages and states of health — the company recognized that there was no "one size fits all" health plan. Beginning in 2004, FedEx expanded its benefits programs and allowed its employees, for an increased fee, to use healthcare providers both inside and outside existing networks.

The company restructured its health benefits plan into four distinct levels of coverage. Employees who did not wish to spend heavily on healthcare — such as young, single workers — could select a lower-cost tier, while employees with young children, or those who were older and required more comprehensive care and prescription drug coverage, could opt for a more extensive and expensive plan. This flexible, employee-centered approach acknowledged the genuine diversity of workforce needs.

Wellness and Disease Management Initiatives

Because of the current state of healthcare in America, employee benefits packages are a critical element in attracting top talent to an organization. Employees managing chronic health conditions, or whose spouses lack independent coverage, may choose a FedEx career specifically because of the organization's provision of high-quality healthcare. FedEx followed the lead of other forward-thinking companies: Google, for example, was an early pioneer in health and wellness benefits, offering not only a wide array of coverage packages but also an on-site health clinic to reduce appointment wait times, along with fitness and wellness classes to support healthy lifestyles (Benefits, 2010, Google).

FedEx also strove to be a pioneer in wellness care, reasoning that well-supported employees would be less likely to become ill and less likely to cost the company money through sick days. Many FedEx employees perform physically demanding work — lifting boxes and packages — so an ergonomics and lower-back pain management program helps reduce injuries and enables high-quality employees to work productively over longer periods. This directly increases worker retention and reduces orientation and attrition costs.

For employees managing chronic conditions such as arthritis, asthma, and diabetes, FedEx offered a disease management program to provide guidance and support. The emphasis was placed on health improvement and wellness maintenance rather than simply treating illness after it occurs. Wellness promotion strategies reduce employee demand for high-cost healthcare services, improve productivity, and decrease sick days. Employees who feel that their employer genuinely cares about their well-being develop stronger loyalty to the organization. A worker who receives adequate support — including physical therapy and appropriate services during illness — is less likely to experience the additional stress of worrying about where and how to access care.

FedEx also offers a telephone hotline staffed by nurses around the clock, so that employees can call with health-related questions at any hour. As a service-based, delivery-oriented company that operates continuously — particularly during peak holiday periods — this initiative reflects a realistic understanding of employees' working lives and schedules.

Conclusion

It is also in FedEx's interest to encourage wellness, as this reduces sick days. Employees who exercise regularly and have their illnesses well managed are more alert, productive, and energized. Employee health literacy is supported through the nursing hotline and through providing clear, comprehensive information about benefits packages so that employees can select the plan most appropriate for their needs. The availability of the hotline also ensures that health concerns are addressed quickly: an employee who realizes after work hours that she needs an antibiotic, and is able to obtain a prescription by 8 p.m., is far more likely to report for her shift on time the following morning than one who must wait in line at a clinic at dawn.

FedEx's expansion of its healthcare policy was thus beneficial for both the company and its employees, and stands as a demonstration that employee and employer interests are not invariably at odds. When organizations invest thoughtfully in the health and well-being of their workforce, the returns — in loyalty, attendance, productivity, and talent retention — are substantial and measurable.

References

Benefits. (2010). U.S. jobs. Google. Retrieved August 2, 2010, from