Lesikar's Business Communication: Connecting in a Digital World 13th Edition by Kathryn Rentz,Paula Lentz

Exercise 2

You work in human resources for Henderson, Xiong, and Pirelli, LLC, an accounting and financial services firm. The company offers both single-person and family health insurance coverage to its 150 employees. Seventeen percent of the employees do not take the health insurance benefit. If an employee declines health insurance upon employment, he or she forfeits the benefit-no other benefits are offered in its place.
Last week you hired Mike Richards. You sent him the standard paperwork that all new hires complete. When Mike stopped by today to submit his paperwork, he said that he had turned down the health insurance, as he has health insurance coverage through his spouse. In telling you this, he mentions that his spouse's company offers an annuity the equivalent of a single-person premium as an alternative benefit for employees who decline the health insurance, and he wants to know if Henderson, Xiong, and Pirelli will do the same for him. The cost of a single-person premium per month is $435.
You present the idea to your boss, who initially says "absolutely not" but then decides that you should research the issue first. What are the advantages and disadvantages for the employee and for the company? How much will this potentially cost if other employees choose an annuity over health insurance? What if the cost of a single-person premium increases? Can you go back? That is, can you decide to discontinue this benefit at any time? Present your research in a report so your boss can make an informed decision.