Express is in a position where it can't drop health insurance. 85-90% of AGFS wage employees are part-time, 30% of DGO are part-time. The part-timers take the working conditions for one reason and one reason alone - the health insurance. If Express were to drop health insurance just for the part-time employees, they couldn't keep a part-time work force that would do the job. I'd be gone in a minute if the health insurance for part-timers was discontinued - as would practically every other part-timer.
The other variable in the mix is that FedEx is self funded for its health insurance. The demographics that make up the part-time work force are much younger than the national average, in better health and are usually just starting families. The cost to Express to cover this demographic is considerably less than the national average per capita. So by being self funded, Express is able to pay for coverage that amounts to routine doctors visits and the occasional condition which may reqire hospital admission. There are definately employees that have children with chronic medical conditions, but even here it tends to be less than the national average per family.
This was actually an element of the push for the health legislation. To force younger, more healthy Americans to pay into an insurance pool to enable less healthy Americans to purchase insurance at the same rates and cover everyone at the same time. However there is a fundamental flaw (besides its unconstitutionality). If auto insurance rates were set without regard to individual risk assessment, the poor drivers would snap up the insurance while the safe drivers would go without. Cost isn't apportioned according to risk under this model. Health care isn't a "right", it is a service and insurance for that service is priced according to risk. No matter how one calls it, what was done was socialization of health care by stealth means. If the courts don't toss out the legislation, it will be repealed eventually. With all of the unfunded liabilites the Federal government is currently facing, taking on this liability would make the Federal government insolvent in about 15 years time between the cost of health care and social security payments.
I haven't taken a look at Express' financials on medical claims payments for over a year, but the per employee pay out is considerably less than the national average and less than what a major insurance company would charge on a capitation rate if they assumed the medical claims liability for a flat fee per employee covered. Now if Express employed a bunch of 40 to 60 year olds as its typical employee, then they'd be looking to drop coverage anyway they could.
Given that Express wants to go more and more to a part-time work force, don't look for the health insurance to be dropped, look for the premium charged to the employee for coverage to go up and up. I'm justing waiting for the ball to drop for what the premium increases for 2011 will be - both monthly and per visit charges.
