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How employee benefits in the defense industry can survive sequestration

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“Sequestration” was the buzzword of the “fiscal cliff” discussion. In its simplest form, the term refers to across-the-board spending cuts in response to the U.S. budget deficit. The cuts have had a significant impact on the defense industry, which makes controlling health insurance costs all the more critical.

With the outsourcing of military-related services, such as housing, food and security, sequestration affects smaller private companies, as well as giant defense contractors.

Are you a contractor for the defense industry? How do you tackle health insurance with sequestration hanging over your head? Like any formidable challenge, the answer lies in long-term strategy.

Saving employee benefits

The deal Congress struck at the beginning of the year may have temporarily taken a step back from the fiscal cliff, but it left the defense industry teetering. Now defense contractors have to be strategic in their planning for an uncertain future with an uncertain budget. A July 2012 hearing by the House Armed Services Committee heard the worst-case scenario from defense contractors:

…If the across-the-board cuts are implemented, significant layoffs will occur, costs will go up, and contracts will be challenged and may be terminated.”

Impending sequestration could soon force defense industries to cut hiring and send layoff warning, September 14, 2012, American Society of Military Comptrollers

Long-term health care cost-containment strategy prepares for the expected and unexpected -- even during sequestration. Integral to the discussion is the impact of the Patient Protection and Affordability Act (PPACA) on the defense contractor’s employee benefits health plan.

The core health care cost-containment strategy remains the same for all industries:

1. Optimize PPACA with a multi-year strategy.

2. Integrate a comprehensive approach to wellness.

3. Create an environment that cultivates employee engagement and accountability.

Partnering with the right team -- one that has the employee benefits resources for mapping strategy -- is the employer’s best defense. Health insurance partners with predictive modeling capabilities for testing best- and worst-case scenarios offer the flexibility to adjust to whatever fiscal challenges occur.

Managing employee benefit spend under sequestration is challenging, but tactical preparation and the right partnership protect your company in an uncertain future.

Surviving the storm

Challenges in managing health insurance costs exist in all industries. The Perfect Storm Survival Guide, found at IntercareSolutions.com/SurvivalGuide, shares ideas for creating long-term management strategies. This free eBook discusses how a company can navigate this storm in health insurance. In this survival guide, you will learn how to:

*Optimize health care reform's employer requirements.

*Integrate wellness strategies to reduce cost.

*Create consumer accountability.

Delaying preparation leaves little time to react, which can prove costly. Download The Perfect Storm Survival Guide now at IntercareSolutions.com/SurvivalGuide, to be ready for what the future might bring.



-Submitted by Linda Keller, executive vice president of consulting and account management, Intercare Insurance Solutions.

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