Question & Answer: Employers of all sizes and in a variety of industries have made changes in their benefits…..

Employers of all sizes and in a variety of industries have made changes in their benefits programs to deal with rising costs. How FedEx Corporation, a worldwide transportation and

shipping firm, responded to the cost pressures resulted in the firm receiving the Optimas award

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Question & Answer: Employers of all sizes and in a variety of industries have made changes in their benefits…..
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from Workforce Management magazine. The decisions made by FedEx provide some insights on approaches that other employers may wish to consider.

For years FedEx offered health-care benefits only through managed care programs such as HMOs and PPOs. But beginning in 2004, FedEx established a program that allows employees to use health-care providers inside or outside of the designated network of providers. Employees

who want “freedom of choice” have the higher co-payment and payroll deduction. Also, FedEx

expanded its health benefits plan to have four different levels of coverage, so that employees can choose a benefits package that fits their needs and their personal budgets.

But FedEx does not just provide health-care benefits; it also has established services to help employees improve their overall health. Many FedEx locations have wellness centers. Because many FedEx employees lift boxes and packages, the firm established a lower-back pain program to help reduce back injuries. For employees with chronic health problems such as arthritis, asthma, and diabetes, there is a disease management program to give them guidance, which also reduces their use of health-care services. A telephone hotline staffed by nurses is available around the clock for employees to call with health-related questions.

FedEx uses a variety of means to communicate benefits information, including an internal

TV network that features a variety of health-related programs. Employees can also access information electronically or contact a benefits call center.

Overall, FedEx employees have responded positively to these health-related efforts,   despite increases in their payroll deductions for health benefits. It is likely that FedEx will have to

keep making changes in its benefits because of increasing health-care costs. But through planning, continuing communication, and education, FedEx will likely continue delivering its healthcare benefits to meet both the company’s and the employees’ needs.

1. Why is having multiple health-care plans important for FedEx in slowing down increases in the cost of benefits?

Expert Answer


The multiple health care plans are important for FedEx in controlling the cost of benefits being provided by the company as it has a large number of employees spread across various geographical locations. The different healthcare packages are designed and bought according to need and budget of the employees of different organizational and geographical position. The firm also offer wellness programs and disease control to ensure that the firm has to bear low costs for the health insurance of its employees thereby decreasing the costs for the firm. The firm also allows the employees to choose their own health programs to decrease the costs borne by the company.

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