Yama Yapa is a manufacturer of premium parachute components, located in Ann Arbor , Michigan. Yama Yapa has been in business for 38 years and has been successful in most years. 2020 COVID 19 pandemic has helped their business grow and, despite some minor setbacks, the growth has continued in 2021. As an outdoor activity that can be done locally and requires social distancing, skydiving has increased in popularity. The older population has been attacking bucket list items more aggressively during the pandemic, and younger people are looking for a thrill that a Zoom meeting cannot provide. Yama Yapa's leadership has strong expertise in supply chain management and has been able to deliver its products to its customers without major disruption. This advantage has helped Yama Yapa maintain deliveries to customers during a period when many of their competitors have had trouble with consistent product delivery. The result has been an increased demand for Yama Yapas quality products. Yama Yapa has usually been growth-contained by a lack of available workers due to low unemployment. The beginning of the pandemic increased the opportunity to hire more workers and Yama Yapa took advantage of the opportunity in 2020. Despite the great resignation of 2021, Yama Yapa has generally maintained their increased level of workers. At the end of 2019, Yama Yapa had 300 full-time employees and by the end of September 2021, the company has 475 full-time employees. This staff increase has allowed Yama Yapa to double its production and do so without costly infrastructure changes. More of their non-production workers have been able to work remotely. While there have been some upgrades to the facility (primarily to ensure social distancing and worker safety), the main change has been in adding a second shift. Yama Yapa hasnt had any problems filling the second shift because even some long-term employees were looking to change their hours in order to accommodate their kids attending school remotely during the pandemic. They have increased their shift differential pay during 2021 to maintain appropriate staffing levels for the second shift. Before the pandemic, Yama Yapa leadership had strategically determined that the market for their products was growing. The Yama Yapa leadership foresees the need to continue to maintain its larger workforce post pandemic but is concerned about retaining workers and attracting new workers with low unemployment in the area and increased competition for workers.

As a smaller business, Yama Yapa has provided health insurance, long-term disability insurance, and life insurance to their full-time employees. The Yama Yapa leadership knows it needs help with its benefits strategy, so it wants to retain you to advise them on welfare benefits plans. Yamas top priorities are to retain employees and to continue to attract new employees. Yama Yapa also wants to continue to make money.

Part A (worth 20 points) Ripcords current health plan is an insured preferred provider organization (PPO) plan with a $1000 single annual deductible and a $2500 family annual deductible. Ripcord shares the premium costs with their employees. Ripcord pays 82% of the single premium costs and 73% of the family premium costs. The renewal premium rates (annual) for 2022 are $8150 (single) and $23,750 (family). The family rate includes the cost of single coverage. These rates represent a 10% increase over the current plan premium costs. The current demographics for the health plan for the 475 full-time employees are: 56% of workers have families 255 employees have family coverage under Ripcords health plan 44% of workers are single 189 employees have single coverage under Ripcords health plan Approximately one-third of the total full-time workforce is over the age of 50 (159 employees)

1. Keeping the current PPO health plan for 2022 and sharing the 10% cost increase with the employees. The company will cover 35% of the increase and the employees will be responsible for 65% of the increase.

What would happen if Yama Yapa's leadership team implemented this plan?