1
Q
Employee Benefits
A
- are nonwage compensation or rewards given to employees (indirect compensation)
- Employee Benefits focus on employees’ health and wellness.
- The combined value of direct and indirect compensation is referred to as Total Compensation.
- Safety programs important for employee and company well-being
2
Q
Benefits and Safety Programs
A
- Benefits can cost employers anywhere from 18% to 26% or even higher of a worker’s base pay.
- When salary budgets are tight, or when the hiring market is competitive, providing better benefits than competitors can help organizations attract and retain top employees.
- Employees might incline to accept less wages in return for indirect compensations.
3
Q
Benefits and Safety Philosophy
A
- Benefits and safety programs should assess the organization’s various employee needs.
- They signal to employees the company values and support the mission and vision of the firm
- According to Maslow’s theory of motivation, individuals are motivated by five levels of needs. Starting with the lowest level and climbing to the highest, the needs are physiological, safety and security, belongingness, self-esteem, and self-actualization. Motivational theories such as this one help companies understand that employees all have some basic needs but that their needs differ.
4
Q
Mandatory Benefits:
A
benefits that should be provided as it is mandated by law
5
Q
Voluntary benefits
A
- benefits that an employer chooses to offer its employees without being required to do so. They could be further categorized under:
- Customary Benefits: are so commonly provided that employees view them as entitlement.
- Optional Benefits: provided at the discretion of the organization.
- Creative Benefits: some organizations offer benefits that are not common such as free food, bringing pets to work, oil change, dry cleaning service…etc.
6
Q
Mandatory Benefits
A
- Social Security
- Unemployment Insurance
- Workers’ Compensation Insurance
- Affordable Care Act and Employer Shared -
- Responsibility Provisions
- Family Medical Leave Act
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
7
Q
Social security act
A
- a social insurance act put into effect in 1937 and funded by employer and employee contributions to provide old age, survivors, disability and death benefits.
- Have to work for at least 10 years to receive full credit.
- The amount received is a percentage of the average lifetime earnings.
- Lower incomes workers receive higher percentage than higher income workers
8
Q
Old-Age, Survivors, and Disability Insurance Program (OASDI)
A
- Ensures continuous stream of income after retirement
- Covers dependents and survivors
- Covers disabled workers and their dependent
- OASDI is funded by payroll taxes (12.4% of salary shared equally by the employee and employer).
9
Q
Medicare
A
- the health insurance portion of Social Security for retiree age 65 or older and for disabled workers.
2. 9% of the workers total earnings
10
Q
Unemployment Insurance
A
- Created by the Social Security Act of 1935 and administered by the states, this program provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own.
- At most states, it is funded by unemployment tax that employers pay – where the rate is determined by each state
- Exceptions: Alaska, New Jersey and Pennsylvania – they collect taxes from employees to fund the program.
- Public employment offices pay out compensations
- Beneficiaries require to prove that they are actively seeking employment
- The payments are delivered typically up to 26 weeks (sometimes increased by the federal government)
11
Q
Workers Compensation
A
- a social insurance program that provides cash benefits and medical care to workers when they suffer injuries or illnesses related to their employment.
- It also provides survivor benefits to dependents of workers who die due to work-related injuries.
Workers who receive those benefits are not allowed to sue their employers for damages of any type. - At most states, all employers are required to offer such programs regardless of the number of employees.
- Medical care is paid directly after the injury occurs.
- After 3-7 days, workers are paid temporary disability or permanent disability.
- Other costs might include rehabilitation and training employees for other jobs.
12
Q
Affordable Care Act (ACA)
A
- Improving quality and lowering costs of healthcare
- Providing greater access to healthcare
- Providing new consumer protection
13
Q
Employer Shared Responsibility Provisions
A
- requirement under ACA for employers with the equivalent of 50 full-time employees to offer affordable health coverage to employees and their dependents, or be subject to an Employer Shared Responsibility payment under certain conditions.
14
Q
Coverage:
A
- Ended preexisting exclusions for children
- Requires employer health plans to cover young adults up to age 26 on parent’s plan
- Ends lifetime limits on coverage for all new health insurance plans
- Provides certain types of preventive care at no cost
- Limits administrative costs by insurance companies
15
Q
Family Medical Leave Act
A
- Most employers must provide employees up to 12 weeks of unpaid leave to care for family members
16
Q
COBRA health coverage
A
- A continuation of group health coverage for employees and qualified beneficiaries who might otherwise be ended when an employee experiences a qualifying event.
- 18 months of coverage.
- Qualifying events (Resignation or termination – other than gross misconduct, Hours reduction or uncovered leave of absence).
- Spouse can claim COBRA (Death, Divorce, Legal separation).
- Child can claim COBRA (Death, After 26 when the child is not a dependent).
17
Q
Voluntary Benefits primarily focus on
A
- Employee Health, Wellness, and Welfare
- Employee Life management
- Employee Retirement
18
Q
Examples of voluntary benefits include
A
- Healthcare Plans
- Dental and Vision Plans
- Wellness programs
- Employee Assistance Programs
19
Q
Premium
A
The monthly fee for your insurance.
20
Q
Deductible
A
How muchyoumust pay for carefirst, before your insurer pays.
21
Q
Co-pay
A
Your cost for routine services to which your deductible does not apply.
22
Q
Out-of-pocket maximum
A
Theabsolutemax you’ll pay annually.
23
Q
Co-insurance:
A
The percentage you must pay for careafteryou’ve met your deductible.
24
Q
Traditional health care plans:
A
- Fee-for-service (Premium)
- Employee pays deductible, and afterwards pays the copayment and coinsurance (usually 20%).
- Employees choose doctors.
- Usually expensive as compared to other plans.
25
Health Maintenance Organization (HMO)
- A type of managed care health insurance program that requires employees to designate a primary care physician and have any visits to a specialist referred by the primary care physician (gatekeeper).
- Often , it is limited in its geographical coverage and the HMO specifies the doctors and facilities that could be used.
- Usually have no or low deductible, lower copayments and out-of-pocket.
- Employers with 25 or more employees must give employees the opportunity to join a federally qualified HMO.
26
Preferred Provider Organization (PPO)
- A type of managed care program in which the employer negotiates with healthcare providers, usually in a network, for discounts and services for healthcare coverage for employees.
- No referral is required.
- If you use a doctor within the network you pay less copayment and if you choose a doctor out of network the copayment is higher.
- The premiums are usually higher than HMO.
- Employers save costs and employees have greater choice of doctors.
27
Point-of-Service (POS)
A hybrid of an HMO and a PPO where individuals can also receive treatment out-of-network but must pay a higher deductible.
28
Consumer-Driven Health Plan (CDHP)
- An alternative type of healthcare plan that puts more of the decision making under the control of employees by letting them choose
- whether they prefer a plan with a higher deductible or other more expensive alternatives
- how much to put into a savings plan for health
- which healthcare provider to use.
29
High-Deductible Health Plan (HDHP)
A type of managed-care health insurance plan that costs the employer and employees less per month because they require the employee to pay a high deductible; therefore the plan pays when the employee has a major medical problem.
30
Account-Based Health Plan (ABHP)
A consumer-driven plan that pairs a group health plan with a tax-advantaged medical spending account.
31
Health Savings Account (HSA)
A special account established through employers, banks, credit unions, insurance companies and other approved financial institutions into which an employee sets aside money pre-tax to help pay for his or her health care options.
32
Health Reimbursement Account (HRA)
- Account into which employers put money to reimburse employees for qualified medical expenses.
- Funds are accessible to employees when they leave the organization, but they are not transferable and cannot be withdrawn for retirement.
33
Self-funded plans
- The employer self-fund the healthcare plan and employ the services of a third party administrator to oversee the plan.
- It might save the firm costs, but will the funds be sufficient to cover all costs incurred?
34
Prescription drug benefits
- Tier 1: generic drugs
- Tier 2: formulary drugs that have a clinical advantage at a reasonable cost
- Tier 3: branded drugs that do not offer a cost or clinical advantage.
35
Vision and dental insurance
- Either offered as part of the healthcare plan or separate.
| - Both employers and employees usually contribute to the plan.
36
Employee wellness programs
- are initiatives designed to increase company performance or employee performance or morale through improved employee health.
- Examples: smoking cessation, weight loss management, fitness center memberships.
- Programs reduce injuries, lower healthcare costs, reduce absenteeism, improve employee morale and loyalty, improve productivity, reduce workers’ compensation and disability costs.
- Incentives reward employees for engaging in healthy behavior or for participating in wellness programs, which can improve the likelihood that employees will adopt healthier behaviors.
- Beware, that health information should only be used for assessment and not be used for employment decisions.
37
Employee Assistance Program (EAP)
- Designed to help employees deal with personal problems that reduce work productivity.
- May include attorney consultation, child-care and elder-care options, budget information, addiction recovery, family counseling.
38
Short-term disability plan
pays a specified portion of an employee’s salary when the employee is out of work for a limited time due to disability.
39
Long-term disability plan:
typically starts after a specified period of time (6-12 weeks) from the time of a disability and pays a portion of the employee’s salary until retirement age.
40
Accidental Death and Dismemberment (AD&D)
Designed to compensate employees for the loss of a body part or to compensate the employee’s family if an employee suffers the loss of a limb or dies accidentally at work.
41
Life management benefits
- Paid time off (PTO) (vacation, sick leave, bereavement leave, personal days, holidays)
- Educational assistance
- Child care and elder care
- Long-term care benefits (LTCI): insurance plans that provides assistance to aging, disabled and ill persons who need daily help with tasks such as dressing, eating, or bathing for an extended time period.
- Life insurance
- Financial planning
- Legal services
42
Employee Retirement Income and Security Act of 1974 (ERISA):
- a federal law that protects benefits for retirees in the private sector.
- Pension plans should be documented; what the benefits are, who is eligible to receive them and how the plans can be terminated.
43
Vesting
the time required before you own part or all of your retirement funds that the employer contributed.
44
Cliff Vesting
- employees are fully vested after three years of working for the employer.
- Employers might decide to vest before three years but not more.
45
Graded Vesting (phase-in plan)
- employees are fully vested after six years.
| - After the second year 20%, third year 40%, fourth year 60%, fifth year 80%, sixth year 100%.
46
Contributory plans
the employer and employee both put money into the retirement account.
47
Noncontributory plans
employers put funds into the employees’ retirement account without requiring the employee to contribute.
48
Pension Benefit Guaranty Corporation (PBGC):
a not-for-profit organization created by the federal government that insures defined benefit plans
49
Benefit Pension Plans
- Provides annuity to eligible employees upon retirement
- Usually pays out on formula:
Benefit = company % x years worked x salary (last year or average of previous years).
Example: A company offers $100 a month for each year of service = $3000 a month
- The more you stay with the organization, the more is your pension.
- Organizations need to manage their funds to ensure their availability.
50
Contribution Plans
- Employer specifies where money is deposited
| - Employee often has power to decide how to invest her/his funds within the employer’s plan
51
401(k) plans
- allows the employee to defer receiving some of their compensation until retirement with contributions to the plan taken out of their paycheck pretax and the funds accumulating tax free until retirement.
- In 2014, the limit was $17,500
52
Cash balance plans
employer credits the participants retirement account with a pay credit and an interest credit and the employer bears the risk; upon retirement or leaving the organization, the employee is entitled to receive the balance.
53
Pension Protection Act of 2006
- Act passed in 2006 and designed to Strengthen the US pension system through tightening rules
- Relative to employer responsibilities for funding pension accounts
- Administering and terminating pension funds
54
Benefits Administration
- Adequately and effectively communicate benefits, wellness and safety programs.
- Provide detailed listing of how much the benefits are costing the organization in order to highlight the total rewards package
- Decide on who will receive which benefit, how much the employer and the employee will contribute and how much choice is given to employees among alternatives
- Consider having flexible benefit plans to address various employee needs.
- Flexible benefit plans (cafeteria plans) allows employees to choose which benefits they want to purchase from a menu of benefits.
55
Occupational Safety and Health Act of 1971 (OSH Act)
- Requires employers to provide safe workplace for all employees
- Provides process for investigation of complaints of unfair practices
- Provides process for workplace inspections
56
Occupational Safety and Health Administration (OSH Administration)
- Sets and enforces protective workplace safety and health standards and guidelines.
- Provide information, training, outreach programs, compliance assistance.
- Develop partnerships with employers.
57
OSHA compliance officers/inspectors:
- Have the right to inspect business
- Can issue citations, listing the type of violation, the financial penalty, and the time period within which the violation should be corrected.
58
Inspection priorities
- Imminently dangerous situations
- Fatalities and catastrophes resulting in three or more employees being hospitalized
- Employee complaints about unsafe or unhealthy work conditions
- Referral of hazard information
- Following ups
- Planned or programmed investigations
59
Strategic Partnership Programs
develop written, signed agreement to work together to address critical safety and health issues and to measure the results.
60
Voluntary Protection Programs
focuses on establishing a cooperative relationship with companies that have comprehensive safety and health programs. (recognizing outstanding efforts of such companies)
61
Consultation
help employers to establish workplace safety and health programs.
62
Workplace violence
any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior occurring at the workplace
63
Ergonomics
- the science of understanding the capabilities of humans in terms of their work requirements.
- The aim is to design the work environment to reduce the physical and psychological demands place on employees.
- Factors including lightning, furniture, equipment layout, lifting or moving objects, vibration, temperature…etc. should be studied to maximize comfort and performance.
64
Muscular-skeletal disorders
are the skeleton and muscle injuries that occur when the same muscles are used to perform tasks repetitively.
Human Resource Management
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