HR Chapter 10

Which factors have resulted in high healthcare costs?

1. Aging population 2. Growing demand for medical care 3. Increasingly expensive medical technology 4. Inefficient administrative processes

COBRA of 1985

1. Consolidated Omnibus Budget Reconciliation Act 2. Enacted to give employees the opportunity to temporarily continue their coverage, which they would otherwise lose because of termination, layoff, or other changes in employment status. The act applies to employers with 20 or more employees. 3. Under COBRA, individuals may keep their coverage, as well as coverage for their spouses and dependents, for up to 18 months after their employment ceases. Certain qualifying events can extend this coverage for up to 36 months. The individual, however, must pay for this health insurance. Companies are permitted to charge COBRA beneficiaries a premium for continuation coverage of up to 102 percent of the cost of the coverage to the plan. The 2 percent markup reflects a charge for administering COBRA.

OWBPA of 1990

1. Older Workers Benefit Protection Act the 1990 2. amendment to the Age Discrimination in Employment Act 3. placed additional restrictions on employer benefits practices. When employers require employee contributions toward their benefits, under particular circumstances, employers can require older employees to pay more for health care, disability, or life insurance than younger employees because these benefits generally become more costly with age; older workers may be more likely to incur serious illnesses, thus, insurance companies may charge employers higher rates to provide coverage to older workers than younger ones. In addition, employers can legally reduce the coverage of older workers for benefits that may become more costly as they further age. Benefits that may meet this criterion include disability insurance, health insurance, and life insurance. The employer may reduce the coverage of these benefits only if the costs for providing insurance to them are significantly greater than the cost for younger workers and not simply assumed to be more expensive.

What type of retirement plan is 401(k)? What type of retirement plan is a pension? What is a cash balance plan?

1. These are employer-sponsored retirement plans 2. Cash Balance plan: combination between defined benefit and defined contribution. Provides all benefits a defined benefit would while showing an account balance like defined contribution would

What percentage of employer's total compensation costs do benefits represent?

30%

The age for receiving full social security retirement benefits is slowly increasing to how many years old?

67

Part time work?

Another option of a flexible work plan. Allows some employees to address both job and personal needs. In most cases they have to give up the benefits. The program is in response to Millennials demanding a better work-life balance and boomers looking to ease into retirement. Just described were the positive aspects of part-time. The recent recession caused many workers to take part-time jobs because they could not find full-time ones. In August 2013, the underemployed rate was 13.7 percent.

Compressed work week?

Any arrangement of work hours that permits employees to fulfill their work obligation in fewer days than the typical five-day workweek.

What is a customized benefit plan?

Benefit plan that permits employees to make yearly selections to largely determine their benefit package by choosing between taxable cash and numerous benefits.

Care Plans, Specialized Insurance Plans, and Consumer drive plans?

Care Plans = Medical Specialized = Dental, Vision, Prescription drug, etc

What are the characteristics of consumer driven health care (CDHP) plans? What is an HDHP? HSA?

Consumer-driven health care refers to the objective of helping companies maintain control over costs while also enabling employees to make greater choices about health care. This approach may enable employers to lower the cost of insurance premiums by selecting plans with higher employee deductiblesA High Deductible Health Plan (HDHP) is a health plan product that combines a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA), traditional medical coverage and a tax-advantaged way to help save for future medical expenses while providing flexibility and discretion over how you use your health care dollars today.Health Savings Account (HSA) is a tax-free health spending and savings account available to individuals and families who have qualified high-deductible health insurance policies as determined by IRS regulations

What are the advantages of a PTO bank?

Def.: Means of dealing with the problem of unscheduled absences by providing a certain number of days each year that employees can use for any purpose. Possible benefits from PTOs include simpler administration, fewer carryover issues, high employee satisfaction, fewer creative excuses for time off, earlier advance notice of time-off needs, fewer last-minute absences, and fewer conflicts about time-off usage.

What is disability insurance? Survivor's benefits? Medicare?

Disability: Insurance that protects employees against loss of earnings resulting from total incapacity. Survivor's benefits: provided to certain members of an employee's family when the employee dies. Medicare: provides hospital and medical insurance protection for individuals 65 and older.

What different types of employee services may be offered by an employer?

Employers may choose to offer one or more benefits such as child care, educational assistance, subsidized meals, and scholarships for dependents.

What expenses does workers compensation cover?

Entire cost of the worker's insurance

What are the differences between Fee-for-Service Plans, Managed

First, HMOs offer prepaid services, whereas fee-for-service plans operate on a reimbursement basis. Second, HMOs include the use of primary care physicians as a cost-control measure. Third, coinsurance rates are generally lower in HMO plans than in fee-for-service plans.

What is the most expensive item in an employee benefits package?

Health Insurance

What are the most common forms of managed care plans?

Health Maintenance Organization (HMO) & Preferred Provider Organization (PPO)

What are employee benefits?

Indirect Financial Compensation - All rewards not included in financial compensation such health insurance, life insurance, 401k, etc.

What are legally required benefits? Discretionary benefits?

Legally Required: Mandated by law examples: Health Care, Social security, unemployment Discretionary: PTO, Health Care, Life Insurance, 401K, Disability, Employee Stock Option Plans, Employee Services, Premium Pay

What is a flextime?

Practice of permitting employees to choose their own working hours, within certain limitations.

What is the intent of unemployment insurance?

Provides workers whose jobs have been terminated through no fault of their own monetary payments for up to 26 weeks or until they find a new job.

What different types of legally required benefits exist? Who pays for each?

Social Security: Retirement benefits program. Unemployment: Protects employees who lost their job through uncontrollable factors. States pay for the benefits and the government pays the states for administrative costs. Workers Comp: Provides financial protection for employees who incur expenses resulting from job related accidents or illnesses. Employers pay the entire cost of workers' compensation insurance.

Two-In-a Box?

Some companies are giving two executives the same responsibilities and the same title and letting them decide how the work is to be divided (Two-in-a-Box).

HIPPA of 1996

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 provides protection for Americans who move from one job to another, who are self-employed, or who have preexisting medical conditions. The prime objective of this legislation is to make health insurance. portable and continuous for employees and to eliminate the ability of insurance companies to reject coverage for individuals because of a pre-existing condition. As an element of HIPAA, there is now a regulation designed to protect the privacy of personal health information.

PPACA of 2010

The Patient Protection and Affordable Care Act of 2010, often called the "Health Care Reform Bill" or "Obama Care," created considerable political debate because it effectively reshaped major portions of the healthcare industry in the United States.51 The act is based on the idea that when more people have health insurance—young, healthy people in addition to older, sicker people—risk will be spread out and costs will come down. Following are some of the major features of the bill: 1. All individuals are required to have health insurance coverage if they do not receive health coverage through their employer. Those who choose not to have insurance will pay a penalty. 2. Employers are required to offer employees affordable health insurance or pay a penalty. Coverage is considered excessive if an employee premium contribution is above 9.5 percent of family income. To handle this situation, some companies are considering offering wage-based premiums where lower-wage earners pay less than those who are more highly paid.52 3. Children can stay on their parents' policy until they are 26. 4. Insurance companies cannot cancel a policy if the insured gets sick. 5. A person cannot be denied insurance simply because of a pre-existing condition. 6. There is no maximum limit on insurance coverage. 7. There is no waiting time with regard to coverage for pre-existing conditions.

What are the different types of paid time off?

There are a variety of paid time off benefits such as vacation, sick leave, and sabbatical leave as examples.

Job sharing?

Two part-time people split the duties of one job in some agreed-on manner and are paid according to their contributions.

What is the difference between defined benefit and contribution

a defined benefit: Retirement plan that provides the participant with a fixed benefit on retirement. defined contribution: Retirement plan that requires specific contributions by an employee or an employer to a retirement or savings fund established for the employee. and hybrid retirement plans? Two standard designs are defined benefit plans and defined contribution plans. The former pays a monthly benefit throughout retirement. The latter is a tax-preferred savings account from which money may be drawn during retirement. Hybrid plans combine the features of both.