BUSMHR 3200 (Noe Ch.14, Benefits)

The Affordable Care Act

- Goal is to expand coverage, control health care costs, and improve the systems used to deliver health care

money purchase plan

-employer specifies a level of annual contributions, contributions is invested, when employee retires receive amt of contribution plus investment earnings

Define contribution plans include

-money purchase plan -profit sharing and employee stock ownership plan -section 401 (k) plan

Optional Benefits

1) Medical Care 2) Life Insurance 3) Retirement Plans 4) Paid Leave (Vacations, holidays, sick leave)

4 requirements for receiving unemployment insurance

1) proof of employment (usually work more than 52 weeks) 2) they are available for work 3)actively seeking work 4) not discharged for a cause, did not quit, not out of work due to labor dispute

worker's comp. benefits 4 categories

1)disability income 2) medical care 3) death benefits 4) rehabilitation

Benefits required by law

1. Social Security 2. Unemployment insurance 3. Workers' compensation insurance 4. Family and medical leave 5. Health care

4 objectives to minimize the hardships of unemployment (Unemployment Insurance)

1. provides payments to offset lost income during involuntary unemployment 2. helps unemployed workers find new jobs 3. payment of unemployment insurance taxes gives employers an incentive to stabilize employment 4. providing workers with income during short term layoffs preserves investments in worker skills bc workers can afford to wait to return to their employer rather than start over with another org

What year was social security initially created?

1935

Cafetaria-Style Plan

A benefits plan that offers employees set of alternatives from which they can choose the types and amounts of benefits they want

Preferred Provider Organization (PPO)

A health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers

Health Maintenance Organization (HMO)

A health care plan that requires patients to receive their medical care form the HMO's health care professionals, who are often paid a flat salary, and provides all services on a prepaid basis

Employee Wellness Program (EWP)

A set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks

IRAs (Individual Retirement Accounts)

An IRA is an account set up at a financial institution that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis

Employee Benefits

Compensation in forms other than cash

Flexible Spending Account

Employee-controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year

Pension Benefit Guarantee Corporation (PBGC)

Federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences fiscal difficulties

Family and medical leave

Federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption, to care for a seriously ill family member or for an employee's own serious illness; or to take care urgent needs that arise when a spouse, child, or parent in the national guard or reserve is called to active duty.

Employee Retirement Income Security Act (ERISA)

Federal law that increases the responsibility of pension plan trustees to protect retires, established certain rights related to vesting(earing a right to receive the pension) and portability (being able to move retirement savings after changing employers), an created the Pension Benefit Guarantee Corporation

Consolidated Omnibus Buget Reconciliation Act (COBRA)

Federal law that requires employers to permit employees or their dependants to extend their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours, or the employee's death

Vesting Rights

Guarantee that when employees become participants in a pension plan and work a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer

Patient Protection and affordable care act

Health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit (require med. to large size company to offer health insurance or pay penalty starting 2015)

Long-term disability insurance

Insurance that pays a percentage of a disabled employee's salary after an initial period and potentially for the rest of the employee's life

Short-term disability Insurance

Insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less

Insurance benefit

No income tax, so ppl get more "bang for their buck"

Social Security is also known as...

Old Age, Survivors, Disability, and Health Insurance (OASDHI) program covers 90% of US employees exceptions are railroad and federal, state, and local government employees, who often have their own plans.

Defined-Benefit Plan

Pension plan that guarantees a specified level of retirement income (amt. usually calculated by years of service, age, and earning level)

Summary Plan Description (SPD)

Report that describes a pension plan's funding, eligibility requirements, risks, and other details

Contributory Plan

Retirement plan funded by contributions form the employer and employee

Noncontributory Plan

Retirement plan funded entirely by contributions from the employer

Cash Balance Plan

Retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predefined rate

Defined-Contrbution Plan

Retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account

Workers' Compensation

State programs that provide benefits to workers who suffer work-realer injuries or illness, or to their survivors

Technically federal government left it to....

States discretion to establish h an unemployment insurance program at same time social security act created tax incentive that quickly led every state to establish program

Social Security

The federal old age, survivors, disability and health insurance program, which combines old age insurance, survivors insurance, hospital insurance, and supplementary medical insurance for the elderly (if they begin receiving benefits at retirement age they get full amount, if they elect to begin at 62 will get benefits at permanently reduced rates)

Experience Rating

The number of employees a company has laid off in the past and the cost of providing them with unemployment benefits

Along with OASDHI... the social security act of 1935 establish a program called

Unemployment Insurance

Unemployment Insurance

a federally mandated program to minimize the hardships of unemployed workers, help in finding new jobs, and incentives to stabilize employment

benefits

attract, retain and motivate employees

Benefits contribute to...

attracting, retaining, and motivating employees variety of possible benefits also helps employers tailor their compensation the kinds of employees they need

Employers need to examine their ________ package regularly to see whether they meet the needs of today

benefits

exempt amount

benefits may be reduced if the worker is still earning wages above the maximum

Benefits are more _________ than pay

complex harder for employees to understand and appreciate (employers need to communicate effectively so benefits succeed in motivating employees)

Traditional IRA

contributions are tax deductible on both state and federal tax returns for the year you make the contribution, while withdrawals in retirement are taxed at ordinary income tax rates.

401 (k)

employees contribute a percentage of their earnings, employers may make a matching contribution. (earnings contributed to plan is not taxed- gov't puts a limit on how much you can contribute per year)

Americans w/ Disability Act ( ADA)

employees w/ disabilities must have "equal access to whatever health insurance coverage the employer provides other employees)

Age Discrimination in Employment Act (ADEA)

employer must take care not to discriminate against those that are over 40

Employee benefit examples

employer paid health insurance retirement savings plans paid vacations

How the heck social security actually works....

meet eligibility requirement according to age and earning history.. if elect to begin receiving benefits at full retirement age, they receive full benefits orrrr if they elect to begin receiving benefits at age 62 they receive benefits at a permanently reduced level full retirement is 67 government increases the payments each year according to the growth in the consumer price index

Consumer-driven Health Plan (CDHP)

provide health coverage in a way that gets employees involved as consumers making decision to lower costs. 1) insurance w/ high deductible 2)medical savings account in which employer contributes to employee controlled accounts for paying expenses below the deductible 3) health care education to help improve health

Roth IRA

provide no tax break for contributions, but earnings and withdrawals are generally tax-free.