Rewards system managment Exam 4

Reasons U.S. employers rely more on the contingent workforce

Economic recessions: giving the lower predictability of the economy, rather than restaffing with core employees after economic downturns, companies are restaffing with contingent workers. This provides employers with better control over expenses as the economy shifts

Which of the following is NOT currently considered a discretionary benefit?

Employee assistance programs

Which of the following is associalted with 401(k) plans?

Employees do not pay taxes on their contributions

Employee Retirement Income Security Act of 1974 (ERISA)

Implemented to govern various benefit programs, including medical, life, and disability programs, as well as pension programs. It's designed to protect employee benefits rights

Family and medical leave

Provides for up to 12 weeks of unpaid leave in a 12-month period for reasons related to the birth of a child, serious medical conditions of a close family member, or serious medical conditions for oneself.

Old Age, Survivor, and Disability Insurance programs

Provides retirement income, survivors benefits (1939 amendment), disability insurance and Medicare (1965 amendment)

Which of the following statements is NOT true about temporary workers?

Temporary workers are often hired for special skills for a specified contract period

Unemployment Insurance

The Social Security Act founded a national-state unemployment insurance program for those that are unemployed through no fault of their own (layoffs, downsizing, etc.)

Managed Care Approach

The emphasis here is on cost control Done using health maintenance organizations (HMO), preferred provider organizations (PPO), and point of service (POS) plans.

When is comes to workers compensation, who is responsible for temporary employees?

The temporary agency or the client depending on the contract

Internal Revenue Code

These are the tax laws of the U.S. The IRS develops and implements these regulations. These codes govern a variety of tax incentives and penalties for organizations around retirement plans, among other benefits

Independent contractors, freelancers, and consultants (part of the gig economy)

These types of employees establish relationships with employers on their own rather than going through a temporary employment agency or leasing company. Usually independent contractors have special skills that companies need for special projects

Term life insurance

is the most common. These provide protection for a period of time (usually the max is 20 years) to a certain age (usually between 65-70)

International competition:

because of globalization, U.S. companies need to control costs to compete, and labor costs are some of the biggest costs, so using contingent workers helps control labor costs

Health Savings Accounts (HSA)

hold funds for medical expenses; can be funded by the employee (pre-tax) and the employer up to a specified limit, allow leftover funds to roll over year-to-year, but must be attached to a high-deductible insurance plan. Unlike FSA and HRA, these accounts are portable - they go with you wherever you are employed.

Paid time off

includes sick time and vacation days

Services

includes things like on site child care or child care supplements, tuition reimbursement

Transportation services:

this can be assistance with parking expenses, subsidies for using public transportation, etc

Protection programs

this includes disability plans, income protection plans, health and wellness plans, and retirement plans

Outplacement assistance:

used when employees are laid off to help them find new work

The latest of the legally required benefits is the PPACA of 2010,

which requires employers with 50 or more employees to provide health insurance options to their employees

Whole life plans

work much the same as term life plans, except that the plan does not expire until payment is made to beneficiaries.

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)

Allows employees to keep their employer-sponsored health plans for up to 18 months upon termination from employment. The plan typically is paid for in full by the employee.

POS

HMO with a wider network Patients pay slightly higher fees to go to those doctors outside of the HMO These types of plans are going away as PPO take over the market

Legally required benefits are expensive, so the best thing you can do as an employer is contain costs

Have safety plans in place Implement wellness programs to reduce medical costs Take advantage of self-insuring when financially justifiable

To contain costs, employers may:

Implement safety programs to reduce injury so workers comp claims are limited Implement health promotion programs to reduce medical claims Combine workers comp and health insurance (so called "24 hour" coverage) to reduce administrative expenses (this can be complicated) Hire smarter to avoid layoffs so unemployment insurance rates don't increase

HIPAA (Health Insurance Portability and Accountability Act of 1996)

Main provisions: Allows employees to continue health coverage with no provisions for pre-existing conditions when changing employers Protects how patient information is used, stored, and transferred

Minimum requirements for using FMLA are:

Must work for a private employer or civilian unit of the Federal government with 50 or more employees Must have been employed at least 12 months by that employer Must have worked at least 1,250 hours during that 12 month period prior to making a request for leave.

PPO

Operates on the same premises as HMO, but designed to give patients more choices through a larger provider network

Groups of contingent workers

Part-time employees Temporary and on-call employees Leased employees Independent contractors, freelancers, and consultants

There are four categories of legally required benefits:

Social Security programs Worker compensation programs Unpaid family and medical leave Health insurance

Compressed Workweek Schedules

These schedules reduce the number of days workers come, but compresses the same amount of weekly time into fewer days Typically done on a 4 day work week, with 10 hours per day Reduces commuting times for employees, and provides more time at home for families

Telecommuting

Uses technology to allow employees to work from remote locations, typically home. Most appropriate for work that does not require regular person-to-person interactions Most employees have to come into the office on some specified days, but work remotely other days

Flextime schedules

With flextime schedules, employers set up a set of limits around which employees work, and then employees decide during which hours they will work . Most employers designates some core hours in which all workers must be present This is not a reduction in hours, just flexibility of when the hours can be worked Flextime helps employees cover personal issues, and helps employers extend work days to cover more customers The two most common obstacles are overhead costs and coordinating work schedules

temporary workers are used to

fill in for core employees on extended periods of leave provide extra labor during seasonal peaks of business provides opportunities for employers to evaluate if their is a full time need for a particular position

Differentiate between seasonal workers and temporary workers

- Temp workers can be used anytime of the year - Seasonal workers work only in specified periods, like lifeguards or summer camp counselors - This matters because all temp workers are covered under the FLSA for minimum wage and overtime provisions, but not all seasonal workers are

Fee-for-Service plans

-Operate on the premise of reimbursing either the patient or medical provider directly for medical services rendered -These plans can be indemnity plans (provided by insurance companies) or self-funded (employer pays expenses) -These plans typically let you go to any doctor or hospital you want and require you to pay a deductible (part the employee is responsible for before the plan will reimburse) -After the deductible is met the plan operates on the basis of coinsurance; employee pays a small percentage of health care costs and the insurer pays the rest -Most fee-for-service plans have an out-of-pocket maximum - the most the insured will have to pay for all health care within a specified period -Insurers cannot limit coverage on the basis of pre-existing conditions (per the PPACA), nor can insurers limit the amount they will pay out over a period of time, or the insureds lifetime

Life insurance plans come in multiple forms. Which of the following are typical plan types?

-Term life plans -Universal life plans -Whole life plans

Discretionary benefits Pros:

-contribute to a company's competitive advantage through tax advantages and helping them recruit top talent -Managment uses to promote specific behavior -distinguish itself from the competition -Taking advantage of tax breaks helps reduce costs of benefits for employers

HMO

-similar to pre-paid medical services; as long as you receive health care from a medical provider within the network, you usually pay only a small copayment. -Services have a fixed amount, so medical providers will only get so much money for doing any particular procedure -Helps keep costs down as long as you stay in network - Requires a primary care physician to determine medical needs and refer to specialists when the need arises, keeping costs down

Medicare special features

1 Medicare Part A: Hospital insurance 2 Medicare Part B: Medical insurance 3 Medigap: voluntary supplemental insurance to cover what is not covered in Part A and B 4 Medicare Part C: Medicare advantage-provides choices in health care providers 5Medicare Part D: Prescription drug coverag

Pension Protection Act of 2006

Acts as an amendment to ERISA; strengthens employee rights in two ways: strengthens the financial condition of the Pension Benefit Guaranty Corporation, the body charged with insuring pension plans, by making it harder for employers to miss premium payments and providing tax breaks as incentives to shore up pensions Allows employers to enroll employees in defined contribution plans automatically (as the default) rather than to opt in, which increases participation, and makes it easier for companies to provide greater access to professional financial advisors; it also requires companies to offer multiple options to employees

direct hire arrangements

Companies may hire temp workers on their own, usually for not more than a year, but they then assume all responsibility for the employee

Self-inflicted wounds and disabilities due to chemical dependency are generally as what in most short-term disability insurance plans?

Exclusion provisions

John is offered to be an adjunct faculty for a semester to teach a statistics class in place of a professor who is on a sabbatical leave. This example represents which of the following?

Independent contractor

what is it called when Jack and Jill both work part-time to complete the duties of one full-time position?

Job sharing

Which type of contigent worker would work for a compnay on a long-term basis, presumably on a indefinite basis?

Leased employee

PPACA

Patient Protection and Affordable Care Act

Discretionary benefits cons:

Poorly designed programs, however, may undermine the objectives of the plan

Disability plans typically make you wait for some period of time b efore make claim on it , and wait some period of time after a disability before you can recieve benefits these are called

Pre-eligibility periods, elimination periods

Social Security Programs:

Three main programs: Unemployment insurance Old Age, Survivor, and Disability Insurance (OASDI) Medicare

Designing and Planning the Benefits Program

Who receives coverage? Financing Employee choice Cost containment Communication

Legally required benefits are NOT

a prime source of competitive advantage but may be a source of employee well being

Job sharing is

a special arrangement for part-time work; two individuals work part-time to fill the demands of one full-time position. They often coordinate their work.

Flexible spending accounts (FSA)

allow employees to put in a specified amount into an account pre-tax and then spend that money on health care expenses through the year

On-call arrangements

are another method of hiring temporary workers. These come to work as needed; they are called in by the employer and while they work the employer is fully responsible for the employee.

Health reimbursement accounts (HRA)

are funded by employers - not employees - and allow employees to spend for health care costs. Leftover funds carry over and these plans do not require an employee to have a high-deductible health plan

Defined contribution plans

are plans in which employees make regular contributions and employers may contribute as well

Discretionary benefits

are those offered at the will of the company management; they are not required

Contingent workers

are those workers that do not have an implicit or explicit contract for ongoing employment.

High cost employer sponsored plans are subject to a

cadillac tax

Universal life policies

combine the features of both term and whole life plans, and are more flexible than whole life policies

Family Assistance Programs:

designed to help employees provide elder and child care.

Tuition Reimbursement programs:

designed to help employees with education expenses

Medicare:

designed to provide insurance coverage for hospitalization, convalescent care, and major doctor bills for U.S. citizens age 65 or older.

The Social Security Act of 1935,

designed to provide some stability to workers through unemployment insurance, subsistence income to those injured on the job, and retirement income

For workers compensation purposes, the dual employer common law doctrine

establishes that temporary employees are workers of both the temp agency and the client, so the contract between the agency and client has to establish which entity will handle workers compensation

Financial education:

programs designed to help employees manage their finances more effectively, including short-term budgets and long-term (retirement) planning

Employee Assistance Programs (EAP)

programs designed to help employees with life issues, such as mental health counseling, financial issues, legal issues, etc.

Wellness programs:

programs designed to promote the physical, mental, psychological, and social well being of employees.