CH 13

ways to control cost of employer health care

Communication and empowerment (making the costs of medical benefits known) Employees paying higher premiums and co-pays Wellness programs Claim audits Limited plans Outsourcing Using defined contribution heath care plans

benefits Web sites

In addition to offering things like self-enrollment, one insurance company helps employees achieve better work life-balance.

Patient Protection and Affordable Care Act

Signed into law by President Obama in 2010, employers will face a number of deadlines

Pensions and early retirement

The company opens up (for a limited time only) the opportunity for employees to retire early with a financial incentive. This allows the employer to realize cost reductions, the ability to hire new employees (perhaps with newer skills at lower salary levels) or both.

subsidized employee transportation, food services, and educational subsidies.

The offer of time off as a performance reward, or increased vacation and holiday benefits can help employees with quality of life issues. Also, many companies are extending benefits coverage to same-sex domestic partners.

Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The privacy rules employers who provide health care services must follow

Preferred provider organizations (PPOs),

a cross between HMOs and the traditional doctor/patient arrangement, are groups of health care providers that contract to provide medical care services at a reduced fee.

Long-term care

a new benefit aimed at supporting people in their old age.

severance

a one-time payment when terminating an employee. Its considered a humanitarian gesture and good public relations. Most managers expect employees to give them one or two weeks' notice before they quit; so employers provide one or two weeks' severance if an employee is dismissed.

Other defined contribution plans include

a savings thrift plan (401k), a deferred profit sharing plan, and an employee stock ownership plan (ESOP) which is a tax-deductible stock bonus plan.

sick child benefits

alleviates unexpected absences due to last-minute child care emergencies, which are problematic for employers, who then need to hire temporary help or cope with reduced productivity

Pay for time not worked

also called supplemental pay benefits—is the most costly benefit, because of the large amount of time off that most employees receive

Hospitalization, health, and disability insurance benefits

are aimed at providing protection against hospitalization costs and loss of income arising from accidents or illness occurring from off-the-job causes. They are offered by most employers because medical care and insurance are so expensive.

Elder care programs

are being offered to help employees who must care for the elderly who may need such assistance.

Cash balance pension plans

are defined benefit plans for federal tax purposes, but have the portability advantages of defined contribution plans.

401(k) Plans

are popular defined contribution plans in which the employee can have pre-tax payments deducted from his or her paycheck and deposited in the account.

The costs of mental health treatment

are rising because of widespread drug and alcohol problems. More states are requiring employers to offer a minimum package of mental health benefits.

employee leasing firms

assume all or most of the employer's HR needs. The individual is employed by the leasing firm but costs are assumed by the organization that is using the leasing firm. Responsibilities such as performance and liabilities belong to the leasing firm.

The costs of insurance premiums

depend on the number and dollar amount of claims, thus minimizing such claims is important.

contribution plans V non contribution plans

employee contributes to the contributory pension plans while the employer makes all contributions to the non contributory pension plan

(FMLA) To help protect employers...

employees may be required to take any unused paid sick leave as part of the 12-week leave period.

defined benefit plans

employees pensions is specified or defined ahead of time. they know ahead of time the pension benefits he or she will receive take number of years worked into consideration

The Health Insurance Portability and Accountability Act (HIPAA)

enacted in 1996. It lets employers and employees deduct the cost of long-term care insurance premiums from their annual income taxes.

unemployment insurance or compensation acts

follow federal guidelines & provide for weekly benefits if a person is unable to work through no fault of their own. The benefits derive from an unemployment tax on employers that can range from 0.1% to 5% of taxable payroll in most states. An employer's unemployment tax rate reflects its rate of personnel terminations

Compressed workweeks

four 10-hour days, three 12-hour days, or other such combinations. The effectiveness may be questionable. Reviews indicate that they increase employee satisfaction and productivity. However, some critics are concerned that fatigue and accidents may increase. Ongoing measurement and tracking is the key here.

tracking sick days

generally considered a good idea. This enables the employer to manage their HR policies with respect to time off more effectively and efficiently.

Executive perquisites (perks)

include almost anything imaginable from a business perspective. It is thought they help maintain loyalty and commitment of top tier executives and managers and now are expected.

Personal services

include credit unions, legal services, counseling, and social and recreational opportunities.

Other flexible work arrangements

include job-sharing, work-sharing, and telecommuting.

wellness programs

include mammograms, immunizations, and routine checkups.

benefits

indirect financial and non financial payments employees receive for continuing their employment with the company

A health maintenance organization (HMO)

is a medical organization consisting of several specialists operating out of a community-based health care center.

Supplemental unemployment insurance

is also offered by some employers and is common in union contracts.

Flextime

is an arrangement allowing employees to have flexibility in scheduling their workday around core hours.

Subsidized child care

is an increasingly desirable benefit, which tends to improve recruiting results, lower absenteeism, improve morale, garner favorable publicity, and lower turnover.

BENELOGIC

is called the "Employee Benefit Electronic Service Tool." It lets users manage all aspects of benefits administration, including enrollment, plan descriptions, eligibility, and premium reconciliation, via their browsers.

Examples of perks

management loans, salary guarantees, protection if their firm becomes an acquisition target, financial counseling, relocation benefits, time off with pay, outplacement assistance, company cars, chauffeured limousines, security systems, and many others.

In developing pension plans, employers must consider

membership requirements, benefit formulas, plan funding, and vesting.

Job-sharing

occurs when two people share one full-time job. Such a program can be useful for retirement-aged employees, allowing the company to retain the experienced employee while allowing him or her to have reduced work hours.

life insurance

offered by most employers providing a bit of a security blanket for employees.

The Pension Benefit Guarantee Corporation (PBGC)

oversees and insures pensions should a plan terminate without sufficient funds. ERISA restricts what companies can, cannot, and must do in regards to pension plans.

Benefits can be classified by

pay for time not worked; insurance benefits; retirement benefits; and services.

retirement benefits

provide an income if you retire at age 62 or thereafter.

Employee Assistance Programs (EAPs)

provide employees with counseling and/or treatment for problems such as alcoholism, gambling, or stress. Its confidential from the company. The company receives only general statistics, such as the number of employees who used the service annually, from the outside EAP firm.

Parental leave and the Family and Medical Leave Act (FMLA)

provide equitable arrangements for employees who have legitimate needs to attend to family medical issues. Employers who have 50 or more employees must provide up to 12 weeks of unpaid leave for personal and family medical issues.

Pension plans

provide income to individuals in their retirement and just over half of full time workers participate in some type of pan EX: 401(k) plans, Other defined contribution plans, and Cash balance plans

Disability payments

provide monthly payments to employees who become totally disabled.

Survivor's (death) benefits

provide monthly payments to your dependents regardless of your age at death.

Vacations and holidays

provide opportunities for employees to balance their work and home lives but come at a cost to the employer vary between employers Not required be Federal laws, but employers must still formulate vacation policy with care.

unemployment insurance

provided by the federal government and administered by each state helps ease the burden on the unemployed while they seek work.

accidental death and dismemberment coverage VS disability insurance

provides a lump-sum benefit VS. provides income protection for loss of salary due to illness or accident.

sick leave

provides pay to employees when they're out of work due to illness. Most policies grant full pay for a specified number of permissible sick days. Some employers save expenses associated with employees using sick days to extend their vacations. They repurchase unused sick leave at the end of the year by paying their employees a daily equivalent sum for each sick leave day not used.

Social Security

provides three types of benefits: retirement benefits, survivor's (death) benefits, and disability payments. It also administers the Medicare program. Government programs.

Workplace flexibility

providing employees with technology so work can be accomplished wherever they are located.

(FMLA) Employees taking leave are entitled to

receive health benefits while they are on unpaid leave. In fact, for most health plans, taking individuals out of the group coverage then reestablishing them in the plan is either not allowed or extremely difficult and costly.

Workers' compensation

refers to the income and medical benefits provided in work-related accidents to the victims or their dependents, regardless of fault. It can be monetary or medical or a combination. Monetary awards are based on a formula regarding the disability involved and the worker's average weekly wages.

COBRA (Comprehensive Omnibus Budget Reconciliation Act)

requires most private employers to make continued health benefits available to terminated or retired employees and their families. The coverage is for the group program offered by the former employer but at a higher cost. That is, the terminated or retired employee may pay up to 102% of the total cost (what former employee paid and employer both paid plus up to 2% additional for administrative fees) for benefits. The coverage is good for a period of time, ~ 18 months.

Work-sharing

results when a group of employees reduce their hours to prevent layoffs. Finally, telecommuters work at home and use phones, computer software, and the Internet to conduct business.

ways to decrease cost of insurance premiums

screen out accident-prone workers, reduce accident-causing conditions, and institute effective safety and health programs. Many firms institute rehabilitation programs to get injured employees back on the job as fast as possible.

The Mental Health Parity Act of 1996

sets minimum mental health care benefits at the national level.

the Employee Retirement Income Security Act (ERISA)

sets minimum standards for health and pension plans.

Defined contribution plans

specify what contributions the employee and employer will make to the employee's retirement or savings fund. portable

Supplemental Unemployment Benefits

supplement the employee's unemployment compensation and help the person maintain his or her standard of living for a time. They are becoming more prevalent in union agreements.

cafeteria benefits plan

synonymous with a flexible benefits plan. Each employee is given a benefits fund budget to spend on whichever benefits he/she wants. EX some may prefer more healthcare benefits while others may prefer more time off. Employers limit the total cost for each benefits package.

(FMLA) employers must guarantee employees

the right to return to their previous or equivalent position with no loss of benefits.

The list of policy issues includes

what benefits to offer; who receives coverage; Decisions must be made whether to include retirees in the plan and whether to deny benefits to employees during initial "probationary" periods. how to finance benefits, cost-containment procedures, how to communicate benefits options to employees.

group life insurance plans

which usually accept all employees, regardless of health or physical condition.