Chapter 11

Communicating Benefits

1. Employees unaware or undervalue employee benefits received 2. Need to communicate to employees value of such benefits 3. Effective communication should: create awareness, provide understanding, encourage wise use of benefits. 4. Communicating benefits information: Brochures convey "big picture", small meetings with new hires, meeting with benefits counselors, personal benefits statement, updates on changes 5. Intranet and Web - useful in communicating benefits information

Paying for Benefits Programs

1. Noncontributory - company pays for all discretionary benefits 2. Contributory - company and employee share costs 3. Employee-financed - employee pays all costs

Financing OASDI and Medicare

1. Requires equal employer and employee contributions under Federal Insurance Contributions Act (FICA) 2. Employees tax bases on earnings withheld from paycheck 3. Social Security now taking in more money that it pays out 4. In 2011, the OASDI tax rate is 4.2% for employees and 10.4% for self-employed workers.

Claims under workers compensation programs

1. injury-lifting 2. Occupational diseases-asbestosis 3. Death claims

Family Medical Leave Act

1993; Requires employers with 50 or more workers to grant up to 12 weeks of unpaid leave a year to allow workers to take time off to help care for a new baby or an ill family member without fear of losing their jobs.

Unemployment Insurance

A joint state-federal program under which state-administered funds pay a weekly benefit for a limited time to eligible workers when they are involuntarily unemployed.

Medigap Insurance

An insurance plan offered by a federally approved private insurance carrier designed to supplement Medicare coverage. (Part A & B)

Medicare Part C

Commonly referred to as Medicare advantage plans. These plans are approved by Medicare and are run by private companies. Balanced Budget Act of 1997. Alternatives to Part A & B. Allows chance to receive care from a variety of options.

Social Security Act of 1935

Created Social Security System still in use today, which provides old age benefits for retirees, disability, and survivor benefits for spouses and children. Also created Aid to Families with Dependent Children (AFDC), which was the welfare system until 1996, and unemployment insurance.

State Compulsory Disability Laws

Employer provide income and medical benefits to work-accident victims or dependents regardless of fault. Based on principle of "liability without fault". Run by States.

Recent trends in workers' compensation

Number and amount have increase, increase in repetitive strain injuries, compensation is 19% of all legally required benefits for all civilian employees

OASDI

Old Age, Survivors, and Disability Insurance. Retired workers must: be at least 62 to receive reduced benefits, be at least 66 to receive full benefits. born 1960 or later.

Employers' rights under workers' compensation

Participation in workers compensation programs protect employers. 4 exceptions: Employers deliberate intent to harm or violations of affirmative duty, Employer retaliation for filing workers compensation claim, non-complying employers, and lawsuits relating to dual capacity relationships.

HR manager minimize legally required benefits cots by:

Reduce likelihood of workers comp claims, and reduce cost for unemployment insurance - monitor reason co. terminates workers; avoid termination leading to unemployment insurance claims.

Medicare Part A

The part of the Medicare program that pays for hospitalization, care in a skilled nursing facility, home health care, and hospice care.

Disability Benefits

These benefits are paid to workers and eligible dependents under full retirement age if they have a clinically determinable physical or psychiatric impairment that prevents them from working for at least 5 months and is expected to continue for at least 12 months or result in death. Waiting period up to 6 months.

Midicare

US citizens at least 65. five separate plans: 1. Medicare Part A-hospital insurance 2. Medicare Part B-medical insurance 3. Medigap-supplemental insurance not covered in 1 and 2 4. Medicare Part C-choices in health care provides such as HMOs, PPOs 5. Medicare Part D-prescription drug coverage

Criteria for Unemplyment

Varies, but duration of pay 12-18 weeks, must not have left voluntarily or due to misconduct. The more a company lays off the more taxes they pay.

Medicare Part B

Voluntary supplementary insurance. Covers outpatient care, physician services and services ordered by physicians (diagnostic tests, medical equipment, supplies).

Medicare Part D

prescription drug plan provided by private insurance companies and funded by the federal government.

Survivor Benefits

provide death benefits to eligible dependents. these benefit amounts are calculated according to the employees earning capacity at the tiem of illness or injury