Chapter 12 - Employee Benefits and Safety Programs

high-deductible health plan (HDHP)

(also called a catastrophic health plan) a type of managed-care health insurance plan that costs the employer and employee less per month because they require the employee to pay the first few thousand dollars of medical costs only when the employee has a major medical problem

Pension Protection Act (PPA)

Act passed in 2006 and designed to strengthen the US pension system by tightening rules relative to employer responsibilities for funding pension accounts and for administering and terminating pension funds

Health Insurance Portability and Accountability Act (HIPAA)

Act that makes it easier for workers to maintain their health coverage when they change employers because it specifies that coverage under a previous employer's health plan counts for meeting a preexisting condition required under a new plan

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Act that provides for employees and their families to have the option to continue their group health, dental, and vision insurance coverage for up to 18 months when they are terminated for a qualifying reason as long as they pay the full cost of the premium

Account-Based Health Plans (ABHP)

a consumer-driven plan that pairs a group health plan with a tax-advantaged medical spending amount

Employee Retirement Income and Security Act (ERISA)

a federal law that protects benefits for retirees in the private sector

point-of-service plan (POS)

a hybrid of an HMO and a PPO where individuals can also receive treatment outside the network but must pay a higher deductible

Pension Benefit Guaranty Corporation (PBGC)

a not-for-profit organization created by the federal government that insures defined benefit plans

contributory retirement plan

a pension plan in which the employer and the employee both put money into the retirement account

noncontributory retirement plan

a pension plan in which the employer puts funds into an employee's account without requiring the employee to make contributions

defined benefit pension plan

a pension plan that provides an annuity to eligible employees upon their retirement with the amount paid per year based on a formula that usually includes a company-determined percentage, the number of years worked, and either the last salary or some average of previous years' salaries

401 (k) plan

a retirement plan that allows employes to defer receiving some of their compensation until retirement with contributions to the plan taken out of the employee's paycheck pretax and the funds accumulating tax free until retirement begins

Social Security Act

a social insurance act put into effect in 1937and funded by employer and employee contributions to provide old age, survivors, disability, and death benefits

workers' compensation

a social insurance program that provides cash benefits and medical care to workers wen they suffer injuries or illnesses related to their employment

health savings account (HSA)

a special account established through employers banks, credit unions, insurance companies, and other approved financial institutions into which an employee sets aside money pre-tax to help pay for his or her health care options

preferred provider organization (PPO)

a type of managed care program in which the employer negotiates the health care providers, usually in a network, for discounts and services for healthcare coverage for employees

health maintenance organization (HMO)

a type of of managed care health insurance program that requires employees to designate a primary care physician and have any visits to a specialist referred by the primary care physician

cash balance plan

a type of retirement account in which the employer credits the

health reimbursement account (HRA)

account into which employers put money to reimburse employees for qualified medical expenses

flexible benefit plan

also known as cafeteria plans; types of benefit plan that allows employees to choose which benefits they want to purchase from a menu of benefits

consumer-driven health plan (CDHP)

an alternative type of health care plan that puts more of the decision making under the control of employees by letting them choose whether they prefer a plan with a higher deductible or other more expensive alternatives, how much to put into a savings plan for health care purposes, and which health care providor to use

voluntary benefits

benefits that an employer chooses to offer its employes without being required to do so

unemployment insurance (UI)

created by the Social Security ACt of 1935 and administered by the states, this program provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own

wellness program

employer provided program designed to keep employees healthy; can include programs such as smoking cessation, weight loss management programs, and memberships in fitness centers

Accidental Death and Dismemberment Insurance (AD&D)

insurance designed to compensate employees for the loss of a body part or to compensate the employee's family if an employee suffers the loss of a limb or dies accidentally at work

short-term disability

insurance plan that pays a specified porition of an employee's salary when the employee is out of work for a limited time due to a disability

long-term care insurance (LTCI)

insurance plan that provides assistand to agining, disabled, and ill persons who need daily help with tasks such as dressing, eating, or bathing for an extended time period

long-term disability

insurance plan that typically starts after a specified period of time (6 to 12) weeks, for example, from the time of a disability and pays a portion of the employee's salary until retirement age

Older Workers Retirement Protection Act

prohibits discrimination against older workers in all employee benefits except when age-based reductions in employee benefit plans are justified by significant cost considerations

Employer Shared Responsibility provisions

requirement under the Affordable Care Act for employers with the equivalent of 50 full time employees to offer affordable health coverage to their full-time employees and their dependents, or be subject to an Employer Shared Responsibility Plan

Employee Assistance (EAP)

resource for employees dealing with personal problems, including services such as attorney consultation, child-care and elder-care options, budget information, addiction recovery

Medicare

the health insurance portion of Social Security for retirement age 65 or older and for disabled workers

copay

the minimum amount employees must pay for health care as determined by their health insurance plan

ergonomics

the science of understanding the capabilities of humans in terms of their work environment

vesting

the time required before you own part or all of your retirement funds

Occupational Safety and Health Act (OSH Act)

this Act requires employers to provide a safe workplace for all employees, and provides a process for investigation of complaints of unfair practices and a process for workplace inspections

employee self-service (ESS) application

web-based programs accessed via a company's intranet where employees can review their benefits information and make changes during open enrollment periods