Chapter 11 - benefits - WGU C202
Retirement plans (customary benefit)
Retirement planning, in a financial context, refers to the allocation of savings or revenue for retirement. The goal of retirement planning is to achieve financial independence.
The Family and Medical Leave Act of 1993 (FMLA)
Requires most employers to provide employees up to 12 weeks of unpaid leave to care for family members.
Employee Retirement Income Security Act of 1974 (ERISA)
is a federal law that protects employees' retirement benefits from mismanagement.
flexible spending account (FSA)
is an employer-sponsored benefit that allows you to pay for eligible medical expenses on a pre-tax basis (similar accounts exist for dependent and childcare expenses). A FSA helps reduce the cost of medical expenses that are not covered by the company's health insurance plan.
Family Medical Leave Act (FMLA) is considered a ______benefit
mandatory
Unemployment Insurance (UI) is considered a(n) ________benefit
mandatory
social security is considered a(n) ________benefit
mandatory
Benefits include
medical insurance, tuition reimbursement, sick and vacation leave, retirement savings plans, product discounts, and free food.
presenteeism
when an employee physically comes to work but does not function at his or her full potential.
total compensation statement
Communicating total compensation in detail through a written summary of employee direct and indirect compensation.
Disability insurance is considered a________ benefit
Customary Benefit
the goal of an organization that offers an on-site daycare for kids and elders is to_______
Decrease employee stress (Wellness program; flextime; personal days; on-site daycare for kids and elders)
The goal of an organization that offers the benefits of wellness programs, a fitness center, health coaches, and free healthy lunches and snack is to ______
Decreasing healthcare claims (Wellness program; fitness center; health coaches; free healthy lunches and snacks; stress management program)
Defined benefit retirement plans
Promise participants a monthly benefit at retirement.
_________________ requires most employers to provide employees up to 12 weeks of unpaid leave to care for family memebers
FMLA The Family and Medical Leave Act of 1993
Flexible benefits plans (cafeteria plans)
Flexible benefits plans give employees a set amount of credits or dollars to allocate among different benefits options provided by the employer. Flexible benefits plans were established by the Revenue Act of 1978 and are regulated by Internal Revenue Code Section 125
Life insurance
Health, life, and disability insurance are the three most common types of insurance offered as employee benefits. pays a beneficiary a sum of money after the death of an insured individual.
the goal of an organization that offers tuition reimbursement is to _____
Improving employee skills (Tuition reimbursement; paid sabbaticals)
The goal of an organization that offers benefits of health, life, workers' compensation, and disability insurance is to_______
Increasing financial security (Health, life, workers' compensation, and disability insurance; prescription drug coverage; financial planning seminars; retirement plan)
The goal of an organization that offers the benefits of greater 401(k) matching, financial planning seminars, and long term care insurance is to ________
Increasing retirement security (Greater 401(k) match; financial planning seminars, long-term care insurance)
Customary Benefits
Life insurance Disability insurance Health insurance Retirement plan
Mandatory Benefits
Social Security Unemployment insurance Workers' compensation Family Medical Leave Act (FMLA) COBRA health coverage
Chapter 10 Takeaway Points
Some employee benefits are required by law. Others are offered to promote employee health, provide financial protection, and improve employees' work-life balance. Improved employee performance, satisfaction, commitment, and retention are also common goals of employee benefits. By law, organizations with a certain number of employees must offer Social Security, unemployment insurance, workers' compensation, FMLA leave, and COBRA. Customary benefits are benefits employees tend to expect. For example, sick leave and vacation days have come to be expected by most employees. Optional benefits are offered at the discretion of the organization and are typically targeted at specific organizational goals or employee needs, including reinforcing the organization's culture and retaining employees. Employees often do not read or fully understand lengthy benefits booklets, benefit options can be complex, and many people only have an interest in learning about their benefits when they need to use them. Employee benefits offerings are influenced by the organization's competition for talent, its compensation strategy, its culture, and characteristics of its workforce.
Unemployment insurance
The Social Security Act of 1935 also established unemployment insurance to provide temporary income during periods of involuntary unemployment.
Social Security
The Social Security Act of 1935 provides retirement income to qualified workers and their spouses after working a certain number of hours. Benefits can be claimed beginning at age 62
total compensation or total rewards
The combined value of direct (pay and bonuses) and indirect (nonwage) compensation (total rewards).
Defined contribution retirement plans
The employer, the employee, or both contribute to the employee's individual account, and the contributions are invested on the participant's behalf and do not promise a specific benefit level at retirement. Defined contribution plans include 401(k) plans, 403(b) plans, profit-sharing plans, and employee stock ownership plans.
Benefits Level - The choice of how much to invest in employee benefits is influenced by:
The organization's competition for talent The organization's compensation strategy The organization's culture Characteristics of the organization's workforce
The choice of how much to invest in employee benefits is influenced by several factors:
The organization's competition for talent The organization's compensation strategy The organization's culture Characteristics of the organization's workforce
Vesting
The point at which an employee earns a nonforfeitable right to benefits funded by employer contributions.
_________ benefits are given to workers who become unemployed through no fault of their own
Unemployment insurance
Optional Benefits
Work-life benefits Free food Workout facility Domestic partner benefits Flexible spending account Nonfinancial benefits Creative benefits
__________pays for medical costs—and sometimes time off—if an employee suffers a job-related sickness or accident, and pays survivor benefits in the case of an employee's death
Workers' compensation
Employee benefits
are nonwage compensation or rewards given to employees. Benefits are sometimes referred to as indirect compensation in contrast to pay, which is considered direct compensation
Customary Benefits
are those that are so commonly provided that employees view them as an entitlement. For example, sick leave and vacation days have come to be expected by most employees.
domestic partner benefits
are two people who are not married but are in a same-sex or opposite-sex arrangement similar to marriage.
Organizations offer employee benefits in order to:
attract and retain top employees boost employee performance, satisfaction, commitment, and retention promote employee health provide financial protection improve employees' work-life balance Although some organizations may pursue these goals for moral reasons, many do it for economic and productivity reasons.
The goal of an organization that offers the benefits of housing, relocation, and transportation allowances is to______
attract recruits
Companies use _________ to attract and retain employees, and sometimes to compensate for offering lower pay then their competitors.
benefits
Health insurance is considered a ________benefit
customary
Life insurance is considered a(n) _________ benefit
customary
a retirement plan is considered a _________benefit
customary
The goal of an organization that offers the benefits of flextime, personal days, and a wellness program is to ______
decrease absenteeism (Wellness program; flextime; personal days; on-site daycare for kids and elders)
The two broad types of retirement plans are
defined benefit plans and defined contribution plans.
work-life benefits
employer-sponsored benefit programs or initiatives designed to help all employees balance work life with home life
the goal of an organization that offers services that improve employees' at work experience (on site oil change, dry cleaning, food, massages) is to________
improve retention (USAA example - Flextime; 401(k); health, dental, and life insurance benefits; improving the employee experience (on-site oil changes, dry cleaning, food, massages, and health care)
Nonfinancial Benefits
include career development opportunities, the opportunity to work in an energizing and exciting work environment, the opportunity for meaningful and challenging work, and attractive job designs
Domestic partner benefits are considered a(n)___________benefit
optional
a workout facility is considered a ________benefit
optional
creative benefits are considered a________benefit
optional
Workers' compensation insurance
pays for medical costs—and sometimes time off—if an employee suffers a job-related sickness or accident, and pays survivor benefits in the case of an employee's death.
Additional reasons organizations offer employee benefits are to
promote employee health, provide financial protection, and improve employees' work-life balance.
Health insurance
provides healthcare and sometimes dental insurance coverage for employees and their dependents. Healthcare benefits are the most common benefit used for recruiting employees at all levels of the organization.
Disability insurance
supplements workers' compensation insurance to provide continued income if an employee becomes disabled.
An employee who voluntarily quits or is terminated for cause is not eligible for ___________
unemployment insurance
_____________provides temporary income during periods of involuntary unemployment.
unemployment insurance
the goal of _______ is to preserve many other jobs that could be lost if these workers lost their income and spending power.
unemployment insurance
