HRPO Legally Required Benefits
What are (3) the differences between Flexible-spending accounts (FSAs) and Health reimbursement accounts (HRAs)?
1 Employees do not contribute to HRAs. 2 Permit employees to carry over unused account balances from year to year. 3 Employees may offer HRAs as well as FSAs and use of these accounts is not limited to participation in high deductible health care plans
What are the (3) Health Insurance Portability and Accountability Act of 1996 (HIPAA) provisions?
1. Guarantees ready access to coverage under a subsequent employers health plan, regardless of health or claims experience, 2. Limits the length of preexisting condition clauses (preexisting condition clauses now unlawful under PPACA), 3.Protects the transfer, disclosure, and use of health care information
What are (3) adv of HSAs?
1. HSAs are portable 2. HSAs are subject to inflation-adjusted funding limits 3.Do not limit employee choice
What are the four Categories of Legally Required Benefits?
1. Social Security Programs: (Unemployment insurance, Old Age, Survivor, and Disability Insurance (OASDI), Medicare) 2. Workers' Compensation, 3. Family and Medical Leave and 4. Health insurance
What are the Benefits and Costs of Legally required Benefits?
1.Legally required benefits are costly. 2. HR professionals can take steps to maximize the benefits of these costly benefits: Implement workplace safety programs , Implement health promotion programs that include inspections of the workplace to identify health risks
What are the Eligbiliity req. for Unemployment Insurance?
Able and available for work , Actively seeking work, Has not refused suitable work , Must be employed for the last four or five quarters prior to becoming unemployed, known as the base period.
What are OASDI Survivor's Benefits (care for individuals that live on after you die)?
Basically a form of life insurances when the employee dies and their surviving members get benefits from it.. Average monthly benefit was $1,253 in 2015
Point-of-Service Plans
Combine features of health maintenance organizations and fee-for-service arrangements, Employees pay a nominal copayment for each visit to a designated network of physicians, Employees possess the option to receive care from health care providers outside the designated network of physicians, but they pay somewhat more for this choice
What are the features of Fee-for-Service Plans?
Deductibles, Coinsurance, Out-of-pocket maximums, Preexisting condition clauses (now eliminated by PPACA), Maximum benefit limits (now eliminated by PPACA
What is the purpose of Health savings accounts (HSA)?
Employers establish HSAs to help employees pay for medical expenses associated with high-deductible health insurance plans
Funding Work Comp.
Emplyers subscribe to insurance through private carriers, state funds or self-insurance which requires companies to deposit a surety bond enabling them to pay their own workers' claims directly.
Old Age, Survivor, and Disability Insurance (OASDI)
Enacted in 1935 for retirement insurance, Survivors' insurance added in 1939, Disability insurance added in 1965
What are alternatives to designing Health Insurance programs(3)?
Fee-for-service plans, Managed care approaches and Plans associated with the consumer-driven health care approach
What are the (3) different types of Consumer-Driven Health Care Plans?
Flexible-spending accounts (FSAs), Health reimbursement accounts (HRAs), and Health savings accounts (HSA)
What is Medicare?
Health insurance coverage for citizens age 65 and older. Provides insurance coverage for: Hospitalization, Convalescent care, Major doctor bills, Prescription drug costs
What are the (3) Managed Care plans?
Health maintenance organizations (HMOs), Preferred provider organizations (PPOs), and Point-of-service plans (POSs)
How can HR managers, other business professionals minimize the cost of benefits?
Integrate workers' compensation benefits into the rest of the benefits program and Contain costs for unemployment insurance
Flexible-spending accounts (FSAs)
Permit employees to pay for specified health care costs that are not covered by an employer's insurance plan. Prior to each plan year, employees elect the amount of pay they wish to allocateAdvantage → ability to make contributions on a pretax basis. Disadvantage → "use it or lose it" provision of FSAs
What is Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)?
Provide employees opportunity to continue receiving employer-sponsored medical care insurance temporarily if their coverage otherwise ceases due to: Termination, Layoff, or Other change in employment status
What are the objectives of Workers' Compensation?
Provide income and medical benefits, Reduce litigation, Relieve charities' financial drain, Eliminate legal fees and time, Encourage employer safety, and to Promote accident study and avoidance
Fee-for-Service Plans
Provide protection against health care expenses in the form of a cash benefit. Three types of eligible health expenses: 1. Hospital expenses, 2. Surgical expenses, 3. Physician charges. Types: Indemnity plans and Self-funded plans
Health maintenance organizations (HMOs)
Provides prepaid medical services Copayments represent nominal payments Common copayment amounts: Between $15 and $50 for each doctor's visit, Between $10 and $50 per prescription drug, Between $50 and $500 for hospital or emergency room admission. Primary care physicians determine when patients need the care of specialists
What is the purpose of Consumer-Driven Health Care Plans?
Refers to the objective of helping companies maintain control over costs while also enabling employees to make greater choices about health care, Enables employers to lower the cost of insurance premiums by selecting plans with higher employee deductibles, The most popular consumer-driven approaches are flexible spending accounts and health reimbursement accounts, and they Provide employees with resources to pay for medical and related expenses not covered by higher deductible insurance plans.
Preferred provider organizations (PPOs)
Select group of health care providers: Employees choose from a list, Financial incentives to use list. Physicians must: Meet quality standards, Abide by PPO cost containment, Accept PPO fee structure. Does not provide prepaid benefits.Contain DEDUCTIBLE AND COINSURANCE provisions.
Unemployment Insurance
Temporary income for spells of unemployment that result through no fault of the employee, An employee who is terminated for cause (ex. poor performance) does not qualify, An employee who is terminated as part of a company layoff is eligible
What does COBRA Cover?
Up to 18 months for individuals and their spouses and dependents. May extend for up to 36 months for spouses and dependents facing a loss of employer-provided coverage because of an employee's: Death, Divorce, Legal separation, Other (termination, retirement, layoff)
What are Disability Benefits?
Worker was fully insured (40 quarters of coverage), Eligibility varies according to age and disability. Younger workers need fewer quarters of coverage because they have fewer years to accumulate quarters., Disability must last one year or be terminal, Average monthly disability benefit was $1,146 in 2015
What is the purpose of Workers' Compensation?
Workers' compensation programs, run by states individually, are designed to cover expenses incurred in employees' work-related accidents.
Deductible
a common feature of fee-for-service plans. its an amount employees must pay for services, before insurance benefits become active.
Funding for Unemployment
comes from federal and state taxes under the Federal Unemployment Tax Act (FUTA)
What are the requirements for FMLA of 1993?
employed by a private employer or The Fed. have been employed for at least 12 months by a given employer, and have provided 1,250 hours of service during the 12 months prior to making a requester a leave.
Coinsurance
refers to the percentage of covered expenses paid by the insured. EX. MOST INDEMNITY PLANS STIPULATE 20%... so the plan will pay 80% of covered expenses and the insured is responsible for the difference (20%)
Funding OASDI & MEDICARE
requires equal employer and employee contributions under Federal Insurance Contributions Act (FICA).employers pay a tax based on payroll and employees contribute a tax based on earnings. Self-Employment Contributions Act (SECA) self employed people contribute at higher tax.
Carve-out plans
separate insurance plans to provide specific kinds of benefits. they are set up to cover dental car, vision care, prescription drugs, mental health and substance abuse, and maternity care.
Out-of-Pocket maximum
the maximum amount the insured must pay per calendar year or plan year.... usually a fixed $ amount and apply to expenses beyond the deductible amount.
