14. Providing Employee Benefits Flashcards

1
Q

What is the average % of total compensation that benefits make up

Give 3 points about the role of benefits

A

30% (31.3% in 2015)

  • Contribute to attracting, retaining, and motivating employees
  • Employees have come to expect that benefits will help them maintain economic security
  • Helps employers tailor their compensation to kinds of employees they need
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2
Q

Give 2 disadvantages of benefits

Define cafeteria-style plan

Name the 5 benefits required by law

A
  • Impose significant costs to organizations
  • More complex than pay structures, making them harder for employees to understand and appreciate

A benefits plan that offers employees a set of alternatives from which they can choose the types and amounts of benefits they want

Social security, unemployment insurance, workers’ compensation insurance, family and medical leave, health care

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3
Q

Define social security

What is social security made up of? (5)

A

Flat payroll tax on employers and employees

Combines: old age (retirement), survivors’, disability and hospital and supplementary medical insurance

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4
Q

Define unemployment insurance

Which 4 conditions must people meet to receive these benefits?

Define the experience rating

A

A federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs and incentives to stabilize employment

  • They meet requirements demonstrating they had been employed
  • They are available for work
  • They are actively seeking work
  • They were not discharged for cause, didn’t quit voluntarily, and are not jobless because of a labor dispute

The number of employees the company laid off in the past and the cost of providing them with unemployment benefits

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5
Q

Define workers’ compensation

Name the 4 major categories of benefits

Name the 3 factors that the cost of workers’ compensation depends on

A

State programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors

Disability income, medical care, death benefits, rehabilitative benefits

Kind of occupation, state where company is located, employer’s experience rating

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6
Q

Define the medical and family leave act 1993

Give the 3 conditions where this exists

Define the patient protection and affordable care act 2010 (4)

A

Requires organizations with 50 or more employees to provide up to 12 weeks of unpaid leave

After childbirth/adoption, to care for seriously ill family member, for an employee’s own serious illness

Changes in how health care is to be paid for: requirements for insurance companies, incentives and penalties for employers providing health insurance as a benefit, expansion of public funding, and creation of health insurance exchanges as an option for the sale of health insurance

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7
Q

Name 5 optional benefits programs

Give and define 3 main components of paid leave

Name the 4 optional benefits programs under group insurance

A

Paid leave, group insurance, retirement plans, family-friendly benefits, other quality of work-life benefits

  • Personal Days - Days off for personal needs
  • Floating Holidays - Paid hols that vary from year to year
  • Paid Time Off - A pool of days to use as the employee wants

Medical insurance, life insurance, disability insurance, long-term care insurance

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8
Q

Give and define the main act in medical insurance

Name the 6 approaches to controlling health-care benefits costs

A

Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 - Federal law that requires employers to permit employees or their dependents to extend their health insurance coverage at group rates for up to 36 months following a qualifying event (layoff, reduced hours, death)

Managed care, health maintenance orgs (HMO), preferred provider orgs (PPO), flexible spending accounts, consumer-driven health plans (CDHP), employee wellness programs (EWP)

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9
Q

Give and define the main component in life insurance

Give and define the 2 types of disability insurance

A

Term Life Insurance - If the employee dies during the term of the policy, the employees beneficiaries receive a death benefit payment

  • Short-Term - Insurance that pays a percentage of a disabled employee’s salary as benefits to employee for six months or less
  • Long-Term - Insurance that pays a percentage of a disabled employee’s salary after an initial period and potentially for rest of employee’s life
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10
Q

Give and define 5 types of retirement plans

A
  • Contributory Plan - Retirement plan funded by contributions from employer and employee
  • Non-Contributory Plan - Retirement plan funded entirely by employer contributions
  • Defined Benefit Plan - Pension plan that guarantees a specified level of retirement income - employer sets up a pension fund to invest contributions
  • Defined Contribution Plan - Retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account (money purchase, profit-sharing and ESOP, 401k)
  • Cash Balance Plan - Retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee’s salary:
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11
Q

What are vesting rights?

Define summary plan description

A

Guarantee that when employees become participants in a pension plan and work a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer

Report that describes a pension plan’s funding, eligibility requirements, risks, and other details

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12
Q

Name 4 types of family-friendly benefits

Name 5 examples of other quality of work-life balance benefits

Name 4 legal requirements for benefits

A

Family leave, child care benefits, college savings plans, elder care

Subsidized cafeterias, on-site health care, tuition reimbursements, relocation expenses, employee discounts

Benefits required by law, tax treatment of benefits, anti-discrimination laws, accounting requirements

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