14. Providing Employee Benefits Flashcards
What is the average % of total compensation that benefits make up
Give 3 points about the role of benefits
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
Give 2 disadvantages of benefits
Define cafeteria-style plan
Name the 5 benefits required by law
- 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
Define social security
What is social security made up of? (5)
Flat payroll tax on employers and employees
Combines: old age (retirement), survivors’, disability and hospital and supplementary medical insurance
Define unemployment insurance
Which 4 conditions must people meet to receive these benefits?
Define the experience rating
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
Define workers’ compensation
Name the 4 major categories of benefits
Name the 3 factors that the cost of workers’ compensation depends on
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
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)
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
Name 5 optional benefits programs
Give and define 3 main components of paid leave
Name the 4 optional benefits programs under group insurance
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
Give and define the main act in medical insurance
Name the 6 approaches to controlling health-care benefits costs
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)
Give and define the main component in life insurance
Give and define the 2 types of disability insurance
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
Give and define 5 types of retirement plans
- 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:
What are vesting rights?
Define summary plan description
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
Name 4 types of family-friendly benefits
Name 5 examples of other quality of work-life balance benefits
Name 4 legal requirements for benefits
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