Chapter 12 Flashcards
The parts of the total compensation package, other than pay for time worked,
provided to employees in whole or in part by employer payments (e.g., life insurance, pension, workers’ compensation, vacation)
employee benefits
A form of deferred compensation.
Usually have four common
characteristics: They (1) involve deferred payments to a former employee for past services rendered; (2) specify a normal retirement age, (3) specify a formula for calculating benefits, and (4) provide for integration with social security benefits.
pension plans
Government regulations
that aim at maintaining low inflation and low levels of unemployment. They frequently focus on “cost-push” inflation, limiting the size of pay raises and the rate
of increases in prices charged for goods and services. Used for limited time periods only.
wage and price controls
employee benefits mandated by the state government
workers compensation
employee benefits mandated by the federal government
unemployment insurance and social security
For employers who choose to have a retirement plan, this act sets some formidable rules that must be
followed to be in compliance.
employee retirement income security act
is a savings plan in which employees are allowed to defer pretax income
401k
Medical care package where the employer finances the cost up to a dollar maximum and the employees search for options that best fit their specific needs.
consumer driven health care
A nontraditional health-care delivery system. Offer comprehensive benefits and outpatient services, as well as hospital coverage, for a fixed monthly prepaid fee.
health maintenance organizations
A benefit plan in which employees have a choice as to the benefits they receive within some dollar limit. Usually a common core benefit package is required (e.g., specific minimum levels of health, disability, retirement, and death benefits) plus elective programs from which the employee may select a set dollar amount. Additional coverage may be available through employee contributions.
cafeteria style plan
Employee benefits, from information to
applications, posted on company intranet by employer, which allows employee access 24/7 and employer to update easily.
e-benefits
Procedure that begins when
an employee asserts that a specific event (e.g., disablement, hospitalization, unemployment) has occurred and demands that the employer fulfill a promise for payment
claims processing
Period during which new employees are excluded from benefits coverage, usually until some term of employment (e.g., 3 months) is completed.
probationary periods
An attempt made by organizations
to contain benefit costs, such as imposing deductibles and coinsurance on health benefits or replacing defined benefit pension plans with defined contribution plans.
cost containment
Limit of disability income payments to some maximum percentage of income and limit of medical/dental coverage for specific procedures to a certain fixed amount
benefit limitations
requires that employees pay a fixed or
percentage amount for coverage.
copay
controlling costs through policies such as seeking competitive bids for program delivery
administrative cost containment
The practice of hiring outside vendors
to perform functions that do not directly contribute to business objectives and in which the organization does not have a comparative advantage.
outsourcing
Employees cost-saving tool by which
the employee pays the first x number of dollars when a benefit is used (e.g., hospitalization). The employer pays subsequent costs up to some predetermined
maximum.
deductibles
Benefit option whereby employees
share in the cost of a benefit provided to them.
coinsurance
corresponding to wage concessions, some employers are negotiating with employees to eliminate employer contributions or reduce them to selected options
benefit cutbacks
A benefit option or package in which the employer negotiates a dollar maximum payout. Any change in benefit costs over
time reduces the amount of coverage unless new dollar limits are negotiated.
defined contribution plans
A benefit option or package in
which the employer agrees to give the specified benefit without regard to cost maximum. Opposite of defined contribution plan.
defined benefit plans
In families in which both spouses
work, the coverage of specific claims from each spouse’s employment benefit package. Employers cut costs by specifying payment limitations under such conditions.
dual coverage
A maximum payout for specific
benefit claims (e.g., limiting liability for extended hospital stays to $150,000)
benefit ceiling
