Chapter 12 Flashcards
1
Q
Employee Benefits
A
- are nonwage compensation or rewards given to employees (indirect compensation)
- Employee Benefits focus on employees’ health and wellness.
- The combined value of direct and indirect compensation is referred to as Total Compensation.
- Safety programs important for employee and company well-being
2
Q
Benefits and Safety Programs
A
- Benefits can cost employers anywhere from 18% to 26% or even higher of a worker’s base pay.
- When salary budgets are tight, or when the hiring market is competitive, providing better benefits than competitors can help organizations attract and retain top employees.
- Employees might incline to accept less wages in return for indirect compensations.
3
Q
Benefits and Safety Philosophy
A
- Benefits and safety programs should assess the organization’s various employee needs.
- They signal to employees the company values and support the mission and vision of the firm
- According to Maslow’s theory of motivation, individuals are motivated by five levels of needs. Starting with the lowest level and climbing to the highest, the needs are physiological, safety and security, belongingness, self-esteem, and self-actualization. Motivational theories such as this one help companies understand that employees all have some basic needs but that their needs differ.
4
Q
Mandatory Benefits:
A
benefits that should be provided as it is mandated by law
5
Q
Voluntary benefits
A
- benefits that an employer chooses to offer its employees without being required to do so. They could be further categorized under:
- Customary Benefits: are so commonly provided that employees view them as entitlement.
- Optional Benefits: provided at the discretion of the organization.
- Creative Benefits: some organizations offer benefits that are not common such as free food, bringing pets to work, oil change, dry cleaning service…etc.
6
Q
Mandatory Benefits
A
- Social Security
- Unemployment Insurance
- Workers’ Compensation Insurance
- Affordable Care Act and Employer Shared -
- Responsibility Provisions
- Family Medical Leave Act
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
7
Q
Social security act
A
- a social insurance act put into effect in 1937 and funded by employer and employee contributions to provide old age, survivors, disability and death benefits.
- Have to work for at least 10 years to receive full credit.
- The amount received is a percentage of the average lifetime earnings.
- Lower incomes workers receive higher percentage than higher income workers
8
Q
Old-Age, Survivors, and Disability Insurance Program (OASDI)
A
- Ensures continuous stream of income after retirement
- Covers dependents and survivors
- Covers disabled workers and their dependent
- OASDI is funded by payroll taxes (12.4% of salary shared equally by the employee and employer).
9
Q
Medicare
A
- the health insurance portion of Social Security for retiree age 65 or older and for disabled workers.
2. 9% of the workers total earnings
10
Q
Unemployment Insurance
A
- Created by the Social Security Act of 1935 and administered by the states, this program provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own.
- At most states, it is funded by unemployment tax that employers pay – where the rate is determined by each state
- Exceptions: Alaska, New Jersey and Pennsylvania – they collect taxes from employees to fund the program.
- Public employment offices pay out compensations
- Beneficiaries require to prove that they are actively seeking employment
- The payments are delivered typically up to 26 weeks (sometimes increased by the federal government)
11
Q
Workers Compensation
A
- a social insurance program that provides cash benefits and medical care to workers when they suffer injuries or illnesses related to their employment.
- It also provides survivor benefits to dependents of workers who die due to work-related injuries.
Workers who receive those benefits are not allowed to sue their employers for damages of any type. - At most states, all employers are required to offer such programs regardless of the number of employees.
- Medical care is paid directly after the injury occurs.
- After 3-7 days, workers are paid temporary disability or permanent disability.
- Other costs might include rehabilitation and training employees for other jobs.
12
Q
Affordable Care Act (ACA)
A
- Improving quality and lowering costs of healthcare
- Providing greater access to healthcare
- Providing new consumer protection
13
Q
Employer Shared Responsibility Provisions
A
- requirement under ACA for employers with the equivalent of 50 full-time employees to offer affordable health coverage to employees and their dependents, or be subject to an Employer Shared Responsibility payment under certain conditions.
14
Q
Coverage:
A
- Ended preexisting exclusions for children
- Requires employer health plans to cover young adults up to age 26 on parent’s plan
- Ends lifetime limits on coverage for all new health insurance plans
- Provides certain types of preventive care at no cost
- Limits administrative costs by insurance companies
15
Q
Family Medical Leave Act
A
- Most employers must provide employees up to 12 weeks of unpaid leave to care for family members
16
Q
COBRA health coverage
A
- A continuation of group health coverage for employees and qualified beneficiaries who might otherwise be ended when an employee experiences a qualifying event.
- 18 months of coverage.
- Qualifying events (Resignation or termination – other than gross misconduct, Hours reduction or uncovered leave of absence).
- Spouse can claim COBRA (Death, Divorce, Legal separation).
- Child can claim COBRA (Death, After 26 when the child is not a dependent).
17
Q
Voluntary Benefits primarily focus on
A
- Employee Health, Wellness, and Welfare
- Employee Life management
- Employee Retirement
18
Q
Examples of voluntary benefits include
A
- Healthcare Plans
- Dental and Vision Plans
- Wellness programs
- Employee Assistance Programs
19
Q
Premium
A
The monthly fee for your insurance.
20
Q
Deductible
A
How muchyoumust pay for carefirst, before your insurer pays.
21
Q
Co-pay
A
Your cost for routine services to which your deductible does not apply.
22
Q
Out-of-pocket maximum
A
Theabsolutemax you’ll pay annually.
23
Q
Co-insurance:
A
The percentage you must pay for careafteryou’ve met your deductible.
24
Q
Traditional health care plans:
A
- Fee-for-service (Premium)
- Employee pays deductible, and afterwards pays the copayment and coinsurance (usually 20%).
- Employees choose doctors.
- Usually expensive as compared to other plans.
25
Q
Health Maintenance Organization (HMO)
A
- A type of managed care health insurance program that requires employees to designate a primary care physician and have any visits to a specialist referred by the primary care physician (gatekeeper).
- Often , it is limited in its geographical coverage and the HMO specifies the doctors and facilities that could be used.
- Usually have no or low deductible, lower copayments and out-of-pocket.
- Employers with 25 or more employees must give employees the opportunity to join a federally qualified HMO.
