Chapter 13 Flashcards
Seniors must choose
among a variety of plans written in bureaucratic
hieroglyphics
the medicare prescription drug improvement and modernization act of 2003
Rating system in which
insurance premiums vary directly with the number
of claims filed.
experience rating
State-administered
program that provides financial security for workers
during periods of joblessness.
unemployment benefits
Put in place by
the benefit administrator to make realistic estimates
of human resource needs and avoid a pattern of hasty
hiring and morale-breaking terminations
human resource planning system
Legislation passed
in 1993 that entitles eligible employees to receive
unpaid leave up to 12 weeks per year for specified
family or medical reasons, such as caring for ill family
members or adopting a child.
family and medical leave act
A plan that focuses on
profitability as the standard for group incentive.
profit-sharing plan
Pay approach that provides
income to an employee at some future time as
compensation for work performed now
deferred compensation
A deferred
compensation program that qualities for tax exemption.
It must provide contributions or benefits for employees
other than executives that are proportionate to
contributions provided to executives.
“qualified” deferred compensation plan
A defined benefit plan that
looks like a defined contribution plan. Employees
have a hypothetical account, such as a 401(k), into
which is deposited what is typically a percentage of
annual compensation. The dollar amount grows both
from contributions by the employer and by some
predetermined interest rate (e.g., often set equal to the
rate given on 30-year treasury certificates).
cash balance plans
Tax-favored
retirement savings plans that individuals can establish
themselves.
individual retirement account
A benefit plan provision that guarantees that
participants will, after meeting certain requirements,
retain a right to the benefits they have accrued, or some
portion of them, even if employment under their plan
terminates before retirement.
vesting
Transferability of pension benefits for
employees moving to a new organization. ERISA does
not require mandatory portability of private pensions.
On a voluntary basis, the employer may agree to let an
employee’s pension benefit transfer to an individual
retirement account (IRA) or, in a reciprocating
arrangement, to the new employer.
portability
Agency to which employers are required to pay
insurance premiums to protect individuals from bankrupt
companies (and pension plans!). In turn, the PBGC
guarantees payment of vested benefits to employees
formerly covered by terminated pension plans.
pension benefit guaranty corporation
When insurance rates are based
on the medical experience of that entire community.
Higher use of medical facilities and services results in
higher premiums.
community rating
Rating system in which
insurance premiums vary directly with the number
of claims filed
experience rating
Health-care
delivery system in which there is a direct contractual
relationship between and among employers, health-care
providers, and third-party payers. An employer is able
to select providers (e.g., selected doctors) who agree to
provide price discounts and submit to strict utilization
controls.
preferred provider organizations
Costs link
consumer choice of more or less expensive options to
higher or lower individual costs.
consumer-directed health-care plans
is a hybrid plan combining health maintenance
organization (HMO) and preferred provider
organization (PPO) benefits
point-of-service plan
The employer sets up an account for a specified amount.
When an employee has qualified medical costs, they’re
submitted for reimbursement until the account is
depleted.
health reimbursement arrangements
a tax-exempt account built up through contributions of the
employee or the employer, or both, that can be used to
pay for health care.
health savings accounts
A tool used by
employers to gain some control over health-care
costs while still providing health security to workers.
personal care accounts
Benefit options that
provide some form of protection for disability. Some
are legally required, such as workers’ compensation
provisions for work-related disability and social
security disability income provisions for those who
qualify.
salary continuation plans
An insurance plan
that provides payments to replace income lost through
an inability to work that is not covered by other legally
required disability income plans.
long-term disability plans
Eliminates the distinction
between sick days and other paid days off, thus
eliminating the incentive to “fake” illness.
paid-time-off plans
