Chapter 13, Employee benefits and Services Flashcards
Explain the strategic role of employee benefits
The strategic importance of employee benefits is increasing in the post-job-security era. When benefits are aligned with business strategy, they can help attract and retain the right people to achieve business objectives
Describe six government-sponsored benefits
includes:
- Employment insurance
- pension plans
- workers’ compensation
- paid time off (including maternity and paternity leave)
- Pay on employment termination
Employees and employers must abide by the rules associated with the benefits. Employers deduct EI and pension contributions at the source of payment.
Explain why the cost of health insurance benefits is increasing and how employers can reduce these costs.
Health insurance costs are rising because of expensive new drugs, rising drug use by an aging population, reductions in coverage under provincial healthcare plans, benefits fraud, and costs of retiree healthcare commitments.
- Cost Reduction Strategies:
- Increase employee contributions.
- Limit covered drugs.
- Offer wellness programs.
- Use risk assessment to curb fraud.
- Provide flexible spending accounts.
Describe the two categories of pension plans and the shift that is occurring in their relative popularity
Two Categories:
benefit plans:
- Benefit based on a formula linked to years of service
- Employer bears investment risk
Contribution Plans:
- Specified contributions made by the employer
- benefits vary based on investment returns (employees bear investment risk)
Legal Considerations:
- Membership Requirements: who is eligible to participate
- Retirement Age: The age at which benefits can be claimed
- Funding: When employees gain full ownership of pension benefits
- Vesting: When employees gain full ownership of pension benefits
- Portability: Ability to transfer benefits when changing jobs
These considerations are vital for developing pension plans that comply with legal requirements and meet the needs of both employers and employees.
Discuss 3 types of personal employee services and 5 types of job-related services.
Personal Services:
- Credit Unions
- Counselling Services
- Employee Assistance Programs (EAPs)
- Other personal services (Social and recreational)
Job-related Services:
- Eldercare
- Subsidized employee transportation
- food services
- educational subsidies
- family-friendly benefits
Explain how to set up a flexible benefits program and cost considerations in benefits plan management.
The flexible benefits approach allows employees to put together their own benefit plan, subject to total cost limits and the inclusion of certain compulsory items.
to set up a flexible benefits program:
- Total cost: Decide the budget for all benefits
- Compulsory benefits: include must-have items like pension plans and insurance
- Additional benefits: Choose optional perks like health coverage and retirement plans
- Budget Allocations: Let employees pick optional benefits within the total budget.
Cost considerations:
- Health insurance costs: Rising due to factors like expensive drugs and benefits frauds.
Discuss five types of employee-specific benefits and identify the impact of these benefits on the employee-employer relationship
Employee-specific benefits are optional, but employers often offer them to attract and keep talented workers. These benefits can include things like childcare options, flexible work hours like telecommuting, help with education costs, personal support services like counselling, and perks for executives.
These include family-friendly benefits (such as childcare facilities), flexible work schedules (such as telecommuting), job-related services (such as educational subsidies), non-job-related personal services (such as counselling services), and executive perks.
