Topic 1 Flashcards
EE Benefits Loss Exposures
- Loss of income to EE
- Medical Expenses for EE
- Loss of productivity for ER
EE Benefits Perils
- Injury/Illness/Sickness
- Retirement
- Death
- Layoffs/Unemployment
- Personal Issues/Circumstance
- EAP: Employee Assistance Program
Medical Expenses
- Pre Retirement (Active EE)
2. Post Retirement
Pre Retirement Benefits
- Health Insurance plans
2. Specialized Coverages for narrowly defined perils
Health Insurance Plan Types
- Indemnity Plan
2. Managed Care Plan: HMP, PPO, CDHP, HDHP
Specialized Coverages for Narrowly Defined Perils
- Vision Insurance
- Dental Insurance
- Prescription Drug Insurance
Post Retirement Benefits
- Medicare: Required
2. Post Retirement Health Benefits
Post Retirement Health Benefits
- PRHB
2. Medical Supplement
Loss of Income Types
- Disability
- Occupational
- Unemployment
- Death
- Retirement
Disability Types
- Occupational
2. Non Occupational
Non Occupational Related Loss of Income
- Sick Leave (PTO): Paid Time Off
- Short Term Disability Insurance (STO)
- Long Term Disability Insurance (CTD)
- AD&D: Accidental Death and Dismemberment
- Social Security Disability Benefits; OASDI (Part D)
Occupational Related Loss of Income
- Workers Compensation (Required): Disability Benefits
2. OASDI (Required)
Unemployment Loss of Income
- Unemployment Insurance (Required)
2. Severance Package
Death Related Loss of Income
- Life Insurance, ER provided
- Term Life Insurance; most common, group based
- GTLI: Group Term Life Insurance - OASDI: Required
- Social Security Survivor Benefits - AD&D
- Worker’s Compensation: Required, death benefits
- Business Travel Accident Insurance
- Retirement Plans: Survivor Benefits; must include if offered
Retirement Related Loss of Income
- Pension
- Technically defined benefit plan: DB - Defined Contribution Plan: DC
- 401K or 403(B)
- OASDI: “O” for Old Age, Required
EE Compensation Broadview
Total Compensation View
Total Compensation View
- Any form or type of compensation other than direct, current wages paid to EE
- 18%-70% of payroll
- On average 40% of payroll
Types of Compensation
- ER share of legally required programs
- Private Insurance Plans + Retirement Plans
- Health, Life, Disability; 401K - Payments for time not worked
- PTO: Vacation - Extra Cash payments: Bonuses, Tuition Reimbursement
- “De Minimus Fringes”
- Lunches, free coffee, free parking
- Qualified EE Discounts; can only be so much
- No additional cost: flight attendant
Narrow View
An EE benefit plan is sponsored or initiated unilaterally or jointly by ERs and or EEs
Jointly Sponsored
- Union/Collectively Bargained
- Providing Benefits stem from an employment relationship
- Not underwritten or paid directly from any government
- Providing Protection against two core loss exposures: Loss of Income, Medical Expenses
Factors Contributing to EE Benefits as Method of Compensation
- Post WWII Wage and Price Controls
- Union Demands through collective bargaining
- Favorable tax treatment
- Changes in Social Economic Make up of US workforce
- Social Legislation and Regulation
Post WWII Wage and Price Controls
- Price Inflation
- Wage and Price Freezes
- Substitute Health Insurance for wages
- IRS: not tax on ER Provided Health Insurance
Union Demands Through Collective Bargaining
- Wagner Act (1935)
- Inland Steel Case (1948)
- Taft Hartley Act (1947)
Wagner Act
- 1935
- Gave Unions right to bargain over wages and other conditions of employment
Inland Steel Case
- 1948
- “Wages” under Wagner Act includes EE benefits
- EE benefits are a bargain-able issue
Taft Hartley Act
- 1947
- AKA Labor Management Relations Act
- LMRA
- Multi Employer Plan
- Single Employer Plan
- Collectively Bargained
- Jointly Administered Welfare Funds
- “Taft Hartley Plans”
- Trust fund that holds money as intermediary
Favorable Tax Treatment
- US Federal Income Tax (IRS)
- benefits are not taxable as part of compensation to EE
- Incentive for ERs to offer EE benefits
Changes In Social Economic Makeup of US Workforce
- Childcare Benefits
- Flexibility in benefits
- Retiree Benefits
- Portability in Benefits
Social Legislation and Regulation
- Workers compensation laws
- OASDI
- ADEA: Discrimination and Employment Act
- ADA: Americans with Disabilities Act
- COBRA: Consolidated Omnibus Budget Reconciliation Act
- TEA: Transportation Equity Act
- MHRA: Mental Health Parity Act
8, FMLA: Family Medical Leave Act - HIPAA: Health Insurance Portability and Accountability Act
- ERISA: Employee Retirement Income Security Act
- PPACA: Patient Protection and Affordable Care Act
Reasons for EE Benefits as Method of Compensation
- Total Compensation
- Favorable Tax Treatment
3 Take Advantage of Group Insurance vs Individual Insurance - Attract and Retain capable EEs
- Concern for welfare of Employees: Corporate Welfare
- Productivity or Efficiency
-Childcare
-Stock options
-Part time Health Insurance
-Mental Health Benefits, EAP
