Topic 10 Flashcards
Affordable Care Act (ACA)
A federal law passed in 2010, which prohibits insurers from denying coverage to individuals with pre-existing conditions, sets minimum standards for health insurance policies, includes an individual mandate for individuals to have a health insurance policy, and expands Medicaid eligibility for many individuals and families.
Baby Boomers
People born between 1946 and 1964; in general, they greatly value loyalty, financial security, stability, and a positive work ethic.
Defined Benefit Plan
A retirement plan in which the employer commits (and pays) a specific monthly benefit (or amount) to the employee when the employee retires.
Defined Contribution Plan
A retirement plan in which the employer pays a specific amount, or contribution, to an employee’s retirement during each pay period that the employee is with the firm. Both the traditional 401(k) and Roth 401(k) plans are examples of defined contribution plans.
Direct Compensation
The money paid directly to employees in exchange for their work, including wages, salaries, bonuses, commissions, and tips.
Employee Benefits
The parts of the total compensation package (other than pay for time worked) provided to employees in whole or in part by employer payments such as life insurance, pension, worker’s compensation, and vacation. Rewards are provided by the organization to employees for their membership and/or participation (attendance) in the organization.
Employee Retirement Income Security Act (ERISA)
A federal law that sets minimum standards for pension plans in the private sector.
Generation X
People born between 1965 and 1980 who are typically well-positioned within their careers and find value in organizations that are stable, provide flexibility to define work arrangements (such as telecommuting), offer child care and elder care benefits, and promote work/life balance that allows employees to enjoy life now instead of waiting for retirement.
Indirect Compensation
In addition to direct compensation, rewards that employers pay for other employee services such as health insurance benefits, paid time off, retirement plans, education, etc.
Total Compensation
Sum of all direct compensation (such as salary, bonus, commission) and indirect benefits (such as insurance, paid time off, retirement plans) that an employee receives from an employer.
What Is Indirect Compensation?
- Employee benefits 2. Employee training 3. Employee services
What Is the Key Factor in Distinguishing Indirect Forms of Compensation?
No cash is provided directly to the employee (no cash in hand)
