Chapter 13
Benefits and Services
1.
Name and define each of the main pay for time not worked benefits.
2.
Describe each of the main insurance benefits.
3.
Discuss the main retirement benefits.
4.
Outline the main employees’ services benefits.
5.
Explain the main flexible benefit programs.
1
The Benefits Picture Today
Benefits
Indirect financial and nonfinancial payments employees receive for continuing their
employment with the company
2
The Benefits Picture Today
Benefits Required by Federal
or Most State Law
Social Security
Unemployment Insurance
Workers’ Compensation
Leaves under the Family Medical Leave Act
Benefits Discretionary
on Part of Employer*
Disability, Health, and Life Insurance
Pensions
Paid Time Off for Vacations, Holidays, Sick Leave,
Personal Leave, Jury Duty, etc.
Employee Assistance and Counseling Programs
“Family Friendly” benefits for Child Care, Elder Care,
Flexible Work Schedules, etc.
Executive Perquisites
Which benefits to offer
Who will be covered
Whether to include retirees
Coverage during probation
Policy Issues
How to finance benefits
Degree of employee choice
Cost containment procedures
Communicating benefits options
3
Pay for Time Not Worked
Supplemental Pay Benefits
Benefits for time not worked such as unemployment insurance, vacation and holiday pay,
and sick pay
Unemployment
Insurance
Vacations
Holidays
Provides for benefits if a person is unable to work through no fault of his or her
own
and
Paid vacation days and holidays given by employer
Sick Leave
Provides pay to an employee when he or she is out of work because of illness
Parental
FMLA
Such as pregnancy and maternity leave
Leave and
Severance Pay
A one-time payment when terminating an employee
Supplemental
Unemployment
The employer makes contributions to a reserve fund from which SUB payments
4
are made to employees for the time the employee is out of work due to layoffs,
Insurance Benefits
Workers’
Compensation
Provides income and medical benefits to work-related accident victims or their
dependents, regardless of fault
How benefits are determined – The ADA – Controlling workers’ compensation
cost – Case management
Hospitalization,
Health, and Disability
Insurance
Provide for loss of income protection and group-rate coverage of basic and
major medical expenses for off-the-job accidents and illnesses
Health
Maintenance
Organization (HMO)
A medical organization consisting of specialists operating out of a
community-based health care center. Which provides routine medical
services to employees who pay a nominal fee.
Preferred
Provider
Organizations (PPOs)
Groups of health care providers that contract to provide services at
reduced fees
Mental Health Benefits
Used to deal with mental illnesses
5
Insurance Benefits
Trends in Health Care
Cost Control
Communication, involvement, and empowerment
Premiums and co-pays
Prevention programs
Health savings accounts
Claim audits
Other cost control options
6
Insurance Benefits
Long Term Care
Nursing assistance for former employees
Life Insurance
Group life insurance or accidental death and dismemberment
Group Life Insurance
Benefits for Part Time
and
Contingent
Workers
Provides lower rates for the employer or employee and includes all
employees
Up to what extent its important?
7
Retirement Benefits
Social Security
A federal program provides benefits as retirement benefits at the age of 62. Also,
survivor’s or death benefits paid to the employee’s dependents. In addition to
disability payments to disabled employees and their dependents
Pension Plans
Plans that provides a fixed sum when employees reach a predetermined
retirement age or when they can no longer work due to disability
Defined
Benefits
Pension Plans
A plan that contains a formula for determining retirement benefits
Defined Contribution
Pension Plans
A plan in which the employer’s contribution to employees’ retirement
saving funds is specified
Portability
Instituting policies that’s enable employees to easily take their
accumulated pension funds when they leave employer
401 (k) Plans
Defined contribution plans based on section 401(k) of the Internal
Revenue Code.
8
Retirement Benefits
Pension Plans
Plans that provides a fixed sum when employees reach a predetermined
retirement age or when they can no longer work due to disability
Defined Contribution
Pension Plans
A plan in which the employer’s contribution to employees’ retirement
saving funds is specified
Saving and Thrift Plan
Employees contribute a portion of their earnings to a fund; the
employer usually matches this contribution in whole or in part
Deferred
Sharing Plan
Profit
Employers contribute a portion of profits to the pension fund,
regardless of the level of employee contribution
Employees
Ownership
(ESOP)
Stock
Plan
Cash Balance Plans
Qualified, tax-deductible stock bonus plans in which employers
contribute company stock to a trust for eventual use by employees
Defined benefit plans under which the employer contributes a
percentage of employees’ current pay employees’ pension plans
every year, and employees earn interest on this amount
9
Retirement Benefits
Pension Planning and
the Law
Law impact on pension planning
Employee retirement income security act (ERISA)
Pension benefits guarantee corporation (PBGC)
Membership requirements
Vesting vested funds (Money placed in pension fund that cannot be forfeited for
any reason)
Benefit formula
Plan funding
10
Retirement Benefits
Early Retirement
Early
Window
Employees retired before retiring date
Retirement
Phased
Retirement
and
the
Aging
Workforce
A type of offering by which employees are encouraged to retire early, the
incentives being liberal pension benefits plus perhaps a cash payment
What is phased retirement programs?
Improving Productivity Through HRIS: Benefits Management Systems
11
Personal Services and Family Friendly Benefits
Personal Services
Benefits provided to employees voluntarily
Credit Unions - Employee Assistance Programs
Family –
Benefits
Friendly
Benefits such as child care and fitness facilities that make it easier for
employees to balance their work and family responsibilities
Subsidized child care – Sick child benefits – Elder care – Time off … etc.
What is the effect on performance?
Other Job
Benefits
Executives
Perquisites
Related
Educational subsidies
Examples and Use
12
Flexible Benefits Programs
The
Cafeteria
Approach / Flexible
Benefits Plans
Flexible
Accounts
Flexible
Arrangements
Each employee is given a benefits fund budget to spend on the benefits he or
she prefers
Spending
Work
Enable employees to pay for medical and other expenses with pretax
dollars by depositing funds in their accounts from payroll deductions
Types
Flextime
A work schedule in which employees’ workdays are built around a core of
mid-day hours when all workers are required to be present
Compressed
Workweek
A work schedule in which employee works fewer but longer days each
week
What is the effectiveness of flextime and compressed workweek
programs?
Other Flextime Work
Arrangements
Job sharing – Work sharing - Telecommuting
13