Ch12 Employee Benefits

CHAPTER 12

Employee Benefits

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CHAPTER 12 TOPICS: ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘ ❘

1: 2: 3: 4: 5: 6: 7: 8: 9:

Goals of employee benefits Legally required benefits Health insurance options ERISA Retirement programs Vacation benefits Disability insurance Family-friendly benefits Flexible benefits DeCenzo and Robbins HRM 7th Edition

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1: WHY EMPLOYEE BENEFITS?? ❚ Necessary part of compensation program ❚ Attract and retain workers ❚ Don’t affect performance ❚ Workforce demographics DeCenzo and Robbins HRM 7th Edition

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1: COSTS OF PROVIDING EMPLOYEE BENEFITS ❚ 40% more for payroll ❚ Most increases due to health insurance premiums ❚ Flexible ❚ Negotiable when hired DeCenzo and Robbins HRM 7th Edition

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1: WHAT DID YOU FIND IN YOUR SURVEY? ❚ What benefits were chosen? ❚ Is there a difference by age group? ❚ Can you explain the differences? ❚ Are these current benefits issues in your text?

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1: CURRENT BENEFITS ISSUES ❚ Domestic partner benefits ❚ Dual career families ❚ Something of value for everyone ❚ Legally required ❚ Differentiate workplace for desired employees DeCenzo and Robbins HRM 7th Edition

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2: LEGALLY REQUIRED BENEFITS ❚ Social Security ❚ Unemployment Compensation ❚ Worker’s Compensation ❚ Family and Medical Leave Act DeCenzo and Robbins HRM 7th Edition

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2: SOCIAL SECURITY ❚ Retirement, disability, survivor ❚ Paid by government ❚ Health insurance through Medicare ❚ Payroll deduction (12.4%) ❚ AND…. DeCenzo and Robbins HRM 7th Edition

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2: SOCIAL SECURITY

❚ Eligibility after 40 quarters ❚ Age 65 > ❚ Bankrupt by 2037???

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2: UNEMPLOYMENT COMPENSATION ❚ Without a job ❚ Registered for available work ❚ Worked a minimum number of weeks ❚ Purpose - no fault (layoff, plant closing) ❚ AND….

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2: UNEMPLOYMENT COMPENSATION ❚ Funds from state and federal tax ❚ $56 per employee with guidelines ❚ 26 weeks

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2: WORKER’S COMPENSATION ❚ Job-related endeavors ❚ Comprehensive disability coverage ❚ Liability with company ❚ Cost born by organization ❚ Medical costs

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3: HEALTH INSURANCE ❚ Traditional Health Insurance ❚ Health Maintenance Organization ❚ Preferred Provider Organizations ❚ Employee-Operated Coverage ❚ COBRA DeCenzo and Robbins HRM 7th Edition

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3: TRADITIONAL HEALTH INSURANCE Expensive Most flexible Comprehensive Blue Cross hospital ❚ Blue Shield provider ❚ ❚ ❚ ❚

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3: HEALTH MAINTENANCE ORGANIZATION ❚ Preventive care ❚ Controlled costs ❚ Care limited to designated service center ❚ Choices limited

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3: PREFERRED PROVIDER ORGANIZATION ❚ Gatekeeper for utilization review ❚ Referral required ❚ Cost controlled ❚ Choices constrained

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3: EMPLOYER OPERATED COVERAGE ❚ Third party administrator (TPA) ❚ Voluntary employees’ beneficiary association (VEBA) ❚ Employer established trust fund ❚ Reduces health insurance costs

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3: COBRA ❚ Consolidated Omnibus Budget Reconciliation Act ❚ Provides insurance after employment ends for 18 months DeCenzo and Robbins HRM 7th Edition

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4: ERISA ❚ Employment Retirement Income Security Act ❚ Protect employee benefits programs ❚ Vesting rights ❚ Pension Benefits Guaranty Corporation ❚ Summary Plan Description DeCenzo and Robbins HRM 7th Edition

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5: RETIREMENT PROGRAMS ❚ Defined Benefits Plan ❚ Defined Contribution Plans ❙ Money Purchase Pension Plan ❙ Profit-Sharing Plan ❙ Individual Retirement Account ❙ Roth IRA ❙ AND….

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5: RETIREMENT PROGRAMS ❚ More Defined Contribution Plans ❙ ❙ ❙ ❙ ❙ ❙

401(k) 403(b) Keough (PAYSOP ESOP TRASOP – See Exhibit 12-4 DeCenzo and Robbins HRM 7th Edition

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6: PAID TIME OFF VACATION ❚ Length of service ❚ Job classification ❚ U.S. average 15 to 20 days ❚ Many industrialized countries 30 days ❚ Sell back to company ❚ Time to recharge and renew

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6: PAID TIME OFF HOLIDAY ❚ US - 10 days ❚ About average ❚ Mexico - 19 days ❚ Sick leave - often included with vacation and holiday “bank”

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7: PAID TIME OFF DISABILITY INSURANCE ❚ Short term ❙ Replacement income for time not worked ❙ Sick leave ❘ 45% used for illness ❘ Use it or lost it ❘ Well pay ❚ AND….

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7 PAID TIME OFF - DISABILITY INSURANCE ❚ Long term ❙ After short term coverage has expired ❙ 6 months ❙ Temporary < 24 months ❙ Permanent - unable to work in any occupation ❙ 60% income

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7: SURVIVOR BENEFITS

❚ Group Term Life Insurance ❚ Travel Insurance

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8: FAMILY-FRIENDLY BENEFITS ❚ CAFETERIA-STYLE CHOICES, SUCH AS ❚ Flextime ❚ Childcare ❚ Eldercare ❚ Flexible spending accounts ❚ AND… DeCenzo and Robbins HRM 7th Edition

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8: FAMILY-FRIENDLY BENEFITS ❚ Part-time employment ❚ Telecommuting ❚ Adoption benefits ❚ Parental leave

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9: FLEXIBLE SPENDING ACCOUNTS ❚ Pre-tax set aside ❚ Specific items, such as ❙ Dental ❙ Childcare ❙ Insurance

❚ $5000 ❚ Use it or lose it DeCenzo and Robbins HRM 7th Edition

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9: MODULAR PLANS

❚ Fixed option combinations ❚ Choose best for you

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9: CORE PLUS OPTIONS ❚ Required base (core) ❙ Vacation ❙ 40-1(k) ❙ Disability

❚ Choice of additional ❙ ❙ ❙ ❙

Health Additional vacation Tuition Flexible spending accounts

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REVIEW CHAPTER 12 ❚ Name a legally required benefit. ❚ What benefits are you going to ask about before you take a job? ❚ AND….

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REVIEW CHAPTER 12 ❚ Remember these terms? ❙ ❙ ❙ ❙ ❙ ❙

Vesting ERISA COBRA HMO PPO ESOP DeCenzo and Robbins HRM 7th Edition

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QUICK: REVIEW CHAPTER 12 ❙ ANSWER THESE QUESTIONS ON A SHEET OF PAPER. ❘ 1. THE MOST IMPORTANT THING WE DID IN CLASS TODAY _______. ❘ 2. I STILL HAVE QUESTIONS ABOUT___. ❘ 3. THE BEST THING ABOUT CLASS TODAY WAS _______________. ❘ 4. DON’T DO ____________ ANYMORE. • TURN THEM IN, PLEASE. NO NAMES. WE’LL TALK NEXT CLASS SESSION DeCenzo and Robbins HRM 7th Edition

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PREVIEW: CHAPTER 13 ❚ Find out when your employer had the most recent workplace injury. What was it? ❚ From the news, bring a report about a workplace injury to the next class session. ❘ Write up their responses for 1 extra point on your final grade. DeCenzo and Robbins HRM 7th Edition

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Exhibit 12-1: Major Employee Benefits Offered (percent of employers participating)

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Exhibit 12-2: Sample Health Maintenance Organization Coverage

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Exhibit 12-3: Sample Preferred Provider Organization (Point of Service) Coverage

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Exhibit 12-4: Other Retirement Plans

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Exhibit 12-5: Flexible Benefit Programs

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