Managing Employee Benefits

1
Managing Employee Benefits

• Benefits an indirect reward given to an
  employee or group of employees as part of
  organizational membership.
• Types Mandatory Voluntary
• Strategic Perspective Needed to offer
  competitive compensation packages to compete in
  tight labor markets aging workforce places
  greater demands on employers to monitor costs
  dual-career couples and single-parent families
  work family issues becoming more important.

2
Legal Issues

• Workers Compensation
• Unemployment Compensation
• Social Security
• Family Medical Leave Act
• COBRA
• Age Discrimination ADEA OWBPA
• ERISA
• HIPPA

3
Administration Issues

• Communication important that employees have
  more understanding of the entire benefits program
  and its economic value. Use of Benefits
  Statements shows the dollar value of the
  benefits provided HRIS
• Flexibility allowing employees to select
  benefits they prefer from a group of benefits
  offered by the employer.

4
Family Medical Leave Act (FMLA)

• Covers employers with 50 or more employees who
  live within 75 miles of the workplace
• Employee coverage must have worked at least 12
  months 1,250 hours in the previous year
• Employer must allow eligible employees to taker a
  total of 12 weeks unpaid leave during any 12
  month period for one or more of the following
• Birth, adoption, or foster-care placement of a
  child
• Caring for spouse, child, or parent with a
  serious health condition
• Serious health condition of the employee

5
FMLA

• A serious health condition one requiring
  inpatient, hospital, hospice, or residential
  medical care, or continuing physician care.
• Employee Privileges
• Must be able to return to the same job or a job
  of equivalent status or pay
• Health benefits must be continued during the
  leave
• Leave may be intermittent
• May be required to use all paid-vacation and
  personal leave before taking FMLA leave
• 30 day notice, where practical

6
Health Care Regulation Cost

• Regulation COBRA mandates that employers with
  20 or more employees offer extended health-care
  coverage to voluntary or involuntary quits,
  widowed or divorced spouses and dependent
  children of former or current employees, retirees
  and their spouses whose health care coverage
  ends.
• HIPPA minimizes problems associated with
  preexisting conditions when changing jobs.

7
Controlling Health Care Costs

• Managed Care consists of approaches that
  monitor and reduce medical costs using
  restrictions and market system alternatives.
  Plans emphasize primary preventative care, use
  of specific providers, place restrictions on
  certain kinds of treatment.
• Preferred Provider Organizations (PPOs)
• Health Maintenance Organizations (HMOs)
• Co-payments Utilization Review
• Wellness Communication Programs

8
Retirement Benefits

• Legal Issues
• Age Discrimination in Employment Act (ADEA)
  Older Workers Benefit Protection Act (OWBPA)
  main affects Early Retirement sets specific
  criteria that must be met when older workers sign
  waivers promising not to sue for discrimination.
• Financial Accounting Standards Board (FASB) Rule
  106 requires that firms establish accounting
  reserves for funding retiree health-care benefits
• Social Security Payroll Taxes 15.3 - 7.65
  each.
• Employee Retirement Income Security Act (ERISA)

9
Retirement Benefit Terminology

• Pensions
• Contributory employer and employee fund plan
  Noncontributory employers fund plan
• Defined-contribution plan employer makes annual
  payments benefits based upon total
  contributions investment returns on
  contributions
• Defined-benefit plan pension amount based on
  age length of service
• Vesting the right to receive benefits
  determined by length of service
• Portability freedom to transfer pension plans
  between employers.

10
Security Benefits

• Workers Compensation provides benefits to
  persons injured on the job. State law
  requirements employees give up right of tort
  actions against employers in exchange for
  benefits. Cost increases have been dramatic in
  many states.
• Unemployment Compensation Funding based on
  payroll tax on the first 7,000 of annual earning
  of each employee. Tax is experienced rated for
  employers based on number of claims filed by
  workers who leave a particular employer.