DeCenzo and Robbins HRM 7th Edition1 CHAPTER 12 Employee Benefits.

DeCenzo and Robbins HRM 7th Edition

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CHAPTER 12

Employee Benefits


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CHAPTER 12 TOPICS:

1: Goals of employee benefits 2: Legally required benefits 3: Health insurance options 4: ERISA 5: Retirement programs 6: Vacation benefits 7: Disability insurance 8: Family-friendly benefits 9: Flexible benefits


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1: WHY EMPLOYEE BENEFITS??

Necessary part of compensation program

Attract and retain workers

Don’t affect performance

Workforce demographics


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1: COSTS OF PROVIDING EMPLOYEE BENEFITS

40% more for payroll

Most increases due to health insurance premiums

FlexibleNegotiable when

hired


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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 familiesSomething of value

for everyoneLegally requiredDifferentiate

workplace for desired employees


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2: LEGALLY REQUIRED BENEFITS

Social SecurityUnemployment

CompensationWorker’s

CompensationFamily and Medical

Leave Act


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2: SOCIAL SECURITY

Retirement, disability, survivor

Paid by government

Health insurance through Medicare

Payroll deduction (12.4%)

AND….


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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 jobRegistered for

available workWorked a minimum

number of weeksPurpose - 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 endeavorsComprehensive

disability coverageLiability with

companyCost born by

organizationMedical costs


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3: HEALTH INSURANCE

Traditional Health Insurance

Health Maintenance Organization

Preferred Provider Organizations

Employee-Operated Coverage

COBRA


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3: TRADITIONAL HEALTH INSURANCE

ExpensiveMost flexibleComprehensiveBlue Cross -

hospitalBlue Shield -

provider


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3: HEALTH MAINTENANCE ORGANIZATION

Preventive careControlled costsCare limited to

designated service center

Choices limited


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3: PREFERRED PROVIDER ORGANIZATION

Gatekeeper for utilization review

Referral requiredCost controlledChoices

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


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4: ERISA

Employment Retirement Income Security Act

Protect employee benefits programs

Vesting rightsPension Benefits

Guaranty CorporationSummary Plan

Description


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5: RETIREMENT PROGRAMS

Defined Benefits PlanDefined 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


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6: PAID TIME OFF - VACATION

Length of service Job classificationU.S. average 15 to 20

daysMany industrialized

countries 30 daysSell back to companyTime to recharge and

renew


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6: PAID TIME OFF - HOLIDAY

US - 10 daysAbout averageMexico - 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 leave45% used for illnessUse it or lost itWell 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

FlextimeChildcareEldercareFlexible spending

accountsAND…


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8: FAMILY-FRIENDLY BENEFITS

Part-time employment

TelecommutingAdoption benefitsParental leave


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9: FLEXIBLE SPENDING ACCOUNTS

Pre-tax set asideSpecific items,

such as Dental Childcare Insurance

$5000Use it or lose it


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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


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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


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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.


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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

DeCenzo and Robbins HRM 7th Edition1 CHAPTER 12 Employee Benefits.

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