3-1

REGULATING EMPLOYEE BENEFITS McGraw-Hill/Irwin Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3

3-3 MANDATORY BARGAINING SUBJECTS Unions & Employers Must Negotiate Supplemental Disability Pay Health Insurance Paid Time - Off Pension & Retirement Plans

3-4 PERMISSIVE BARGAINING SUBJECTS Administration of Funds Retiree Health Care Benefits Workers' Compensation (Within State Comp. Laws)

3-5 ILLEGAL BARGAINING SUBJECTS Standards for Employee Benefits Plans Minimum Participation Standards Minimum Vesting Standards Benefit Accrual Standards

3-6 KEY EMPLOYEES Officer Making $130,000 5% Owner 1% Owner Making Over $150,000

3-7 HIGHLY COMPENSATED EMPLOYEES Makes $90,000 5% Owner Was a Top - Paid Employee Last Year

3-8 FLSA COVERAGE Minimum Wage Overtime Pay Child Labor Private Sector & Federal Employees Businesses in Interstate Commerce Employers Earning $500,000+

3-9 PORTAL - TO - PORTAL ACT Defines Work Hours as –Time Spent for the Employer’s Benefit –Employer Controlled Amount of Time –Employer Aware of Time Spent on Task –Employer Requested Extra Time –Time Spent was Vital Regular to Task

3-10 COMPENSABLE NON – WORK TIMES Clean - Up Time Preparation Time Travel Time Between Jobs Rest Periods (20 min.) Meal Periods

3-11 ERISA COVERS Medical Insurance Life Insurance Disability Programs Pension Programs

3-12 ERISA DOES NOT COVER Government Plans Church Plans Workers‘ Compensation Plans Top Hat Plans Plans Maintained Outside the USA for Nonresident Aliens

3-13 ERISA PURPOSES Pension Plans were Unregulated Insures Information on Benefits Sets Standards of Conduct Sets Adequate Funding Standards Safeguards Benefits if Plan is Terminated Protects Employees Rights

3-14 ERISA TITLES Title I: Specifies Protections Title II: Taxation Title III: Administration & Enforcement Title IV: Pension Programs & PBGC

3-15 ERISA TITLE I PROVISIONS Reporting and Disclosure Vesting & Participation Standards Funding Fiduciary Responsibilities Administration & Enforcement Continuation Coverage Group Health Plan Requirements

3-16 ERISA TITLE I, PART 2 PARTICIPATION & VESTING Must be Over 21, with 1 Year Service Vesting = Nonforfeitable Rights to Benefits Full Vesting Cliff Vesting Gradual Vesting Breaks In Service Vesting Rights

3-17 FIDUCIARY RESPONSIBILITIES Fiduciaries Manage Plans –By Using Care, Skill, & Diligence –By Diversifying Investments to Minimize Risk –By Adhering to Plan & ERISA Guidelines

3-18 ERISA TITLE II AMENDMENTS TO IRC Participation Vesting Minimum Funding Standards Nondiscrimination of Coverage Contributions and Benefits Limits IRA & Keogh Plans

3-19 COBRA Covers –Private Sector Employees –State & Local Government Employees with 20+ Employees Exempt –Federal Government Employees –Church Employees

3-20 QUALIFYING EVENTS Death of Covered Employee Termination or Reduction in Hours Divorced or Legal Separation Dependent Child Loses Eligibility Employee Eligible for Medicare

3-21 HIPAA PROVISIONS Guarantees Access to Health Insurance Coverage Sets Pre - Existing Conditions Limits Allows Coverage from Former Plan Towards Pre - Existing Conditions Limits Use of Health Care Information

3-22 HIPPA CONDITIONS Health Status Medical Condition Claims Experience Receipt of Health Care Medical History Genetic Information Evidence of Insurability

3-23 EQUAL EMPLOYMENT OPPORTUNITY LAWS Equal Pay Act (1963) Title VII of Civil Rights Act (1964) Age Discrimination in Employment Act (1967) Pregnancy Discrimination Act (1978) Americans with Disabilities Act (1991) Civil Rights Act (1991)

3-24 EQUAL PAY ACT Amendment to Minimum Wage Provisions of FLSA Enacted Because of Employment Discrimination Problems Compensable Factors –Skill –Effort –Responsibility –Working Conditions

3-25 ADEA COVERAGE Private Sector Employers with 20+ Employees State & Local Government Most Employee Agencies Labor Unions with 25+ Members

3-26 CIVIL RIGHTS ACT OF 1991 RELEVANCE Overturns Supreme Court Ruling in Lorance Vs. AT&T Technologies Employees can Challenge Seniority Systems within 180 Days Employees can File Suit if Seniority System Affects them, or when Implemented