Prentice Hall, Inc. © A Human Resource Management Approach STRATEGIC COMPENSATION Prepared by David Oakes Chapter 10 Legally Required Benefits

Prentice Hall, Inc. © Legally Required Benefits  Social Security  Workers’ Compensation  Family & Medical Leave

Prentice Hall, Inc. © Social Security Programs  Unemployment insurance  Old Age, Survivor, and Disability Insurance (OASDI)  Medicare

Prentice Hall, Inc. © Unemployment Insurance  Unemployment not worker’s fault  States administer within federal guidelines  States send money to federal government  Agriculture & domestic workers are exempt

Prentice Hall, Inc. © Unemployment Eligibility  Did not leave job voluntarily  Able and available for work  Actively seeking work  Has not refused suitable work  Not off due to labor dispute  Not fired for gross work violations

Prentice Hall, Inc. © OASDI  Old Age, Survivor, and Disability Insurance  Enacted in 1935, for retirement  Survivors’ insurance added 1939  Disability insurance added 1965

Prentice Hall, Inc. © OASDI Exemptions  Civilian f ederal workers  Railroad employees (before 1984)  State & local government workers  Children  Under 21, if working for a parent  Unless over 18, working in the family’s business

Prentice Hall, Inc. © OASDI Retirement Requirements  Earn 40 quarters of credit, or  Be employed for 10 years  Be age 62 for partial benefits  Be age 65 for full benefits  In 2022, be age 67

Prentice Hall, Inc. © OASDI Survivor’s Benefits  Based on Eligibility Status & Relationship  Deceased was fully insured  Dependent, unmarried children  Widow(er) age 60 +  Dependent parent age 62 +

Prentice Hall, Inc. © Disability Benefits  Worker was fully insured  Meets Social Security work requirements  Varies according to age & disability  Disability must last 1 year or be terminal  6 Months waiting period

Prentice Hall, Inc. © Medicare  For citizens age 65 +  Provided insurance coverage for  Hospitalization  Convalescent care  Major doctor bills  Prescription drug costs

Prentice Hall, Inc. © Medicare Options  Part A  Part B  Medigap  Medicare Advantage (Part C)  Prescription Drug Program

Prentice Hall, Inc. © Medicare Part A  Covers inpatient & outpatient hospital care & services  Provides unlimited in-home care  Participants  Social security beneficiaries  Retirees  Voluntary enrollees  Disabled  Employer & employee financed

Prentice Hall, Inc. © Medicare Part B  Voluntary supplementary medical insurance  $110 deductible, then covers 80%  Financed by government & enrollees  Participants  Part A enrollees  Those on social security  Railroad retirees

Prentice Hall, Inc. © Part B Coverage  Diagnosis, therapy, surgery  Consultations  Medical services & supplies  Medications not self administered  Outpatient hospital services  Home health services

Prentice Hall, Inc. © Medigap  Supplements Parts A & B  Through private insurers  10 standardized choices  Medicare Select Option  Lower premiums for fewer choices  Not offered in all states

Prentice Hall, Inc. © Medicare Advantage  Medicare + Choice, Part C  Established through Balanced Budget Act of 1997  Alternative to Parts A & B  Options  Fee-for-services  Managed care plans  Medical savings accounts

Prentice Hall, Inc. © Medicare Prescription Drug Program  Part D  Covers 75% after $250 deductible up to $2,250  Cover 95% after $3,600 out-of-pocket  Employer subsidy for similar plan

Prentice Hall, Inc. © Workers’ Compensation  State compulsory disability laws  Enacted in 1911  Employer liable regardless of fault  Maritime, federal civilian, domestic agriculture, & small business workers not covered

Prentice Hall, Inc. © Objectives  Provide income & medical benefits  Reduce litigation  Relieve charities’ financial drain  Eliminate legal fees & time  Encourage employer safety  Promote accident study & avoidance

Prentice Hall, Inc. © NCSWCL Obligations  Take initiative in administration  Review performance & adjust  Inform workers & insure payment  Inform providers & employers  Resolve disputes  Adjudicate unresolved claims

Prentice Hall, Inc. © Workers’ Compensation Claims  Injury  Occupational disease  Death

Prentice Hall, Inc. © Workers’ Compensation Benefits  Medical services  Disability income  Death benefits  Rehabilitative services

Prentice Hall, Inc. © FMLA Benefits  12 weeks of unpaid leave for  Birth, adoption, foster care  Serious family medical problems  Worker’s serious medical problem  Retention of  Seniority  Health insurance coverage  Credit for previous service  Accrued retirement benefits