DeCenzo and Robbins HRM 7th Edition CHAPTER 12 Employee Benefits DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition 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 DeCenzo and Robbins HRM 7th Edition

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

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

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? DeCenzo and Robbins HRM 7th Edition

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

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

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

DeCenzo and Robbins HRM 7th Edition 2: SOCIAL SECURITY Eligibility after 40 quarters Age 65 > Bankrupt by 2037??? DeCenzo and Robbins HRM 7th Edition

2: UNEMPLOYMENT COMPENSATION Without a job Registered for available work Worked a minimum number of weeks Purpose - no fault (layoff, plant closing) AND…. DeCenzo and Robbins HRM 7th Edition

2: UNEMPLOYMENT COMPENSATION Funds from state and federal tax $56 per employee with guidelines 26 weeks DeCenzo and Robbins HRM 7th Edition

2: WORKER’S COMPENSATION Job-related endeavors Comprehensive disability coverage Liability with company Cost born by organization Medical costs DeCenzo and Robbins HRM 7th Edition

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

3: TRADITIONAL HEALTH INSURANCE Expensive Most flexible Comprehensive Blue Cross - hospital Blue Shield - provider DeCenzo and Robbins HRM 7th Edition

3: HEALTH MAINTENANCE ORGANIZATION Preventive care Controlled costs Care limited to designated service center Choices limited DeCenzo and Robbins HRM 7th Edition

3: PREFERRED PROVIDER ORGANIZATION Gatekeeper for utilization review Referral required Cost controlled Choices constrained DeCenzo and Robbins HRM 7th Edition

3: EMPLOYER OPERATED COVERAGE Third party administrator (TPA) Voluntary employees’ beneficiary association (VEBA) Employer established trust fund Reduces health insurance costs DeCenzo and Robbins HRM 7th Edition

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

DeCenzo and Robbins HRM 7th Edition 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

DeCenzo and Robbins HRM 7th Edition 5: RETIREMENT PROGRAMS Defined Benefits Plan Defined Contribution Plans Money Purchase Pension Plan Profit-Sharing Plan Individual Retirement Account Roth IRA AND…. DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition 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

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 DeCenzo and Robbins HRM 7th Edition

6: PAID TIME OFF - HOLIDAY US - 10 days About average Mexico - 19 days Sick leave - often included with vacation and holiday “bank” DeCenzo and Robbins HRM 7th Edition

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…. DeCenzo and Robbins HRM 7th Edition

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 DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition 7: SURVIVOR BENEFITS Group Term Life Insurance Travel Insurance DeCenzo and Robbins HRM 7th Edition

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

8: FAMILY-FRIENDLY BENEFITS Part-time employment Telecommuting Adoption benefits Parental leave DeCenzo and Robbins HRM 7th Edition

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

DeCenzo and Robbins HRM 7th Edition 9: MODULAR PLANS Fixed option combinations Choose best for you DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition 9: CORE PLUS OPTIONS Required base (core) Vacation 40-1(k) Disability Choice of additional Health Additional vacation Tuition Flexible spending accounts DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition REVIEW CHAPTER 12 Name a legally required benefit. What benefits are you going to ask about before you take a job? AND…. DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition REVIEW CHAPTER 12 Remember these terms? Vesting ERISA COBRA HMO PPO ESOP DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition 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

DeCenzo and Robbins HRM 7th Edition 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

DeCenzo and Robbins HRM 7th Edition Exhibit 12-1: Major Employee Benefits Offered (percent of employers participating) DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition Exhibit 12-2: Sample Health Maintenance Organization Coverage DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition Exhibit 12-3: Sample Preferred Provider Organization (Point of Service) Coverage DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition Exhibit 12-4: Other Retirement Plans DeCenzo and Robbins HRM 7th Edition

DeCenzo and Robbins HRM 7th Edition Exhibit 12-5: Flexible Benefit Programs DeCenzo and Robbins HRM 7th Edition