Introduction To Legislation, Unions, And A Changing W 144723

Introduction1legislation Unions And A Changing Workforce Have Expand

Introduction 1 legislation, unions, and a changing workforce have expanded benefit offerings Employee Benefits have grown in importance and variety are typically membership-based rewards offered to attract and keep employees do not directly affect a worker’s performance, but inadequate benefits lead to employee dissatisfaction Introduction 2 Some of the benefits we enjoy today were established under Franklin Roosevelt’s New Deal as a response to the Great Depression-- most notably unemployment insurance and social security. To get a taste of this extraordinary time, watch benefit and service offerings add about 30% to an organization’s payroll cost benefits become the focus of negotiations with employees when large wage and salary increases are not feasible Introduction 3 Contemporary Benefits Offerings benefits today reflect a diverse workforce challenge -- designing a benefits package that is lawful and attractive social security unemployment compensation workers’ compensation FMLA meets legal requirements health insurance retirement plans time off disability life insurance attracts applicants and current workers Legally Required Benefits 4 Social Security financed by equal employee and employer contributions, based on a percentage of earnings provides income for retirees, disabled workers and surviving dependents provides some health insurance coverage through Medicare SS was never intended to be sole source of retirement income.

Watch: Legally Required Benefits 5 Unemployment Compensation funded by employers who pay combined federal and state tax imposed on taxable wage base tax varies based on organization’s unemployment experience: the more layoffs, the higher the rate provides employees with some income continuation during periods of involuntary unemployment typical coverage is for 26 weeks Requirements to Receiving Unemployment Benefits: involuntary loss of job (but not having been fired) must have worked a minimum number of weeks have applied to a state agency for unemployment have registered for available work are willing to accept any suitable job offered through the state agency Legally Required Benefits 6 Workers’ Compensation paid for by the organization rates based on likelihood of accidents, past history, and the type of industry benefits pay expenses and/or compensate for losses resulting from work-related accidents or illness, regardless of fault Legally Required Benefits 7 Family and Medical Leave Act requires employers with 50 or more employees to allow up to 12 weeks of unpaid leave for family or medical reasons specifies record-keeping and communication requirements employer must maintain health benefits.

Voluntary Benefits 8 Health Insurance increases in healthcare costs have made health insurance a critical benefit healthcare costs are growing faster than wages purpose is to protect employee from catastrophic loss should a serious illness occur The current debate over a public option for health insurance is heated. For the pros and cons, see: Voluntary Benefits 9 Traditional Health Insurance typically has the fewest coverage limitations for the employee usually the most expensive provides coverage in three areas: Some major traditional health insurers are: 1. hospitalizations 3. major medical 2. medical/surgical Voluntary Benefits 10 Health Maintenance Organizations (HMOs) alternative benefit required by Health Maintenance Act of 1973 broad comprehensive care provided by physicians who are “in network†employee incurs small copay health care choices significantly limited Major HMOs… Voluntary Benefits 11 Preferred Provider Organizations (PPOs) member health care providers agree to provide services at a fixed fee employees are encouraged by lower rates to use member or “preferred†providers combine best of HMOs and traditional insurance Point-of-Service Plans (POS) require primary care physicians employee can go out of network, but pays up front and seeks reimbursement herself Voluntary Benefits 12 Consumer-driven Health Plans high deductible health savings account support services help employees make decisions Employer-operated Coverage employers self-fund insurance programs operated under a Voluntary Employees Beneficiary Association (VEBA) to reduce costs often hire third party to administer Voluntary Benefits 13 Health Insurance Continuation The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides for continuation of benefits for up to three years after an employee leaves a job cost is paid by the employee The HIPAA Requirement The Health Insurance Portability and Accountability Act of 1996 imposed on employers and health providers regulations regarding the confidentiality of employee health information Retirement Benefits 14 Employee Retirement Income Security Act (ERISA) of 1974 vesting rights – right to pension benefits even if one leaves the company enables pension rights to be portable sets up Pension Benefit Guaranty Corporation (PBGC) claims corporate assets to cover inadequately funded pension plans requires Summary Plan Description (SPD) Retirement Benefits 15 Defined Benefit Plans plan specifies the dollar benefit workers receive at retirement usually based on some formula of years of service and average final compensation used more in government and unionized industries Retirement Benefits 16 Defined Contribution Plans employee and employer may contribute to account based on rules established for contributions amount of benefits depends on success of account investments money purchase pension plans profit-sharing plans IRAs 401Ks Retirement Benefits 17 Money Purchase Pension Plan type of defined contribution plan organization commits to depositing fixed amount of money or percentage of employee’s pay annually Profit-Sharing Plans variation of defined contribution plan company amount contributed depends on profit level in the organization contribution is optional, not required Retirement Benefits 18 Individual Retirement Accounts (IRAs) employer makes contributions can defer taxes on amount deposited and interest earned in retirement account two types exist for small businesses and self-employed 401(k)s: permit workers to set aside specified amount of income on tax-deferred basis employers may match employee contribution Paid Time Off 19 Vacation and Holiday Leave vacation time is usually related to the length of time on the job some companies also allow personal days that can be used for any reason Paid Time Off 20 Disability Insurance Programs provides salary continuation for: short-term disabilities (sick leave) long-term disabilities (coverage usually effective after 6 months) some companies provide financial incentives to employees to not use their sick leave long-term disability plans usually replace a portion of the employee’s salary, often 60% Survivor Benefits 21 Group Term Life Insurance benefit is usually based on one’s annual rate of pay supplemental insurance increases coverage to two to five-times the employee’s salary Travel Insurance life insurance for business travel-related deaths (not including normal commuting) Survivor Benefits 22 The Service Side of Benefits employee assistance programs credit unions housing tuition reimbursement uniforms company-paid transportation social and recreational events parking employers often can provide services at no cost or at a significant reduction from the usual cost An Integrative Perspective on Employee Benefits 23 These programs allow employees to choose which benefits they want and help to keep costs down.

Flexible Benefits An Integrative Perspective on Employee Benefits 24 Flexible Spending Accounts under Section I25 of the Internal Revenue Code employees can set aside a designated dollar amount before taxes for specified services such as health-care premiums medical expenses dependent child or elder care group legal services IRS requires that accounts for different purposes be separate and that all money be spent during the year or forfeited not subject to federal, state, and social security taxes An Integrative Perspective on Employee Benefits 25 Modular Plans employees choose a pre-designed package of benefits from several options Core-Plus Options Plans employees given core coverage (e.g. medical, life, disability) with option to select other benefits Let’s Play Jeopardy-style!

Paper For Above instruction

Employee benefits have become an integral part of modern organizational strategies, influenced by legislation, union advocacy, and shifts in workforce demographics. These benefits are not only designed to attract talent but also to retain and motivate employees, contributing to overall organizational productivity. Historically rooted in New Deal policies such as Social Security and unemployment insurance, employee benefits have expanded considerably to encompass a wide array of legally mandated and voluntary offerings that meet the diverse needs of a changing workforce.

Legally required benefits form the foundation of employee compensation packages and include Social Security, unemployment compensation, workers’ compensation, and the Family and Medical Leave Act (FMLA). Social Security, financed through contributions from both employees and employers, provides retirement income, disability benefits, and survivor benefits, although it was never intended as the sole source of retirement income (Social Security Administration, 2022). Unemployment compensation, funded through federal and state taxes imposed on employers, offers temporary income to eligible workers involuntarily laid off, with eligibility criteria including minimum employment periods and job seeking efforts (U.S. Department of Labor, 2023). Workers’ compensation, financed by employer premiums based on industry risk, offers medical expense coverage and wage replacement for work-related injuries, regardless of fault (Bureau of Labor Statistics, 2021). Similarly, the FMLA mandates employers with 50 or more employees to provide up to 12 weeks of unpaid leave for qualifying family or medical reasons, with the stipulation that health benefits are maintained during leave (U.S. Department of Labor, 2023).

Voluntary employee benefits have grown in importance, especially as healthcare costs rise. Health insurance, often considered the most critical voluntary benefit, safeguards employees from catastrophic health costs. Traditional health insurance plans typically include hospitalization, medical/surgical coverage, and major medical benefits (Kaiser Family Foundation, 2022). More flexible options such as Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Consumer-driven Health Plans (CDHPs) offer varying degrees of provider choice, cost-sharing, and coverage scope (Health Affairs, 2023). For example, HMOs provide broad preventive care through in-network providers at lower costs but limit provider choice, whereas PPOs allow out-of-network visits with higher out-of-pocket expenses (Berkowitz et al., 2023). CDHPs, coupled with Health Savings Accounts (HSAs), promote cost-conscious decision-making by employees while offering high deductibles and tax advantages (Rosenbaum & White, 2024). Additionally, employer-sponsored continuation coverage such as COBRA and HIPAA regulations facilitate extended health benefits following employment termination, at the employee’s expense (U.S. Department of Labor, 2023).

Retirement benefits have evolved significantly, with legislation like the Employee Retirement Income Security Act (ERISA) establishing minimum standards for pension plans and benefit portability (ERISA, 1974). Defined benefit plans specify a fixed pension amount, often based on years of service and final salary, typically used in government and unionized sectors (Munnell & Soto, 2021). Defined contribution plans, including 401(k)s, profit-sharing, and IRAs, allow employees and employers to contribute to individual accounts, with benefits depending on investment performance (Brown, 2022). These plans often include features like vesting rights, employer matching, and tax deferrals that promote long-term savings behavior (Munnell & Soto, 2021).

Paid time off benefits such as vacation, holidays, and sick leave support work-life balance and are usually linked to tenure and organizational policies. Disability insurance programs provide income replacement for short-term or long-term disabilities, often covering approximately 60% of salary, with longer-term coverage kicking in after an initial period (Bureau of Labor Statistics, 2021). Survivor benefits, including group term life insurance and travel insurance, offer financial security for dependents and coverage during business travel (Lazarus et al., 2022). Employers often supplement these with employee assistance programs, credit unions, tuition reimbursement, and social events, which foster a supportive workplace culture (Society for Human Resource Management, 2023).

Flexible benefits, such as Flexible Spending Accounts (FSAs), Modular Plans, and Core-Plus options, have gained prominence because they allow employees to tailor their benefits package according to individual needs and preferences while providing tax advantages (Internal Revenue Service, 2024). FSAs enable pre-tax contributions to cover healthcare, dependent care, and legal expenses, with strict spending deadlines. Modular plans offer a pre-selected bundle of benefits, whereas core-plus plans provide basic coverage with optional add-ons (Kaiser Family Foundation, 2022). This personalization enhances employee satisfaction and cost efficiency for organizations.

Executive compensation packages have also grown more complex, often including deferred bonuses, stock options, and perquisites such as company cars and club memberships. Such packages aim to align executive incentives with company performance but have attracted scrutiny concerning income disparity and excessive rewards (Conyon & He, 2023). Internationally, organizations managing expatriate packages must consider statutory requirements and cultural differences, often adopting a balance-sheet approach to determine appropriate compensation levels across countries (Huang & Mitev, 2021).

In conclusion, employee benefits are an essential component of strategic human resource management, evolving to meet both legal mandates and the diverse needs of a global workforce. They serve as powerful motivators, enhance job satisfaction, and support organizational competitiveness. As workforce demographics continue to shift and healthcare costs escalate, organizations are likely to innovate further in benefit offerings, emphasizing flexibility, personalization, and strategic alignment with business objectives.

References

• Berkowitz, M., et al. (2023). Comparing HMO and PPO Plans: Provider Networks and Cost Sharing. Health Affairs, 42(3), 391-399.
• Bureau of Labor Statistics. (2021). Workers’ Compensation Summary. U.S. Department of Labor.
• Conyon, M. J., & He, C. (2023). Executive Compensation: Trends and Regulatory Changes. Journal of Corporate Finance, 78, 102400.
• Huang, Y., & Mitev, N. (2021). International Compensation Management: A Balance-Sheet Approach. International Journal of Human Resource Management, 32(12), 2454-2472.
• Internal Revenue Service. (2024). IRS Guidelines on Flexible Spending Accounts. IRS.gov.
• Kaiser Family Foundation. (2022). 2022 Employer Health Benefits Survey. KFF.org.
• Health Affairs. (2023). An Overview of Consumer-Driven Health Plans. Health Affairs, 42(2), 180-189.
• Lazarus, R., et al. (2022). Survivor Benefits and Travel Insurance: A Comparative Analysis. Financial Services Review, 31(4), 415-429.
• Munnell, A. H., & Soto, M. (2021). The Future of Pension Plans. Journal of Pension Economics & Finance, 20(1), 1-20.
• Rosenbaum, S., & White, A. (2024). Cost-Controlling Strategies in Consumer-Driven Health Plans. Health Policy, 128, 102440.
• Social Security Administration. (2022). Fact Sheet: Social Security Programs. SSA.gov.
• U.S. Department of Labor. (2023). Employee Benefits Security Administration. DOL.gov.