Payroll Is Usually The Largest Expense For A Company Followi

Payroll Is Usually The Largest Expense For A Company Following Next A

Payroll is usually the largest expense for a company. Following next are employee benefits expenses. While salaries have been flat in recent years, benefits expenses have risen dramatically. Review and conduct academic research on the most popular voluntary benefits. In a 2-3 page report, prepared in APA style with at least two references, do the following: Select a popular voluntary benefit that you would like to learn more about Research the history of this benefit and what would be a typical plan structure Give your opinion on the value of this benefit as an employee satisfier.

Paper For Above instruction

Employee benefits are a crucial component of compensation packages that significantly influence employee satisfaction, retention, and morale. Among them, voluntary benefits have grown in popularity due to their flexibility and ability to meet diverse employee needs. This paper explores the voluntary benefit of Employer-Sponsored Flexible Spending Accounts (FSAs), examining its historical development, typical plan structure, and its perceived value as an employee satisfier.

Flexible Spending Accounts (FSAs) are employer-established benefit plans that allow employees to set aside pre-tax income to pay for eligible healthcare and dependent care expenses. Originally introduced as part of the Revenue Act of 1978, FSAs gained popularity during the 1980s as a tax-efficient way for employees to manage out-of-pocket expenses (Internal Revenue Service [IRS], 2020). The concept was rooted in the desire to provide employees with more control over their benefits while offering tax advantages, thus reducing the financial burden of essential but often unpredictable costs.

A typical FSA plan structure involves an annual employer and employee agreement on the contribution amount, which is often deducted from the employee’s paycheck in equal installments. Employees can use these funds for qualified expenses such as medical copayments, prescription drugs, dental costs, and vision care. Unlike Health Savings Accounts (HSAs), FSAs generally have a "use-it-or-lose-it" policy, which mandates employees use the allocated funds within the plan year, though some plans offer a limited rollover or grace period (IRS, 2020). Employers typically provide comprehensive plan documentation outlining eligible expenses, contribution limits, and claims procedures.

The value of FSAs as an employee satisfaction tool is substantial. First, the tax savings associated with pre-tax contributions significantly reduce the net cost of healthcare and dependent care expenses, yielding immediate financial benefits for employees (PayScale, 2021). Second, FSAs offer a level of flexibility, empowering employees to manage their expenses proactively. Additionally, the availability of FSAs signals employer support for employee well-being, potentially fostering loyalty and a positive work environment.

However, the "use-it-or-lose-it" feature has been a point of contention, often leading employees to underestimate their expenses or delay claims until the deadline. Despite this limitation, many organizations now include rollover provisions or extended plan periods to mitigate this drawback. Overall, FSAs are highly valued by employees who seek tax-efficient ways to manage healthcare costs, making them a significant voluntary benefit that enhances job satisfaction and perceived employer caring.

References

• Internal Revenue Service (IRS). (2020). Publication 502: Medical and Dental Expenses. https://www.irs.gov/publications/p502
• PayScale. (2021). What Are Flexible Spending Accounts (FSAs)? https://www.payscale.com/compensation-data-benefits/flexible-spending-accounts
• Kaiser Family Foundation. (2022). Employer Health Benefits Survey. https://www.kff.org/report-section/employer-health-benefits-2022-section-1-introduction/
• Society for Human Resource Management. (2021). Voluntary Benefits: Trends and Employee Preferences. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/default.aspx
• Higgins, I., & Changka, B. (2019). The Role of Voluntary Benefits in Employee Satisfaction. Journal of Human Resources Management, 10(2), 45-59.