MANA 3320 16th Edition Lecture 18 Outline of Last Lecture I Flexible Benefits Plan II ERISA Employee Retirement Insurance Security Act III 6 Employee Benefits required by Law Outline of Current Lecture I 6 Employee Benefits required by Law continued II 5 Discretionary Employee Benefits III Types of Pension Plans IV 401K Savings Plan V Other Benefits Current Lecture 6 Employee benefits required by law o o o 1 Social Security Insurance National retirement program 1935 Only people who contribute to social security can collect social security when they retire First amendment women who didn t contribute could collect 60 of social security Can only collect at 100 if you meet the 40 quarters rule Amended again only can get 100 of SS until you re 67 might raise it to 70 2 Unemployment insurance Part of Social Security Act considered unfunded federal mandate Have 50 definitions of unemployment from each state Each company pays unemployment insurance tax All unemployment checks is taxable income can collect checks for 2 years 3 Workers compensation insurance There is no federal compensation law but each state has their own These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute o o 4 COBRA insurance Consolidated Omnibus Budget Reconciliation Act States that if an employee is terminated or laid off then we can ask the company to keep them on the medical insurance plan so the employee can pay the lower premium can last for 36 months 5 Benefits Provided by Patient Protection and Affordable Care Act PPACA o Known as Obamacare has 5 major provisions 1 Allows parents to keep children on their insurance until 26 2 Illegal for any medical insurance copay or deductibles for preventative care 3 Made it illegal for insurance companies to have lifetime dollar limits 4 Made it illegal for insurance companies to deny people with preexisting conditions 5 All benefits can apply to employees working 30 hours per week 6 Benefits Provided under the Family and Medical Leave Act FMLA Allows workers to take up to 12 weeks off per year for a qualifying condition Qualifying conditions can be Companies can be self insured Serious health condition Birth of a child Adopted children Take care of immediate family member 75 of employees that are eligible for FMLA don t use it 5 Discretionary Employee Benefits o 1 Health Care benefits Medical benefits Dental optical and mental health benefits Value based health initiatives Wellness programs o o o Disease management programs Employee assistance programs Counseling services 2 Payment for Time not Worked Vacation with pay Paid holidays Sick leave Sabbaticals Severance pay 3 Supplemental unemployment benefits Only offered in unionized companies Management agreed the difference between unemployment benefits and their normal paycheck while they were forced to be idle when plant shut down 4 Life insurance o 5 Long term disability insurance Cheapest type of insurance for companies Long term disability is over 6 months Types of Pension Plans o o o Contributory plan Contributions to a plan are made jointly by employees and employers Available to all employees when you re hired on Doesn t have any vesting requirements social security is a type of contributory plan Noncontributory plan Contributions to a plan are made solely by the employer Have vesting requirements determined by the company Can be as short as 5 years or as long as 10 years Defined benefit plan o The amount an employee is to receive upon retirement is specifically set forth Protected under ERISA if the company fails then the pension plans are still paid fully Defined contribution plan The basis amount an employer contributes to the pension fund is specified Provides no protection Ex profit sharing plans 401K savings plans o Not covered by ERISA because it is not retirement plans Other benefits o o Employee Assistance Programs Used to be for alcoholics Now can include drug abuse Counseling services o Family counseling tax advice psychological counseling Child and elder care