Chapter 13 - Employee benefits. In this chapter, the learning objectives are: Discuss the growth in benefits costs and the underlying reasons for that growth, explain the major provisions of employee benefits programs, discuss how employee benefits in the United States compare with those in other countries, describe the effects of benefits management on cost and workforce quality,. | Chapter 13 Employee Benefits Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Benefit Programs 13- Social Security Social Security provides old-age insurance, unemployment insurance, survivors' insurance, disability insurance, hospital insurance and supplementary medical insurance. Social Security retirement benefits are free from federal tax and free from state tax in some states. Full benefits begin at age 65 or a reduced benefit at 62. Both employers and employees are assessed payroll tax. Eligibility age for benefits and tax penalty for earnings influence retirement decisions. 13- Unemployment Insurance 4 Objectives of Unemployment Insurance: offset lost income during involuntary unemployment help unemployed workers find new jobs provide incentive for employers to stabilize employment preserve investments in skills by providing workers with income during short-term layoffs No state imposes the same tax on every employer. Unemployed workers are eligible for benefits if they have a prior attachment to the workforce are available and actively seeking work were not discharged for cause, did not quit voluntarily and are not out of work because of a labor dispute. 13- Private Group Insurance Offered at employer’s discretion; plans not legally required. 2 major types: medical insurance and disability insurance. Medical insurance-most important benefit; most full-time employees get such benefits. Disability insurance includes short-term and long-term plans. Group rates are lower because of economies of scale, ability to pool risks and greater bargaining power of a group. Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to permit employees to extend health insurance coverage at group rates for up to 36 months following a qualifying event, such as termination. 13- Family-Friendly Policies Family and Medical Leave Act requires . | Chapter 13 Employee Benefits Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Benefit Programs 13- Social Security Social Security provides old-age insurance, unemployment insurance, survivors' insurance, disability insurance, hospital insurance and supplementary medical insurance. Social Security retirement benefits are free from federal tax and free from state tax in some states. Full benefits begin at age 65 or a reduced benefit at 62. Both employers and employees are assessed payroll tax. Eligibility age for benefits and tax penalty for earnings influence retirement decisions. 13- Unemployment Insurance 4 Objectives of Unemployment Insurance: offset lost income during involuntary unemployment help unemployed workers find new jobs provide incentive for employers to stabilize employment preserve investments in skills by providing workers with income during short-term .
