focus on Chapter 11: Benefits, and we examine strategic benefits offerings that attract and retain employees.
Benefits are non-wage compensation or rewards given to employees. Some benefits are mandatory–required by law–such as workers’ compensation in case of employee injury on the job. Some benefits are customary–voluntary benefits offered at the discretion of the employer which are typical and expected in many industries–like health insurance or retirement plans, vacation or sick leave. Customary benefits are not required, but are so common in some industries as to be expected. Still other benefits are optional–discretionary, creative or innovative offerings tailored to the employee demographic and the company, such as student debt assistance, employee assistance programs, concierge services, free food, discounted products, flexible scheduling, and others.
When salary budgets are tight, or when the hiring market is competitive, providing better benefits than competitors can help organizations attract and retain top employees.
Large employers offering complex benefits will typically have a human resource department that administers those programs, or it will outsource benefit management to one of the many vendors offering administration services. There are many good-paying jobs in the benefits administration industry which you can explore further on O*Net if you are interested.
A manager’s role with regard to benefits is to recognize the strategic importance of them, to help communicate benefits options to employees, leverage benefits to make the best hires you can attract, analyze and advocate for creative or other innovative benefits that may enhance productivity of your work group, and to help the organization realize a return on investment (ROI) from its benefits programs.
In some cases, federal and state laws regulate administration of benefits. Retirement plans, even if offered by employers, were not always secure. The Employee Retirement Income Security Act (ERISA) was signed into law by President Gerald Ford in 1974 to regulate and safeguard the establishment, operation, and administration of private retirement plans.
Employee pensions had very few protections under the law before ERISA. Employees might be promised a pension only to find that it was not sufficiently funded or that all or most of their benefits were lost when the plan was terminated or the plan sponsor went bankrupt or was sold. Many plans had very long vesting schedules requiring 20 to 30 years of service. Some plans required employee service periods to be “uninterrupted,” so that a short, involuntary leave (because of, for example, a layoff or temporary disability) in the middle of a 35-year career was sufficient to lose all benefits. Companies reportedly terminated employees a few months before vesting to avoid having to pay their pension benefits.
ERISA requires employers and plans to regularly provide participants with information about plan features and funding, vesting, benefit accrual. It requires plans to act in a “fiduciary” capacity, a status we will explore in this unit.
We research the evolution of employer-offered health coverage and further inform ourselves about the current health insurance debate. In a system of health insurance tied to employment which leaves employees in precarious coverage situations if their job is terminated, Congress enacted protections such as the Consolidated Omnibus Budget Reconciliation Act (COBRA), a mandatory benefit that allows employees to continue their health coverage, at their sole expense. There are pros and cons for employees which we will investigate in this unit as we briefly examine the law.
OBJECTIVES-Unit 11
After reading Chapter 11, students will be able to identify mandatory, customary, and optional benefits, give examples of each type, and explain why organizations offer them;
Correctly identify challenges in communicating benefits information to employees;
Describe the internal and external influences that affect organizations’ benefits decisions.
Describe and discuss the role of benefits in being named to Fortune and Glassdoor’s “Top 100 Companies To Work For”.
Explain the pros and cons of COBRA from an Employee point of view.
Research and discuss the history and evolution of employer-paid health insurance in the United States.
REQUIRED READING, WATCHING, RESEARCHING-Unit 11
Read: Chapter 11: Benefits, HRM Core Concepts, by Jean Phillips.
Watch: “HR Basics: Employee Benefits” ( about 8 min) and “Employee Benefits: 10 Things You Need to Know videos (about 2 min). See Media Gallery, videos tagged “Unit 11”. For aural learners, the first video supplements the chapter information with regard to mandatory and customary or voluntary benefits. The second video is educational for employees or job applicants to explore benefits offerings as part of total compensation or total rewards.
Research: the best places to work compiled by Fortune and Glassdoor (links below). Identify two companies you are interested in exploring and examine the role of benefits in being designated as a best place to work, you will discuss customer, creative or innovative benefits your companies offer. Do not focus on mandatory benefits.
https://fortune.com/best-companies/ Links to an external site. and https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm Links to an external site.
Research: the history of employer-offered health insurance in the United States AND the typical cost of COBRA in your industry of choice (you can choose an industry you expect to work in, or research the cost in general); you will discuss the following issues:
How did health insurance become a customary benefit offered by U.S. employers, and why?
Explain the reasons that some employers or industries offer health insurance, and others do not. (May refer to your text here, or other sources).
If I am terminated from my job (voluntarily or involuntarily), I can exercise my right to COBRA benefits to maintain health insurance coverage. Describe the pros and cons of COBRA from an Employee point of view. Can you find any information on the typical cost of COBRA? What is it?
Discussion: after you’ve completed the required research on employer sponsored health insurance See Required Reading Unit 11. This discussion post will take a variable amount of time. 10 pts.
Write a post that addresses the following questions. Most questions may be answered sufficiently in a sentence or two, a paragraph at the most:
How did health insurance become a customary benefit offered by U.S. employers, and why?
Explain the reasons that some employers or industries offer health insurance, and others do not. (May refer to your text here, or other sources).
If I am terminated from my job (voluntarily or involuntarily), I can exercise my right to COBRA benefits to maintain health insurance coverage. Describe the pros and cons of COBRA from an Employee point of view. Can you find any information on the typical cost of COBRA? What is it?