Private Retirement Plan
It is necessary that managers and supervisors have a thorough understanding of the legal obligations relative to our benefits and rewards programs here at Forward Style, Inc, Authors Noe, Hollenbeck, Gerhart & Wright have noted that the heavy involvement of government in benefits decisions reflects the central role benefits play in maintaining economic security (Noe, Hollenbeck, Gerhart & Wright, 2008, p. 561). For this purpose I am offering an evaluation of our current programs as well as the legal requirements that must be adhered to.
Private retirement plan
In offering private retirement, it is not a requirement of law to offer this rewards program to employees; however, employers are required to meet certain standards that align with …show more content…
the Employment Retirement Income Security Act (ERISA). These standards align with that obligates employers to describe the plans, funding, eligibility requirements, as well as risks, within 90 days after an employee has entered the plan. The Act was established in 1974 and is a “federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans” (US Department of Labor, 2010). Employers usually offer private retirement plans to offset an individual’s social security plans. This is done in the form of IRA accounts as well as 401K. Employers will often match the employee’s investment at a specified rate. The employer is required to give a summary plan description (SPD) under ERISA.
Medical Insurance
There are no state or federal requirements that employers must offer medical insurance to its employees.
However, “health benefits are a critical part of any compensation package and disability benefits are, in turn, an important part of health benefits (MacDonald, 2006). Medical insurance is usually offered in the form of hospital, dental, mental health and disability insurance. Although not required by law to offer medical insurance, employers are required to offer extended plans to employees in the event of termination of their employment. This plan was established in 1985 called the (Consolidated Omnibus Budget Reconciliation Act otherwise known as COBRA. The plan requires employers to permit employees to extend their health insurance coverage at group rates for up to 36 months following a “qualifying event” such as termination (except for gross misconduct), a reduction in hours that leads to the loss of health insurance, death, and other events (Noe et al., 2009, p. …show more content…
569).
Disability insurance
Disability income is typically two-thirds of predisability earnings, although each state has its own minimum and maximum.
In contrast to unemployment insurance benefits, disability benefits are tax free (Noe et al., 2009, p. 567). Disability income usually is paid on either a short-term or long-term basis. The rate of salary replacement usually will run between 50 and 70 percent. Employees must first use their short-term disability which usually equals six months or less. Once employees have exhausted short-term disability they will more toward long-term disability which is usually paid by social security. The benefit here is not so much to the employer, but the contributing employee whose federal tax would be fixed.
Social insurance, including social security, unemployment insurance, worker’s compensation
Social security is part of the retirement package that has been set forth by the U.S. government. The Act was established August 14, 1935 to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes (National Center,
2010).
It is a financial benefit that individuals are able to take advantage of at age 65. Employers are required to pay a percentage of the employee’s income as investment in social insurance programs which also includes unemployment insurance which will go into effect when the employee loses his or her job. Unemployment insurance is financed through both federal and state taxes which the employer pays. Another social insurance is worker’s compensation which employees gain after they are injured on the job and need to be out of work during for an extended amount of time. Workers’ compensation benefits fall into four major categories: (1) disability income, (2) medical care, (3) death benefits, and (4) rehabilitative services (Noe et al., 2009 p. 567).
Private retirement plan
In offering private retirement, it is not a requirement of law to offer this rewards program to employees; however, employers are required to meet certain standards that align with …show more content…
the Employment Retirement Income Security Act (ERISA). These standards align with that obligates employers to describe the plans, funding, eligibility requirements, as well as risks, within 90 days after an employee has entered the plan. The Act was established in 1974 and is a “federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans” (US Department of Labor, 2010). Employers usually offer private retirement plans to offset an individual’s social security plans. This is done in the form of IRA accounts as well as 401K. Employers will often match the employee’s investment at a specified rate. The employer is required to give a summary plan description (SPD) under ERISA.
Medical Insurance
There are no state or federal requirements that employers must offer medical insurance to its employees.
However, “health benefits are a critical part of any compensation package and disability benefits are, in turn, an important part of health benefits (MacDonald, 2006). Medical insurance is usually offered in the form of hospital, dental, mental health and disability insurance. Although not required by law to offer medical insurance, employers are required to offer extended plans to employees in the event of termination of their employment. This plan was established in 1985 called the (Consolidated Omnibus Budget Reconciliation Act otherwise known as COBRA. The plan requires employers to permit employees to extend their health insurance coverage at group rates for up to 36 months following a “qualifying event” such as termination (except for gross misconduct), a reduction in hours that leads to the loss of health insurance, death, and other events (Noe et al., 2009, p. …show more content…
569).
Disability insurance
Disability income is typically two-thirds of predisability earnings, although each state has its own minimum and maximum.
In contrast to unemployment insurance benefits, disability benefits are tax free (Noe et al., 2009, p. 567). Disability income usually is paid on either a short-term or long-term basis. The rate of salary replacement usually will run between 50 and 70 percent. Employees must first use their short-term disability which usually equals six months or less. Once employees have exhausted short-term disability they will more toward long-term disability which is usually paid by social security. The benefit here is not so much to the employer, but the contributing employee whose federal tax would be fixed.
Social insurance, including social security, unemployment insurance, worker’s compensation
Social security is part of the retirement package that has been set forth by the U.S. government. The Act was established August 14, 1935 to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes (National Center,
2010).
It is a financial benefit that individuals are able to take advantage of at age 65. Employers are required to pay a percentage of the employee’s income as investment in social insurance programs which also includes unemployment insurance which will go into effect when the employee loses his or her job. Unemployment insurance is financed through both federal and state taxes which the employer pays. Another social insurance is worker’s compensation which employees gain after they are injured on the job and need to be out of work during for an extended amount of time. Workers’ compensation benefits fall into four major categories: (1) disability income, (2) medical care, (3) death benefits, and (4) rehabilitative services (Noe et al., 2009 p. 567).