Drennan Topic 1

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Drennan Topic 1
2015-03-05 18:29:14
Employee Benefits

Intro to Employee Benefits Topic 1
Show Answers:

  1. What are employee benefits?
    Loss exposures
  2. What are the types of loss exposures related to employee benefits?
    Loss of income to the employee, medical expenses for an employee, loss of productivity to an employer
  3. What is a peril?
    A random event
  4. List examples of perils
    • Injury/illness/sickness
    • Retirement
    • Unemployment
    • Death
    • Personal Issues and circumstances
  5. What are types of medical expenses pre-retirement (active employee)?
    • Health Insurance
    •     - Indemnity plans
    •     - Managed care plans (HMO, PPO, POS)
    •     - CDHP
    •     - HDHP + (HRA or HSA)
    • Specialized coverages for narrowly defined
    • perils
    •     - Dental Insurance
    •     - Vision Insurance
    •     - Long Term Care
    •     - Prescription Drug Insurance
    •     - Dread Disease Policies
  6. What are types of medical expenses post-retirement?
    • Medicare
    • Post Retirement Health Benefits
    • Post Retirement Life Benefits
  7. What are some benefits for loss of income due to disability (non-occupational)?
    • Sick leave
    • Short Term Disability Insurance
    • Long-Term Disability Insurance
    • Social Security Disability Benefits
    • AD + D
  8. What are some benefits for loss of income due to disability (occupational)?
    • Workers Comp Disability Benefits
    • Short Term Disability Insurance
    • Long Term Disability Insurance
    • AD + D
  9. What are some benefits for loss of income due to death?
    • Employer provided Life Insurance
    • Social Security Survivor Benefits
    • AD + D
    • Business Travel Accident Insurance
    • Workers Comp Death Benefits
    • Retirement Plan Survivor Benefits
  10. What are some benefits for loss of income due to unemployment?
    • Severance Package
    • Unemployment Insurance
  11. What are some benefits for loss of income due to retirement?
    • Defined Benefit Plan
    • Defined Contribution Plan
    • 401(k) or 403(b)
    • Social Security Retirement Benefits
    • Cash Balance Plans
  12. Any type of compensation other than direct, current wages paid to employees
    Broad View a.k.a (Total Compensation View)
  13. What are some types of compensation?
    • Employer's share of legally required programs
    • Payment for private insurance and retirement plans
    • Payments for time not worked
    • Extra cash payments not part of salary
    • Deminimis Fringes
  14. An employee benefits is any plan that is sponsored or initiated, unilaterally or jointly by employers and/or employees
    Narrow View
  15. Providing benefits that stem from an employment relationship
    Narrow View
  16. Not underwritten/paid directly by any government
    Narrow View
  17. Provide protection against loss of income and medical expenses
    Narrow View
  18. What are some factors that impacted the growth of employee benefit plans?
    • Post WWII
    • Union demands through collective bargaining
    • Wagner Act
    • Inland Steel Case
    • Taff-Hartley Act
    • Favorable Tax Treatment
    • Changes in the social and economic make-up of the US workforce
    • Social legislation and regulation
  19. What did the Wagner Act do?
    Gave unions the right to bargain over wages and other conditions of employment
  20. What was the Inland Steel Case?
    The definition of wages under the Wagner Act includes benefits. Made it so that benefits are a bargainable issue
  21. What was the Taff-Hartley Act?
    • Also known as the Labor Management Relation Act
    • Created Taff Hartley Plans that were collectively bargained, multi-employer plans, and jointly administered welfare funds
  22. What were some changes in the social and economic make-up of the US workforce?
    • Childcare benefits
    • Flexibility in benefits
    • Portability in benefits
  23. What are some examples of social legislation and regulation?
    • ACA
    • COBRA
    • HIPAA
    • ERISA
    • GINA
    • ADEA
    • OASDI
    • ADA
    • Workers Comp Laws
  24. What are the five reasons for employee benefits as compensation?
    • Take advantage of group insurance
    • Favorable Tax Treatment for employees
    • Attract and retain employees
    • To improve efficiency or productivity 
    • Concern for well-being of employee
  25. Who pays the non-taxable money for an employee benefit?
  26. What is a cadillac tax?
    A tax on expensive health insurance plans
  27. Differentiate which is Flat Tax/Progressive Tax
    City Wage Tax
    PA Income Tax
    IRS (Income Taxes)
    • City Wage Tax = Flat Tax
    • PA Income Tax = Flat Tax
    • IRS (Income Taxes) = Progressive Tax
  28. In order to receive favorable tax treatment, plans must demonstrate that they are what type of plans?
    Qualified Plans
  29. What must plans go through to prove they are qualified?
    Discrimination Testing
  30. What are the requirements for a qualified plan?
    • Key Employee
    • Highly Compensated Employee (HCE)
  31. What are the two types of discrimination tests?
    • Eligibility to participate or to be covered
    • Benefits Test
  32. What happens if a plan is found to be non-qualified?
    • Key employees and/or HCEs would not receive favorable tax treatment
    • The non-key employees and non HCEs would receive the favorable tax treatment instead
  33. How can a plan be non-qualified?
    • By design
    • By accident (big problem for the employer)
  34. What is the impact of the ACA?
    • Cadillac Tax
    • W-2 Forms
    • Discrimination Testing for all health care plans, not just those that are self-insured