Need a well written Reflection paper. For class Compensation and Benefits (MGT3349)

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Need a well written Reflection paper. For class Compensation and Benefits (MGT3349) APA format Only source that can be used is the text book which is fifth edition Employee Benefits a Primer for Human Resource Professionals by Joseph J. Martocchio. The chapter that need to be covered when writing the reflection paper are chapter 7, 8 and 9. (3 Pages which does not include the work cited). Chapter 7 Government-Mandated Social Security Programs Chapter 8 Chapter Eight Paid Time-Off and Flexible Work Schedules Chapter 9 Accommodation and Enhancement Benefits Paper should include 3 main points 1 from each chapter and a strong theses statement. No outside source except the text book. Which can be found in course hero. Citation: Martocchio, J.J. (2014). Employee benefits (5thed). Boston, MA: McGraw Hill. In text citation is crustal for this paper Use the Purdue online writing lab for the APA format. Iuoo Lycamobile '75\" 2:20 PM '1 It 86% -- berkeley.ccurseload.com C iiii Chapter 9 mm and Hum: Benets 15'} offer courses and treatment to help and encourage smokers to quit. For example, employers may sponsor the participation of employees in the SmokEnde-rs educa tion program. Other options include offering nicotine replacement therapy, such as nicotine gum and patches, and self-help services. Many companies endorse antismoking events, such as the American Cancer Society's "Great American Smoke-Out,\" during which companies distribute Tshii'ts, buttons, and literature that discredit smoking, with slogans sud'l as "Commit to Quit.\" Employer-sponmred smoking cessation programs usually operate on a reim- bursement basis. Employees pa}r a fee for the program. Upon successful comple- tion oi the program, employers reimburse employees for part or all of the cost. Employees are not reimbursed if they fail to complete the program. Employers deduct their contributions to smoking cessation programs as a normal business expense. Employees generally enjoy tax benets as well. For example, they ma'jr deduct the costs of smoking cessation programs and prescrip tion drugs for nicotine withdrawal, unless they are reimbursed by the employer or health insurance plan.9 Employees may pay for nonprescription drugs In as.- sist with smoking cessation with money from a flexible spending account (FSA, Chapter 5}, but an individual who does not have an [EA may not deduct the cost of nonprescription drugs for smoking cessation from his or her income taxes.\" Stress Management Programs Stress management programs can help employees cope with many tors inside and outside of the work environment that contribute to stress. For instance, job conditions, health and personal problems, and personal and professional rela+ tionships can make employees anxious and thus less productive. Symptoms of stressful workplaces include low rmrale, chrmic absenteeism, low productivity, and high turnover rates. Employers offer stress management programs to teach workers coping skills. Seminars focus on recognizing signs of stress and burnout. Stress reduction ted-unique; can unprcve the quality of life inside and outside the workplace. Employers tut-mitt from increased employee productivity, reduced absenteeism, and lower health-(are costs. Weight-Control and Nutrition Programs Weight-control and nutrition programs educate employees about proper nutri- tion and weight loss to promote wood health. Iniormation from the medical corri- munity has clearly indicated that excess weight and poor nutrition are signicant risk factors in cardiovascular disease, diabetes, high blood pressure, and choles terol levels. Over time, these employee programs should yield better health, in- creased morale, and improved appearance. For employers, these programs should result in improved employee productivity and lower health-care costs. Companies can contribute to employees' weight control and proper nutri tion in different ways. For example, some employers sponsor memberships 1n weight-loss programs such as Weight Watchers. Employers may also reinforce the positive results of weightloss programs through support groups, counseling, and competitions. In addition, companies sometimes actively attempt to influence employee food choices by including nutritional foods and beverages as options in om- "000 Lycamobile '75\" 2:16 PM '1 It 90% -- a berkeley.courseload.com C E: + one some oi your benefitsretirement, disability insurance, life insur- ance, accidental death and dismemberment insuranceare offered through both governmentmiandated programs and at the discre- tion of your employer. Immediately, you wonder why there is an apparent duplication of some benefits, particularly given the high cost of employee benets. The speaker goes on to explain the rationale for these programs and the details of each. The 11.5. gooemamnt established Social Security and corkers' compensation insurance programs because of the social problems associated with chronic unemployment resulting from severely depressed economic conditions and demstating nancial consequences forjbntilics wlaise primary wage earners could no longer writ due to a serious amt-It- rciatcd illness or injury. Also. the gmmnent recognized that most employees did not earn enough money to pay for medical services or to saw enough nioacy-nm their ranges to support their retirement, and that atost employees did not receive retirement Benefits from their employers. Various Sociat Secs tity insurance programs were established by the 11.5. germ-amen! to contribute to the attainment oftlie social good. In the mploynnent context, the social good inrm to a booming economy, low locals of unemployment, pmresslzrc wages and benets, and safe and healthful writing conditions. Progressive wages ariaI bcmts help to promote the social good by enabling citizens to actively participate as consumers in the economy. ORIGIN OF SOCIAL SECURITY income discontinuity caused by the Great Depression led to the Social 'ty Act as a means to protect families from financial devastation in the event of un employnlent. During the Great Depression of the 193th, scores of businesses failed and masses of employees became cluonically unemployed. Employers shifted their focus from maximizing profits to simplyr staying in business. Over- all. ensuring the nancial solvency of employees during periods of temporary unemployment and following workrelated injuries promoted the wellbeing of the economy and contributed to the ability of some companies to remain in business. Specically, these subsistence payments contributed to the viability of the stormy by providing temporarily unemployed or injured workers with the means to contbube to economic activity by making purchases, which resulted in a demand for products and senrices. The Social Security Act of 1935 and subsequent amendments also addressed retirement income and. the health and welfare of employees and their families. Moat employees could not afford to meet their basic financial obligations on a daily basis. In addition, most employees could not afford to retire because they were unable to save sufcient uids to support thetmelves in retirement. Further, "000 Lycamobile '75" 2:16 PM '1 IF 90% -- a berkeley.courseload.com C E: + .0. IL'BIllllll IUI \"IEIIIDEI'I'GJ urn-l ulcu cauunao. INTRODUCTION TO THE SOCIAL SECURITY PROGRAMS The Social Security Act of 1935 and subsequent amendments to the act established four public social insurance programs: I OldAge, Survivor, and Disability Insurance [BASED l Medicare 0 Unemployment insurance ' Supplemental Securityr Income benefits The economic devastation of the Great [kpression era prompted the federal government into action because most Americans had used up any life savings to survive, and opportunities for gainful employment were scarce. The pang of lite Social Securityr Act set up two programs: a federal system of income benets for te- tired workers and a system of unemployment insurance administered by the federal government and state govemments. Amendments; to the Social Sccurity Act in 1965 established the disability insurance program and the Medicare program. The term Old-Age, Survivor, and Disability Insurance (OASDI) refers to the programs that provide retirement income, income to the sunrivots ofdeoeased workers. and income to disabled workers and their family members. The Medicare program serves nearly all US. citizens of at least age 65, and disablai Social Securitybonoficiaries, byprovid ing insurance coverage for lmpitalization. convalescent care, and major doctor bills. In this chapter. the fundamentals of DASDI, as well as Medicare and unemploya ment insurance as employee benets, financed through the federal government's taxation of employers and employees, will be reviewed. Practices th mployers { follow when reporting Social Security taxes to the federal governmegl also be examined. The supplemental securityr income {551] program will It covered because it is unrelated to employee benefits programs The 551 program, financed through general tax revenues, provides income payments to the elderly (age 65 or older) and disabled people with low incomes. Employers Required to Participate in Social Security Programs Coverage rules differ somewhat for OASDI and Medicare programs, and also for the unemployment insurance programs. OASDI and Medicare Virtually all U.5. workers are eligible for protections under the DASH] and Medi- care programs except for three exempt classes. First, civilian employees of the federal government and railroad employees with at least 10 years of service are exempt from the retirement program; however, these individuals ate not exempt from the Medicare program. Second, employees of state and local govemrnenls who are already covered under other retirement plans are exempt from Social Security retirement contributions unless these government organizations choose "000 Lycamobile '75" 2:16 PM '1 IF 90% -- a berkeley.courseload.com C E: + .0. IL'BIllllll IUI \"IEIIIDEI'I'GJ urn-l ulcu cauunao. INTRODUCTION TO THE SOCIAL SECURITY PROGRAMS The Social Security Act of 1935 and subsequent amendments to the act established four public social insurance programs: I OldAge, Survivor, and Disability Insurance [BASED l Medicare 0 Unemployment insurance ' Supplemental Securityr Income benefits The economic devastation of the Great [kpression era prompted the federal government into action because most Americans had used up any life savings to survive, and opportunities for gainful employment were scarce. The pang of lite Social Securityr Act set up two programs: a federal system of income benets for te- tired workers and a system of unemployment insurance administered by the federal government and state govemments. Amendments; to the Social Sccurity Act in 1965 established the disability insurance program and the Medicare program. The term Old-Age, Survivor, and Disability Insurance (OASDI) refers to the programs that provide retirement income, income to the sunrivots ofdeoeased workers. and income to disabled workers and their family members. The Medicare program serves nearly all US. citizens of at least age 65, and disablai Social Securitybonoficiaries, byprovid ing insurance coverage for lmpitalization. convalescent care, and major doctor bills. In this chapter. the fundamentals of DASDI, as well as Medicare and unemploya ment insurance as employee benets, financed through the federal government's taxation of employers and employees, will be reviewed. Practices th mployers { follow when reporting Social Security taxes to the federal governmegl also be examined. The supplemental securityr income {551] program will It covered because it is unrelated to employee benefits programs The 551 program, financed through general tax revenues, provides income payments to the elderly (age 65 or older) and disabled people with low incomes. Employers Required to Participate in Social Security Programs Coverage rules differ somewhat for OASDI and Medicare programs, and also for the unemployment insurance programs. OASDI and Medicare Virtually all U.5. workers are eligible for protections under the DASH] and Medi- care programs except for three exempt classes. First, civilian employees of the federal government and railroad employees with at least 10 years of service are exempt from the retirement program; however, these individuals ate not exempt from the Medicare program. Second, employees of state and local govemrnenls who are already covered under other retirement plans are exempt from Social Security retirement contributions unless these government organizations choose "000 Lycamobile '75\" 2:16 PM '1 It 89% -- a berkeley.courseload.com C E: + .0. art uncurys, must\" urmurcunc AU U1 um; "nu I'I'ULh I.ll urcu FHIGIII'J uunulnaaua. Millions of Americans reoeive Social Security UASDI and Medicare benets every year. In 2011, more than 55 million Americans were expected to receive over $55 billion in Social Security benets.' Unemployment Insurance State unemployment insurance programs provide benefits to millions of unem ployed individuals every year. The number of monrly initial daims is note- worthy, mending more than one million. A worker files an initial claim at the beginning of a period 0! unemployment. Wide variation in the number of monthly claims has occurred, often mcreasing with major economic reoessions, such as during the Great Recession that began in 200? and included largescale layo by major employers. particularly U5. automobile manufacturers (Chrysler, Ford Motor Company, and General Motors]. Exhibit ?.1 displays the relative number of graves job gains and gross job losses over a period of several years. The shaded areas refer to periods 0! economic recessioro. In the most recent period displayed in this exhibit [March to June 2011), gross job gains from new and expanding private sector companies was 6.9 million. Over the same period, gross job losses from dosing and contracting companies were 6.3 million. There was a net inn-ease of approximately HILL\") jobs {6.9 million gross iob gains minus 6.3 million gm job losses} While this is a positive sign for employment growth, these gains do not offset the net job losses dorms the 20072009 recession, in which the substan- tial magnitude of gross job losses far exceeded Inc magnitude of gross job gains. Although net job gains have been in evidence since the years 2007 through 2009, the magnitude of these gains do not offset the substantial net job losses during the > Total Private 2:201 2002 2003 2034 2005 2005 200? 2008 2009 2010 2011 2012 Grossjobgains - Grossjob losses Malachite-d turn septa-mu: NB'FJIder-ednesiuim period. "-00 Lycamobile '75\" 2:17 PM '1 It 89% -- a berkeley.courseload.com C E: + .0. for a disabled individual]. Earned benets are recognized on an individual's Social Security record. Employees do not forfeit credits when they change jobs or become unemployed. The number of credits required to quatify for benets depends on a person's age and the partimlar Social Security benefit. These criteria will be reviewed in the discussion oi each Social Secuer program. Determining Benefit Amounts The Social Security Administration pays monthly benefits to recipients of the OASDI program. The primary insurance amount equals the monthly benefit amount paid to a retired worker at Full retirement age or to a disabled worker. As discussed later, survivor benet amounts depend on several additional criteria. A. person's. arrange indexed monthly earn ings [AIMEtdetermine the initial primary insurance amount IPIA]. Automatic cost-omitting adjustments [COLAE] are ap- plied to guard against inflation. The formulas used to determine OASDI benefits are complex. Chapter 7 of the Sacral Security Handbook,\" published by the Social Security Administration, provides a detailed description of these procedures. Average Indexed Monthly Earnings Average indexed monthly earnings (AIME) represent a person's earnings prior to age 62, disability, or death. adjusted for drangm in the person's (rantings over the course of his or her (employment. and for changes in average wages in the economy over the same period. The Social Security Administration uses the AIME to ensure that the pmportion of benets to past ear-rungs is about the same for all OASDI recipients. In other words. using AJME to determine the primary insur- ance amunt (PM) helps ensure that every beneficiary will have the same propor tion of dlsmntlnued inoume [due to retirement, disability, or death] laced by mm- "-00 Lycamobile it" 2:17 PM '1 It 89% -- berkeley.courseload.com (5 a. E: + no 206 Part Two Remnant, Health. amILife lnsut'mce [Elilimelclr 7'3 TheSodalSeturltyAlt'endmemso'leBB (HR. 1m,nmlkLatu93-21icorttainedneopro- \"gment visions that mintr have an Impact on when an indiiriduai decides to ret'ee.1'l~e two provisions Credits areanincrease'ntl'leretirernentaged'tatilrstaffectedindividualsrelir'tnginzooandan increm In the delayed retirerne'ttcredltfor those \"mo-mil: beyond full retirement age. $3.33\"-00 Lycamobile '75\" 2:17 PM '1 It 89% -- a berkeley.courseload.com C EXHIBIT 7.3 Delayed Retirement Cdits (Continued) llll + Chapter ? Gimme-Induced San-inlSe-nn'iq Moms 20? 3. Social Security benets wllbe reduced by25 percenttor a person Mia retires at 52 wine I'ull tenement age Is 66 {turn In 19434 954). 4. Soda! Security benets will be reduced by30 percenttor a person Mic retires at 62 wince full retirement age is 67 {loom in 1960 or later). I Background I The Soda! Security Amendments of 1956|owered1hemirirmrn age for retirement benefitsto 62 formmen. l The Social SecurliyAmend'nemsof 1961 mmat IEII'EITEH'I.' noddmto n'Ien. TheewSOdaJSee-wysmtemt: - Tells a person his or her full retirement age. I Pruridesaretirernent benet estinate forage 62_tulretirernentage.andage?0_ I Theage 52 benet estimate incorporates the reduction for early retirement. I Theage70 benetes'llmateincorporaeeschlayedredrement oedts. When the Social Security Act was passed in H16 19305, it was based on thecon'l- mun model of the single-earner faniya married couple with or without chil- dren. Ordy one of the adults, typically the husband, worked. The OASDI benets program was designed to compensate spouses who stayed at home to raise a tame y and who were nancially dependent on the working spouse. Under this tradi- tional model, the stay-athome spouse did not have any income fro loyment or retirement income. Nowadays, both spouses in a married couple y work, wii bod-L earning Hieir own Social Security retirement benet, as as possible additional income from employer-sponsored retirement plans. To fulll the origi nal goal of the OASDI program an offset provision was established to ensure that a working spouse did not receive two Social Security retirement payments. The amount of Social Security income a surviving spouse receives is reduced dollar for-dollar by the amount of his or her own Social Security retirement benet. Retirement Benet Amount Determination The formulas to determine retirement benets were reviewed above. in general, a person's retirement benet equals the entire primary insurance amount {PIA}. Exhibit 14 shows an example of how the Social Security Administration calculates PIAs. Family benefits usually equal 50 percent of the PIA. in 2012, the annual monthly benefit for all retired workers was $1,229. Survivor Benets The Social Security Administration pays benets to eligible family members of a deceased worker. Eligibility In general, a worker needs to have accumulated at least 40 credits to qualify family members for Survivor benets. Family members include: - Nondisabled widow or widower at the full retirement age or older. - Disabled widow or widower as young as age 50. > a [I] "-00 Lycamobile '7-3' 2:17 PM 4 It 89% -- a berkeley.courseload.com (5 II" + 208 Part Two rte-mm, Healo't. and Life insurance EXHIBIT 7.' Calculating the Primary Insurance Amount [PIA] Source. Social Security Modnietratlom Primoyhsunmrrmn. Acmecd March 13. 2011. mango-I' HA denition the \"primary insurance amount" {PW is the benet {before rounding dorm to the next-lower whole dollar] that a person l.iiiould receive it l'eor she elects to begin receiving retirement benet at his or her normal ret'remen't age. At this age, the benet is neither reduced for early retirement nor increased for Md retirement. PIA Formula The PIA isthe sum of three separate percentages o1 portions ofa-erage indexed Bend Point: monthly earnings. The portions depend on the year it which a worker attains age 62. becomes disabled beforeage 62. or dies before attahhg age 62. For 201 2, these portions are the rst $767, the amount omen $15? and $1,624, and die amotnt over $4,624. respectively. These dollar amount: are the 'bend points" of the 2012 PIA fornuda. A table shows bend points. for years beginning wid1 1929.1'or both the PIA and maximum family benefit formuas. PIA Formula For an individual who rst becomes eligible for aid-age imanoe benets or cite ability insurance benets in 2012. or who dies In 2012 before becoming eligible for ber'eta. his or her PIA will be the sum of: {a} 90;]!ch ofthe'st $267 of H5 or her average indexed n'Ionthly eta-ring; plus {b} 32 pacentof his or her average indexed monthiyeamings over $26? and dtrough $4,624. ptus {c} 15 percent ofhls or her average indexed mond'ihi earningsmer 14.62%. this amount is rounded to the need lower multiple of $0.10 if itis not already 5%.}. multipleoil $0.10. a\"? Illumination oftho FIA Bend Point: for 2012 Amount: in Formula Average Wage lndices lend Faint: for 1919 For 197?: 9.119.411 rst 5180 For 2010: 41.63.33 Second: $1.085 Companion not lend Fiatoendpoinr Secondbendpoi'nt Pdltts for N12 SI Entities 111,619.83 divided by 51,085 times 1,611.33 divided by 9379.44 equals $751.05. which 9,779.44 equals $4523.59. which romds to 576? rounds to $4,624 II Nondisabled widow or widower at any age if he or she takes care of the worker's children under age 16 or disabled children at any age. . Divorced spouse as young as age 60. . Unmarried children under 13, or up to age 19 if attendhtg elementary or secondary adtool on a fulltime basis. '- Disabled children at any age if disabit'y began before age 22 and the parent was unmarried at the time. I Shepchiidren. grandchildren, or adopted children (in most cases). I Dependent parents at age 62 or older. Iuoo Lycamobile '75\" 2:17 PM '1 It 89% -- berkeley.courseload.com C 3 iiii Chapter ? GenemmmJt-lmdawd Scu'mlSmn't'ty Pam-mix 20! Survivor Benefit Amount Determination Survivor benets- are usually less than a worker's PIA. The Social Security Admin- istration pays monthly survivor benefits at a level ranging from 71.5 to 75 percent of the PIA, depending upon the survivor's status. In addition, the Social Security Administration pays a lump sum benet to the surviving spouse, subject to two criteria. First, the worker must have earned at least 6 credits of the last 13 calendar quarters 'tust before death. Second, the surviving spouse must have lived with the worker at the time of death. Surviving children receive this benet if there is no eligible spouse. In 2012, the average monthly survivor benet was $2,543 for a widowed mother and two children. For a widow or widower alone, the average monthly benefit was 51,134. Disability Benefits The Social Security Administration pays benefits to seriousl}r disabled work- ers and family members. in particular, Social Security pays onlyr for total disability. Disability under Soda] Securit)r is based en a person's inability to perform work done before becoming disabled and is unable to adjust to other work because of a medical condition. Also, the disability must last or be expected to last for at least one year or to result in death. As will be dis- cussed later in this chapter, Social Security program rules assume working families have access to other resources to provide support durin eriods of short-term disabilities, including workers' mmpensai-ion, short- rm disabil- it].r insurance (from a private insurance company), and personal savings and mvestments. Eligibility Disability benefits are available to disabled workers who are unable to work as a result of a serious medical or mental impairment that lasts at least 12 months. Seriously disabled workers are eligible to receive disability benefits as long as they meet two criteria. First, the worker must: have accumulated at least 40 credits. Second, the worker must have earned at least 2!} credits of the last 40 calendar quarters in the last '10 years, ending with the year of disablement. Disability benefits are subject to a waiting period of up to six months. More- lenient rules apply to blind individuals and younger workers. Blind workers only need 40 credits. Younger workers need fem quarters of coverage because they have fewer years to accumulate quarters of coverage. Workers younger than age 23 qualif}r with 6 credits earned in the thine-year period ending when becoming disabled. Workers ages 24 to 31 may quality with credit for working half the time betnreen age 21 and becoming disabled. For example, becoming disabled at age 29 requires cnedit for four years of employment {equivalent to 16- credits based on earning 4 credits per year) since the eight-year period beginning at age 21. The following table shows the required number ofcredits to qualify for benets based on the age at which an individual becomes disabled. ELI]- Iuoo Lycamobile '75\" 2:17 PM '1 It 89% -- berkeley.courseload.com C II" + are Part TWO Ema, Her.a1d Life inswmce Disabled at Age Cream Needed 3143 20 4-4 22 46 24 48 25 5 CI 23 52 30 54 32 5 6 34 5 8 35 60 38 62 or Older 40 Family members, as defined in the earlier section on retirement benefits, are also eligible to receive disability payments. Disability Benet Amount Detemimtirm Disability benefits equal the full primary insurance amount. Disability payments to eligible family members usuaily equal half of the PLA. In 2012, the average monthly disability benet for all disabled workers was 51,111. For a disabled ( worker with a spouse and one or more children, the amount was $1,892. MEDICARE The Medicare program serves nearly all US. citizens age 65 or older by providing insurance coverage for hospitalization, convalescent care, and major doctor bills. The Social Security Act was amended in 1965 to create this program. The Medicare program includes ve separate features: I Medicare Part AHospital insurance. I Medicare Part BMedical insurance. - MedigspVoluntary supplemental insurance to pay for services not covered in Parts A and B. I Medicare Part C: Medicare MusingsChoices in health-care providers, S'lld'l as through HMOs and PPOs [Chapter 5). I Medicare Part D: Medicare Prescription Drug BeugtFiescription drug coverage. Most individuals who are eligible to receive protection under Medicare may choose to receive coverage in one of two ways, as shown in Exhibit ?.5. As this exhibit shows, a person may receive coverage under the original Medicare plan or Medicare Advantage plans. in a nutshell, the original Medicare plan is a feerior-service plan that is managed by the federal govemment. As discussed in Chapter 5, fee-for-service plans include many health care services, medical supplies, and certain prescription drugs. Par- tidpants in fee-forservice plans have the choice to receive care from virtually any licensed health care provider or facility. On the other hand, Medicare Advantage ELI]- "-00 Lycamobile '5' 2:17 PM '1 It 89% -- berkeley.courseload.com C EXHIBIT 7.5 Medicare Basics 51mm: when: WWW. II" + Chapter ? Comment-laminated Minuet-nit: hummus 111 Elli\" \"PHI t3," IIIII option mam your Part A {Hospital} and Put a (\"an Mahlnuanseoummhlappmd Medium provides this coverage. by Miriam provide this magi. PutEliauptial'ial.Yuu harem mquwmuetenmmnh Mddum'l'wrmBme #Il'l'f'nurumilnmlybikxnrllnin bahlghnrthanhadaam the nrigtnalaclwenhmandyeu may numm mo Finn Windmill-um} MFartcplmou-'arpraasliptlnn dug. lh'rcbn'trywrnaybaatleb Mien runlhou plans. Plans changed-Fa mange. Planners-tar m dlamt \"1393. WI riffnmi elm. \"innit-{my mamdrwsmwtbecmomd mmudhaonnrsd. (\"lean Supplement\" Mann) You on choc-a h tuylhia private micron \"play-Irwin" may diarsrrihrmragejbllnmpa h FadAand Fart Boar-ram. Gosh \"'5' WWW many- plans include a variety of insurance optims, including health maintenance orga nizatims preferred provider organizations, Medicare special needs plans, and Medicare medical savings account (ME-A) plans. Medicare Advantage plans are run by private companies and are subject to strict regulatiims specified in the Medicare program Restrictions pertain to the pricing of the different plans. The key features of these plans will be reviewed in subsequent sections of this chapter. Eligibility Criteria for Medicare Benefits Individuals age 65 or older who have earned at least 40 credits are eligible to receive Medicare benefits. Medicare coverage automatically extends to spouses of eligible individuals. Family members with disabilities are eligible to receive Medicare benets. Younger individuals quality for Medicare protection if they are seriously disabled for at least 24 months or suffering from permanent kidney failure requiring dialysis or a transplant. Meeting at least one of these criteria pro vides Part A coverage without paying a premium. Having fewer than 40 credits requires that an individual pay a numtiy premium to receive coverage. In 2012, the monthly Part A premium was $451. > m [I] Iuoo Lycamobile '75\" 2:17 PM at It 89% -- a berkeley.courseload.com C 3 iiii chapter it GwemmmMmdcmd Stu-mlSeclniq Fromm; 113 Some homers offer Medicare Select plans. Medicare Select plans are Medjgap policies that offer lower prelrlituns in exchange for limiting the choice of health-care providers. Three slatesMassachusetts, Minnesota, and WlSCDII'Blnd not subscribe to this system for ottiering Medigap insurance. Separate rules apply in Erase states. Medicare Part C: Medicare Advantage The Balanced Budget Act of 199? established Medicare lCll'toicerenan'ted to Medicare Advantage in ma third Medicare program, as an alternative to the original pro- gram (Parts Aancl B}. The Medicare Advantage PTOETEIIIL informally referred to as Part C, provides beneciaries the oppctrhu'lity to receive health care from a varietyof options, including private teem-service ptans, managed care plate. or medical sav- ings accounts. Fee-fowrvice plans provide protecticm against health-care expenses in the form of cash benefits paid tothe insured ordirectly to thehealth-care provider afterreoeivmgheelthcareservioes'fheseplam pay benefitsmareimbursen'tent basis. Medicare Parts A and B are based on fee-toreervice arrangemmts. Managed care plans often pay ahigher level of benets if health care is received from approved providers. Beginningmtll,pardpants gainedacoesstoawider variety ofhealth providers. The Medicare Advmtage program also allows beneficiaries to change health plans duraig an amine] open enmllment period each November. ( Medicare Prescription Drug Benet } The passage of the Medicare Prescription Drug, Improvement, an Moderniza tion Act of 2003 (also known as the Medicare Modernization Act) instituted a prescription drug benet for Medicare program participants. Commonly referred to as Part D, the drug benet was first offcrcd in 2006. A participant pays the deductiblFS'GZ in EDIEbefore Medicare begins to provide coverage. For ex penses above $320 through $2,930, the participant pays a small copayment for each prescription. For expenses above 52,930 through $4,700, the participant pays 50 percent of the cost of brandname drugs and 36 percent for generic drugs. This coverage gap is known as the \"donut hole" because Medicare contributes to the payment of approved prescription med ications for amounts outside {that is, be- low or above} the $2,930 to 54,7\") range, less the annual deductible. For expenses greaterthan $4.300, the participant pays a small copay'mcnt. Thcse dollar amounts were valid in 2012 and are subject to change from year to year. The passage of the Medicare Modemization Act has relevance for employers offering a group health insurance plan that covers retirees who are eligible for Medicare. The Medicare Modernization Act provides for a federal taxexempt subsidy to employers that sponsor drug benefits that are at least as generous as the standard Part D benet. Medicare as the Primary or Secondary Payer Individuals who have Medicare coverage may also simultaneously receive health insurance benefits from another health insurance plan, including an employer's group health plan, a retiree health insurance plan sponsored by a former em- ployer, or an employed spouse's group health plan. An important question arises regarding which planMedicare or the other healdt planpays benefits first. ELI]- "-00 Lycamobile '5' 2:18 PM '1 Ii 88% -' a berkeley.courseload.com C 3 iiii I have a domestic partner Wilh- group health insurance coverage. I'm in a Health Maintenance Organization {HMO} Plan or an employer Preferred Provider Organization {FPO} Plan that pays rst. who pays if I go outside the employer plan '5 network? I h Medicare and my employer offers group health plan coverage. but I declined or dropped it. I have Medicare and COBRA conrmation coverage. + no Chapter 3' Gwemmmh1msdcoed$aeinl$mrizy Program 215 Medicare generally pays second; 4 mn the domestic partner is entitled to Medicare on the basis of disability and is covered by a large group health plan on the basis of his'her own current employment status or the status of a family member {a domestic partner is considered a family member]; s For a 30-month coordination period when the domestic part- ner is eligible for Medicare on the basis of End Stage Renal Disease (ESRD) and is covered by a group health plan on any basis; - 'ul'vhen the domestic partner is entitled to Medicare on the basis of age and has group health plan coverage on the basis of hisr' her own current employment stems. If you go outside your employer plan's network. you might not get any payment from the plan or Medicare. lCall your employer plan before you go outside the network to find out if the senrice will be covered. Medicare pays first for any Medicare-covered health care service you get if you don't take group health plan coverage from your em- ployer, mless you have ooverage through an employed spouse. and your spouse's employer has at least 20 employees. Note: if you don't take employer coverage when it's ti offered to you, you might not get another chance to sign up. If you take the coverage but drop it later. you may not be able to get it back. Also, you might be denied coverage if you employer or your spouse's employer generally offers retiree coverage but you weren't enrolled in the plan while you or your spouse was still working. Call your employer's benefits administrator for more information. In general. the rules that apply to group health plan coverage also apply to COBRA connuaon coverage. For example. if you or your spouse are retired and have COBRA continuation coverage. Medicare pays first. If you have Medicare based on End-Stage Renal Disease {ESRD}. COBRA oontlnuation coverage pays first. Medicare pays seooncl to the extent COBRA coverage overlaps the first 30 months of Medicare eligibility or entitlement based on ESRD. Source: US. endowment: furMedjoue, 'Who Parts Find If You HimmlerHuhl'ICovaI-yy" 2012 Acton]. Int: 20. Mllhtlpi mnledluoegovfnlvlgawmloare-bnskofwhommmmpn FINANCING OASDI AND MEDICARE PROGRAMS Funding forOASDl and Medicare programs require-s equal employer and employee oontt'ibutiot'ls under the Federal Insurance Contribuliona Act {FICAJF FICA te- qujres that an employer pay tax based on its payroll; employees contribute lax based o [I] Iuoo Lycamobile '75\" 2:18 PM '1 It 88% -- a berkeley.courseload.com C II" + 216 Part Two Errata-mm. Health. mdLilemmm-Ice on earnings, which is Mdtheld from each paycheck. The Self-Employment Con- tributions Act (SECAl' requires that selfemployed individuals contribute to the OASDI and Medicare programs, but at a different tax rate. In either case, the tax rate is subject to an increase each year to sufficiently fund DASH] programs. Since 1990, FICAhas required employers and employees to contribute 7.65 percent each,- tor self- ernployed individuals, it is generally double that amount, or 15.3 percent. This tax amount is apportioned between OASDI and Medicare programs, a discussed next. OASDI Programs The largest share of me FlCA tax funds OASDL programs. In 2009, 620' percent of the contributions of employers and employees were set aside. Self-employed individuals contributed 12.40 percent. At the time of this writing, the employee and self-employed tax rates were each temporarily reduced by 2 percent for the 2012 calmdar year to 4.25 and 10.40, respectively. The goal of lire reduction was to contribute to higher takerhome pay in hopes of increasing consumer spending. OASDI taxes are subject to a taxable wage base. A taxable wage base limits the amount of annual wages or payroll cost per employee subject to taxation. The tax- ablewagebasemayalsoincreaseovertimetoaccormt arincreesesinrecostof living. In 2012, the taxable wage base was $110,190 for everyone. Annual we , pay- ELI]- Iuoo Lycamobile '75\" 2:18 PM '1 It 88% -- s berkeley.courseload.com C 3 iiii Chapter 1' (immortals-Wu! SarinlSmn-iq Pam-ms 11? One can get an idea about the financial condition of the Social Security pro- grams from annual reports prepared by the Social Security Board of Trustees. In the 2011 scal year report\Iuoo Lycamobile '75\" 2:18 PM '1 Ii 88% -- s berkeley.courseload.com C II" + 2|! Part Two new, Healer. and Life inswmm . Minimum eamings and employment requirements. 0 A waiting period in most states. I A capacity to work and an availability for work. II An active seeking of suitabie work. Limited Voluntary Employment and Involuntary Unemployment Workers who become unemployed through no iauit of their own are eligible to receive unemployment insurance. Specically; voluntary termination usually dis- qualies workers from receiving unemployment insurance benets unless they cine-e to quit their jobs for reasonable cause. Retractable cause refers to the creation of working conditions that cannot be tolerated by any sensible person. Involun- tary termination does not guarantee eligibility for benets; most states stipulate disqualifying events. These include termination for misconduct, refusal of suit- able work, and participation in some labor disputes. Some states will pay benets for participation in labor disputes that result from a lockout by the employer or if the employer violates the terms of either a contract or labor laws. Additional disqualifying events inciudo regular breaks between school terms for educators Individuals applying for unemployment rsuraruze benets Hurst have been em- ployed for a minimum period of time, reerred to as 'le base period. Most states dene the base period as the rst four of the last five completed calendar quarters inmediatiely preceding a claimfor benefits. In addition, most states; require sufficient previous earnings, typically $1,130 during the last four quarter periods combined. Waiting Period Most states impose a waiting period, usually one week following submission of a claim. prior to paying benem. States impose waiting periods for a variety of reasons, including time needed to process claims. Other states use waiting periods to limit total costs. Aggreirating a wee-it's worth of benefits over the total number of eligible individuals adds up to substantial amounts. Capacity to Work and Availabilityfar Work Unemployed workers must be mentally and physically capable of performing work. Availability for work reiers to a person's willingness and readiness to work. The former requirement can be thought of as ability, and the latter as motivation. Actively Seeking Suitable Work Unemployed workers must demonstrate that Urey are actively seeking work. The requirements vary by state. Usually, going on job interviews provides sufcient evidence. The term suitable work contains two elements. First, suitable werk refers to jobs that require skills, knowledge, and ability similar to a person's cus tomary work. Second, suitable work offers employment terms and conditions that do not violate relevant laws (e.g., violation of the minimum wage requirement of the Fair Labor Standards Act of 1938]. om- Iuoo Lycamobile '75\" 2:18 PM '1 It 88% -- a berkeley.courseload.com C 3 iiii Chapter '3' Gwemm'lvlmdmd 34qu Program 115' Unemployment Insurance Benefit Amounts Individuals who meet the eligibility criteria receive weekly benets. Became the federal government places no limits on a maximum allowable amount, the benet amount varies widely from state to state. Most states calculate the Weekly benets as a specied fraction of an employee's average wages during the highest calen- dar quarter of die base period. The maiority of states pay regular unemployment benets for a maximum of 26 Weeks. A 1970 amendment to the Social Security Act established a permanent program of exttded memployrnent benets, usually for an additional 13 weeks, to be paid bythe federal government. "Hie extended pmgramin any state is triggered when the state's mempioyrnent exceeds a predetermined level. As discussed ear- lier, the economic recession that began in late 2037 has led to additional measures from the federal government to otter further benets for extended periodsas many as 21 extra weeks beyond the permanent program ln additicm to Hu's statu tory requirement for extended benefits is another program offering extended sup- plemental unemployment benets (SUB). The SUB is Irmst conmuln in industries in which employment conditions are cyclical, such as in the steel industry. Virtually all SUB benets are part of collective bargaining agreements. Unemp :5, . -.. t insur ance benets Womtation for each of the 50 states and 1.1.5. tem'tori including PuertoRimandtheVirginIslands,InaybeobtainedfromtheUS. I I tof Labor Web site (WW. workforcesecurity \"doleta gov) Most miemployment' insur- ance programs provide benets that amount to so to 6? percent of previous cam ings. States use one of three methods to calculate weekly benet amounts tWBAsl: - A fraction of the highest wages for a calendar quarter earned during the base period. U A percentage of the average weekly wage eamed during the base period. 0 A percentage of annual wages. The calculation of WBAs excludes some income, including holidays, vacation, back pay, workers' compensation mcome, and retirement income. Financing Unemployment insurance Benefits Unemployment msurance benets are nanced by federal and, sometimas, state taxes levied on employers. Federal tax. is levied on employers Lmder the Federal Unemployment Tax Act [FUIALB Employer contributions amount to 6.2 percent of the rst $7,331] earned by each employee {Leo the taxable wage base). FUTA species $311) as the rrnimum allowable taxable wage base. Relatively few states' taxable wage bases are as low as the RITA-specied minimum. States typically set the taxable wage base according to the average wage level. in 2012, state-5' taxable wage bases ranged from 57,003, in Arizona and California, to 538,300, in Hawaii. The federal govenmtent deposits 5.4 percent of the taxes levied on employers to the Federal Unemployment Trust Fund, which is administered by the Trea sury Department. The Treasury Department invests this money in government securities. crediting the principal amount contributed by each state and invest- ment income to an account. The federal government retains 0.3 percent to cover ELI]- Iuoo Lycamobile '75\" 2:18 PM '1 It 88% -- berkeley.courseload.com C II" + 226 Part Three San-am "Whoa!\" you think. There's a lot to learn about your company's benefits plan, and you have done well in learning about them. Now you feel that you're ready for a vacation, and you've barely started your new job! Well, perfect timing. Employers offer a variety of timo-otf-with-pay opportunities for employees, including vacation and flexible work schedules. in some cases, paid time off is required by law. In either event, paid lime off is designed to give employees the opportunity to pursue leisure activities, balance work and family demands, meet civic duties, and continue their education. In this chapter, you wiil team additional reasons wiry companies cin' paid tinIaJof benets anderibte work schedules. DEFINI? AND EXPLORING PAID TIME-OFF PROGRAMS Paid time-eff policies compensate employees when they are not per their primary work duties. Private sector US. companies offer most paid time ofi benefits to employees working in the United States or its territories on a discretionary basis, without government intervention. In nonunion settings, companies offer most paid time off as a matter of custom, particularly paid holidays. In unionized settings, paid timeoff provisions are specified within col lective bargaining agreements. Common discretionary paid time-off programs include holidays, vacation, sick leave, personal clays, integrated paid time-off policies, and bereavement or funeral leave. Federal or state laws play a role in other discretionary practices, including jury duty leave, military leave, and nonproduction time. The Family and Medical leave Act of 1993 requires compa- nies to grant extended unpaid leaves of absence to address family and modical circumstances. Both employees and employers highly value paid time-oft benefits. These benefits provide employees the opportunity to balance work and nonwork in- terests and demands. Companies stand to gain from sponsoring these benefits. Employees may legitimately take time off from scheduled work without incurring loss of pay and benefits, which should help reduce unapproved or unscheduled absenteeism from work. By keeping scheduled absenteeism in check, overall productivity and product or service quality should be higher. Also, these ben- efits contribute to positive employee altitudes and oonurlitzment to a company, particularly for employees with longer lengths of service. As will be discussed shortly, the length of paid time off, such as vacation, can increase substantially with length of service. Exhibit 8.1 shows the percentage of private sector workers who have access to alternative paid time off (unpaid family leave is one exception to all types of paid leave). ELI]- "-00 Lycamobile '75\" 2:18 PM 4 It 88% -- a berkeley.courseload.com C 3 iiii Chapter 8 Paid Timzaomd Flmhte Word with; 12? EXHIBIT 8.1 Percent 0! Workers with Access to Selected Leave llenelils , by Worker Characteristics: Private Industry National Compensation Survey, March 2011 'nweunofpaldmdmtpllmlthmycdeWPmtblmmwmmmate bothtmeolpirs. Leave Ben-tits tAll workers = 100 percent PI\" Pill\" PI\" 'IId Fl I11\Iuoo Lycamobile '75\" 2:18 PM 4 Ii 88% -- berkeley.courseload.com C 3 iiii 21! Part Three Sen-am I Military leave Nonproduction time Oncall time Sabbatical leave Volunteerism Holidays Private sector employers usually follow Hie holiday timeoff practices for federal government employees. Federal law establishes 12 public holidays with pay for federal government employees [Exhibit 3.2}.1 Most federal government employ- ees work five days a weekMmday through Friday. When holidays fall on a weekend day, employees receive a clay off during the workweek to observe the holiday. Federal government employees have the day off as observed holidays the Friday preceding an official holiday that falls on a Saturday, and the Monday following an official holiday that falls on a Sunday. Every state has laws mat recognize holidays as paid time-off for its employees. Some states include addi- tional paid holidays, such as time off on public election days. Most private sector employers choose not to recognize state-specic public holidays, such as aski ( Day in Illinois. 3 Some companies add one or two floating holidays to the list of regular} ed- uled holidays. Floating holidays allow employees to take paid time off to observe any holiday not included on the employer's list of recognized paid holidays. Oftentimes, companies do not limit oating holidays to federal or state holidays. Employees may use oating holidays to extend the allotted number of paid vaear tion days or sick leave. Companies must pay attention to die treatment of religious holidays, which, ex- cept for Christmas, are not induded on any list of federal or state public holidays. Title VII of the Civil Rights Act prohibits illegal discrimination in employment practioes on the basis of sex, religion, color, race, and national origin The Equal Employment Opportunity Commission {EEOC} established guidelines that en- courage oornpanies to honor employee wishes to observe religious holidays, EXHIBIT 8.2 Unied 5\"\" may, January 1. 2014 new Year's Day Off-DE of Wide]. Jammy an mm of Martin Luther King. in Personal Monday, Fetruary 12" Wastinginn's Birthday 31313\" Wmm'mf' memo . , n ence ay Holidays Monday. September I labor Day mmsmw Ilia-my, October 13 Colinihus Day rm gdaya Member; 2? yheiarkagmoay Da , - urs ay, Noam an no If 'j'\" Monday, Dumber 25 Christmas Day hltptwwopn .guvhm\" misholidlyisdesianuedas"Waehlngbm's Iii:thday.'lhelaw dulqseciesholidays for federal www.mwodm Siamesduhs,' mhrmsuhasihhemd lineal W mdpuanhm mayuseoiu names, "not." policy koala-rays Insist militia. tolwlldayshfthemdeshmwdinthrhw. ELI]- Iuoo Lycamobile '75\" 2:18 PM '1 It 88% -- a berkeley.courseload.com C 3 iiii Chapter 8 Paid Timzaomd Flexible Wait Scimiulrs 129 unless doing so would cause undue hardship to both the company and some employees.3 From the EEOC's perspective, undue hardship addresses two iSsues: the cost of accommodation {e.g.. cost of temporary replacements} and denial of the rights of other employees to benefits under a bona fide seniority system. The EEOC guidelines do not require companies to pay employees when they take time off to observe religious holidays. Nevertheless, it is imperative that compa nies treat the observance of religious holidays uniformly as paid or unpaid time off. Employees who teei that they are being discriminated against on religious grotmds may file a complaint at the nearest EEOC eld office (\"weeocgov/ officeshtrnl]. it is not uncommon for holidays to occur when some employees are on sched uled vacation leave or absent because of illness. Companies must decide whether to oount such instances of paid holidays as a paid vacation day or sickness day. Most often; companies choose to recognize a holiday that overlaps with paid va cation or illness as a holiday rather than as a charge against an employee's allotted paid vacation or sick leave. Some companies extend paid time off for holidays by granting one or two days preceding or following the holiday. The most widespread practice is to extend the Thursday Thanksgiving holiday by adding the next Friday and to recognize Christmas Eve as a paid holiday. Companies that operate on a Monday-through- Friday workweek schedule may designate Thursday or Friday as id time off as]- "-00 Lycamobile '75\" 2:19 PM '1 It 88% -- berkeley.courseload.com C II" + zen Part Three Seminars separate policies usually provides more vacation benets to managerial, proies- siona], and executivelevel employees to recognize the presumed higher direct impact of these employees on company performance. Third, vacation policies specify rules for the allotment of vacation days per calendar or fiscal year. Some companies allot the same number of vacation days per employee each calendar or fiscal year. Most often, companies recog nize employee seniorityr as the basis for allotment. Companies may indicate a particular number of annuai vacation days per range of annual seniority, for example: Employment Vacation Earned Less than 1 year Ineligible for vacation benefits 15 1,I'ears 5 days 6-9 1years 10 days 101 9 years 1 5 days Companies may also choose to increase vacation benets by a smaller incre- ment for each additional year of employment, for instance: Employment Vacation Earned Less than I year Ineligible for vacation benefits 1year burlessthanl Edays 2yearsbutlessthan3 Gdays ayearsbutless'd'iand idays And so forth. Alternatively, companies may opt to determine vacation benefit-a according to the number of hours worked. Usually, this approach applies to non- exempt workers, as designated by the overtime pay provision of the Fair Labor Standards Act of 1933 (FLSA). Generally, administrative, professional, and execu- tive employees are exempt from the FLSA overtime and minimum wage provi- sions. Most other jute are nonexempt. Nonexempt jobs are subject to the FLSA overtime pay provision. There often has been controversy regarding who is actu ally eligible for FLSA overtime pay, in part based on the amount of an individual's earnings. Chapter 3 discussed the FairPay rule-s and some of the complexity in determining eligibility for overtime pay. The following is an example of a vacation policy for nonexempt employees: Years of Hours of Vacatlon Earned Maximum Hours Service per Biweekly Pay Period Earned per Year Less than I year ineligible for vacation benefits 1-4 4.00 104 hoursorleays 59 t1_52 120 hours or i 5 days 10-14 5.52 144 hours or'lSd-ays 1519 5.46 168 hours or 21 days 20 or more 1G4 184 hours or 23 days ELI]. Iuoo Lycamobile '75\" 2:19 PM '1 It 88% -- a berkeley.courseload.com C 3 iiii Chapter 8 Paid memd mutt: Wait Schniuks 131 A fourth vacation policy provision addresses the basis for scheduling employee vacations bo avoid creating temporary staffing shortages. Most often, employees must place a request for approval with supervisors or department managers. The request should indicate the start date and return-to-work date. When two or more employees request the same or substantially overlapping vacation periods, supervisors decide who may take vacation, usually giving priority to employees with greater seniority. Fifth, vacation policies should specify carryover and cash-out provisions. Carryover provisions permit employees to take unused vacation time awarded for a calendar or fiscal year during a subsequent calendar or fiscal year. Alterna tively, vacation policies may require that employees take allotted vacation days during the designated year, Forfeiting any unused vacation days for that period. Many employees refer to this choice as a \"use it or lose it" provision. Policies that prohibit carryover may include a cashout provision. Cash-out provisions pay employees an amount equal to the unused vacation days based on regular daily earnings. Sick Leave Companies offer sick leave benefits to compensate employees for a specied number of days absent due to personal illness. Sick leave policies are separate from disability leave policies {Chapter 6] because they are designed mpensate employees when they are absent because of occasional other i or injury. Sometimes, these policies permit employees to take time off with y to care for an ill child, spouse, or parent, within the limits of allotted days. Although benefi- cial to employees, sidt leave plans can be disruptive and financially threatening to employers, particularly during challenging economic times, when companies are desperate to accomplish more work at the lowest possible costs. Certication of illness is an important feature of sick leave policies. Some com- panies require that employees provide evi