Cobra Administration

● the length of time that an employee's eligible for coverage is determined by the type of
qualifying event
● 18 months - employees reduction in hours or employees termination
● 29 months- disablement of an employee
● 36 months- divorce or legal separation or death of an employee spouse or dependent
child who loses eligibility status

Non discretionary benefits

Social Security,Medicare,workers compensation,unemployment insurance ,unpaid family
medical leave,Cobra

Discretionary benefits
medical , Dental and vision plans, prescription drug coverage, addiction and substance abuse
programs, EAP , Wellness programs, disability or life insurance ,deferred compensation like
various retirement plans

EAP are employers sponsored benefit programs to help employees who are experienced
difficulties in the area of anxiety depression marital or family relationship problems legal issues
and financial concerns.

HSA health saving account- Limited non-taxable for healthcare expenses. employers May
contribute to these accounts
HRA Health reimbursement arrangement- employer funded medical plan that reimburses for
eligible Healthcare expenses the funds are not portable for the next year

Managed care plans

HMO Health maintenance organization - selected doctors are paid on per head basis rather
than actual treatment
PPO preferred provider organization- the employer negotiates discounted fees with
networks of healthcare providers and guarantees certain volume of patients
POS Point of service organization- combination of PPO and HMO that provides direct access
to specialists
EPO exclusive provider organization -The employees must use providers who are in the
network of coverage
FSA flexible spending accounts The employees to use pre-tax dollars to pay for approved
out of pocket Healthcare expenses that are not covered by insurance and dependent care
expenses .The employees decides the amount of pay to have deposited in there FSA each
month. use it or lose it

Disability insurance- health and wellness benefit

 short-term disability insurance- pays and employee a percentage of salary typically 50 to 70
percentage after a brief waiting period this is in the event that they are unable to work for short
period of time between 10:00 and 26 weeks following or non-work related injury or illness

long-term disability insurance If the employees unable to return to work after being on short
term disability.pays typically 50 to 60% until they can return to work or for number of years
listed in the company policy.

Retirement plans

defined benefit plans- The benefits are known to the employee and the employer Bears the
burden of Financial Risk. the cost is unknown. higher rewards for long tenured employees.
These are employer funded. Traditionally pay the retiree monthly annuity payment that continue
for life. the federal government through pension benefit guarantee Corporation pbgc guarantees
some amount of benefits. if employee leaves before the retirement age the benefit stays with
the plan until the employee files a claim for it at the retirement.

● flat dollar approach- pay a set dollar amount for each year of service under this plan
usually hourly employees under a collective bargaining agreement

● career average- two methods 1) the employee earns a percentage of pay for each year
they are a plan participant 2) the employees yearly earnings are totaled and then
average over the number of years they are in the plan. At retirement the benefit equals a
percentage of career average pay multiplied by employees year of service

● final pay approach base their benefits on the average earnings during a specified
number of years usually towards the end of individuals employment.

● cash balance plans -These plans Express the promise benefit in terms of hypothetical
account balance. each year the employees account is credited with two types of credits
. pay credit- equates to a percentage of the compensation interest credit- or fixed or
variable rate linked to Intex suggest us treasury bills

Defined contribution plans-Employees and or employers pay a specific amount into the
plants for each participant. employer contributions are based on percentage of salary or
percentage of profits. performance of the funds in these plants ultimately determines employees
benefit. The employee is responsible for managing the investment choosing from the options
offered by the plan .Federal guarantee of benefits is not there.

Examples - 401K plans, 403b plans, profit sharing plans.

advantages -Benefits to employees with less service and cost is known but benefits are
unknown and the employee Bears the burden of Financial Risk.

Federal laws and regulations related to Total Rewards

 Davis bacon Act 1931 - Applies to contractors and subcontractors working on federally funded
contracts in excess of dollar 2000. employees to pay all laborers at construction site at least the
prevailing wage and fringe benefits that working in similar project area are receiving.

Walsh Healey public contracts Act 1936- applies to contractors working on federally funded
Supply contracts in excess of dollar 10,000. the employers must pay at least the federal
minimum wage which is $1.7.25 per hour and overtime pay full stop the employment of Youth
under age of 16 and convicts is prohibited under this legislation. job safety and sanitation
protocols to be followed.

F LSA Fair Labor Standard Act 1938 also known as wage hour law ,

Employee classification
non-exempt -Positions for directly under flsa regulations.This employees on a salary of less
than $23,600 per year or dollar 455 per week. non-exempt positions do not involve the
supervision of others or the use of independent judgment. they also do not required specialized
education
exempt - Positions do not fall under flsa regulations . except level duties fall into three
categories. executive employees -Responsible for directing the work of two or more full-time
employees .They have direct input into employees hiring or firing decision. professional
employees - Learned professionals like doctors engineers accountants writing acting and
graphic arts. administrative employee -

minimum wage- The employees must be at least the federal minimum wage. if the state in
which an employee Works pay higher minimum wage the employee will receive higher state
minimum wage.

overtime - the employers must pay Not exempt employees over time pay at the rate of 1 and
1/2 times of individuals regular rate of pay for any hours worked in excess of 40 hours of work in
a single work week. not required to pay overtime for work performed on Sundays Saturdays or
paid off days such as sick days vacation days or holidays it should be paid during which it was
earned instead of averaging overtime across the multiple work weeks.

on call - non-exempt employees should be paid the regular rate of pay for on-call time that are
required to remain at the employer's place of businessWhile waiting to engage in work as
required by the employer. since they are not free to move away from the workplace they must
be compensated for the time spent on call.

record keeping - employers required to keep specific records as defined by the Department of
Labor like total hours daily weekly earnings Etc

child labor - Working youth are guaranteed safe workplace environment and are allowed to
pursue additional education. Youth under 14 should not work on business that is hazardous in
nature. restricted work hours 7:00 a.m. to 7:00 p.m. youth ages 16 and 17 can work unlimited
hours but prohibited from hazardous job.

Portal to portal Act 1947 deals with preliminary task ( activities prior to start off principal
workday activities) and post-liminary task( activities following the completion of principal
workday activities). example of postliminary task - on call or standby time meals and breaks,
travel time and training time .Act requires employers to pay for employees for the time spent
traveling to perform job related task if that travel is outside the employees regular work
commute. employers must also pay for any time they spend waiting to start work when
requested to do so by the employer. employees are to be paid for hours spent in job related
training that is outside of their normal workday.

Equal Pay Act 1963 -Employers to pay equal wages to both men and women who perform
equal jobs in the same establishment the content of the job must be equal in nature .Equivalent
jobs are required to have equal skill, equal working condition, effort and responsibility. Allows to
pay differentials when based on other factors other than gender such as seniority Merit
production quality or quantity and Geographic work differentials.

ERISA Employee Retirement income Security Act 1974-Establishes minimum standards for
benefit plans the plants must confirm to the internal revenue codes requirements.The employee
must be at least 21 years of age and have completed one year of service with the company.

vested benefits benefits from a retirement account or from a pension plan belonging to an
employee that they get to keep regardless of whether they remain employed at the company .
two types of vested benefits. graded vesting And Cliff Westing

pension protection act 2006-This is to strengthen pension system by increasing the minimum
funding requirements for pension plan thereby eliminating missed payments for unfunded plans.
This allows employees to be automatically enrolled into the employer's retirement plan at a
default contribution rate after receiving notification. the employees can elect to save at a
different contribution later different investment plan or opt out of the retirement plan all together.

HIPAA Act health insurance probability and accountability Act 1996 -This address
pre-existing medical conditions for which the employee received medical advice or treatment 6
months prior to enrollment date into the healthcare plan such as serious illness injury or
pregnancy .Employer cannot refuse them coverage in new group health plan due to pre-existing
condition and cannot charge higher rate for coverage .

Patient protection and Affordable Care Act Obama Care 2010 -If the individual do not have
access to employers sponsored health coverage, Medicare or Medicaid they can purchase
Healthcare from an Insurance Exchange and receive a subsidy. Children are allowed to stay
under the coverage of their parents' Health Care until the age of 26 and individuals with
pre-existing medical conditions cannot be denied coverage
Mental health parity act 1996 - The census Large Group Health Plans provide coverage for
mental health care in the same manner they provide coverage for physical health care. this
applies to employers with more than 50 employees.

FMLA Family Medical Leave Act 1993: eligible employees to take up to 12 weeks of job
protected unpaid leave during a 12-month period for specific and medical reasons. applies to
employers has at least 50 employees full-time or part-time within 75 miles of given workplace
and spent at least 12 months and for a total 1,250 hours over past year.

FLMA covers the following reasons

● the birth of a child adoption or foster care placement

● the serious health condition of a spouse child or parent
● serious health condition of the employee, one requiring impatient care or continuing
treatment by a healthcare provider
● qualifying exigency or leave to address most common issues when an employee's
spouse child or parent is on active duty or to call active duty status example making
financial and legal Arrangements or arranging for alternative child care
● Military caregiver leave for employee spouse parent or his or her next of kin with serious
injury or illness employees are to be granted up to 26 weeks of job protected and paid
leave during 12 month period to care for a covered service member

Uniform service employment and Reemployment rights 1994 USERRA

To protect the employment Reemployment and retention rights of Civilian employees who serve
in uniform services, veterans and members of The Reserve. exempt employees must be paid
their full salary while out on leave less any compensation they receive for serving military they
receive same seniority based benefits such as vacation time 401k contribution Etc. less than 30
days - continue Health care coverage under the same terms Military leave should not be
considered as breaking service for Pension Plan purpose..

Old age Survivor and disability insurance program OASDI -To ensure a continuation of
income for individuals who are retired, spouses and dependent children of employees who are
deceased, and individuals who qualify for Social Security disability. this is funded by
contributions made by both employees and employers. employees must work 40 quarters or 10
years to qualify for this program. the individuals who qualify must be at least 62 years of age to
receive partial benefit and between 65 and 67 to receive full benefits depending on the year
they were born. the individuals who qualify for Social Security disability and receive benefits
must prove that they are unable to perform profitable work because they are totally disabled.

federal state unemployment insurance program - to provide partial income replacement for
a period of time to individuals who find themselves unemployed involuntarily . the employee not
being terminated for misconduct unemployed due to labor dispute and not refusing suitable
employment.
 Medicare 1965 - Providing Healthcare for individuals 65 and older which is not depend on their
income or ability to pay funded by employees and employers paying a percentage of salaries.

Medicare part A Hospital insurance which is considered mandatory and most individuals do not
have to pay for this coverage

Medicare Part B Healthcare expenses such as Physicians Services and Outpatient Care
Medicare part C : Individuals enrolled in part A and Part B with additional coverage such as
dental vision hearing prescription drug coverage Etc

Medicare Part D prescription drug coverage is considered optional