Benefits and beyond c. 1 intro


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Benefits and beyond c. 1 intro

  1. 1. Chapter 1, Benefits and Beyond<br />Let’s start our venture. <br />Benefits and Beyond<br />Why are you taking this Course?<br />Chapter 1 -Introduction to Benefits<br />An adventure in the world of employee benefits<br />10/20/10<br />1<br />Thomas E. Murphy<br />
  2. 2. What’s in the News?<br />10/20/10<br />2<br />Thomas E. Murphy<br />
  3. 3. Health Care Reform and the Uninsured.<br />Will employees have enough savings for retirement?<br />What should we do about the underfunding of Social Security and Medicare?<br />Should we continue to rely on employer sponsorship of basic benefits?<br />Why are our benefits so expensive?<br />Benefits!<br />10/20/10<br />3<br />Thomas E. Murphy<br />
  4. 4. The business and human resource strategy compel employers to continue to offer benefits. In 2014, the law will require they offer health insurance.<br />If they do not offer benefits, they may be unable to recruit and retain employees.<br />But benefits costs are rising dramatically!<br />Employers are changing benefit designs and shift some of the risk and costs to its employees. <br />The Employer’s Dilemma<br />10/20/10<br />4<br />Thomas E. Murphy<br />
  5. 5. Retirement – sources of income<br />10/20/10<br />5<br />Thomas E. Murphy<br />
  6. 6. Health Care – sponsors<br />10/20/10<br />6<br />Thomas E. Murphy<br />
  7. 7. Why not just give them the money?<br />Query: <br />10/20/10<br />7<br />Thomas E. Murphy<br />
  8. 8. It is part of their HRM strategy. <br />Favorable tax treatment for employer and employee<br />Size and leverage<br />Expertise in design and administration<br />Enhance productivity <br />Respond to employee life cycle events<br />Some are mandated by law or funded by payroll taxes.<br />Because . . . <br />10/20/10<br />8<br />Thomas E. Murphy<br />
  9. 9. How does it link to business strategy?<br />How does it affect recruiting and selection?<br />What are the choices?<br />How do employee demographics play a role?<br />What do your product/service competitors offer?<br />Do you want long term employee commitment? <br />The HR Reward Strategy<br />10/20/10<br />9<br />Thomas E. Murphy<br />
  10. 10. Is the employer better suited to assume investment, inflation, and longevity risk with respect to retirement?<br />What happens when these are shifted to employees?<br />Why does the government sponsor and mandate benefits?<br />What was the intent of Social Security? Medicare, Medicaid?<br />What are some of the choices?<br />10/20/10<br />10<br />Thomas E. Murphy<br />
  11. 11. Typical benefits offered<br />Protect income & health<br />Retirement income<br />Health insurance<br />Life insurance<br />Disability protection<br />Paid time off<br />Equity<br />Work life benefits<br />Unemployment insurance<br />Worker’s compensation insurance<br />Long-term care<br />Social Security and Medicare payroll tax<br />Long Term Benefits<br />10/20/10<br />11<br />Thomas E. Murphy<br />
  12. 12. Developing Reward Strategy<br />Rewards are important<br />When selling lemonade<br />Cash – fixed pay<br />Variable pay – bonus (short term)<br />Equity (long term)<br />Benefits<br />Can compensation create value for the employer! How? <br />10/20/10<br />12<br />Thomas E. Murphy<br />
  13. 13. Benefits can ease a family’s financial burden.<br />10/20/10<br />13<br />Thomas E. Murphy<br />
  14. 14. For example:<br />Affect behaviors?<br />Do benefits help attract better employees?<br />Do benefits have a positive effect on employee behavior?<br />Do benefits effectively respond to life cycle events?<br />Do benefits encourage longer service?<br />Do they affect employee commitment and loyalty?<br />Do they enhance productivity?<br />Enhance productivity?<br />10/20/10<br />14<br />Thomas E. Murphy<br />
  15. 15. Human resource economics, principles, and actuarial concepts<br />The Benefits Model<br />Agency, Tournament, Efficiency wage theories<br />Adverse selection<br />What are the life cycle events that lead to providing benefits?<br />Topics we will cover:<br />10/20/10<br />15<br />Thomas E. Murphy<br />
  16. 16. How do retirement plans work?<br />What is a DBP, DCP, profit sharing, ESOP, Cash Balance Plan?<br />Are there plans more suitable for smaller employers?<br />What are the issues with respect to employer sponsored retirement plans?<br />How does the recession affect these plans?<br />Topics we will cover:<br />10/20/10<br />16<br />Thomas E. Murphy<br />
  17. 17. How effective are the pension plans in providing adequate retirement income for life?<br />How does employer sponsored health care work?<br />What is an indemnity plan, a PPO, POS, HMO, and an HSA?<br />What changes will occur as a result of the Pension Protection and Affordable Care Act?<br />Topics we will cover:<br />10/20/10<br />17<br />Thomas E. Murphy<br />
  18. 18. What are the design features of health care plans?<br />What is causing the current crisis in health care coverage in the U.S.?<br />What were the choices relating to health care reform? <br />How can we improve access to quality health care?<br />Topics we will cover:<br />10/20/10<br />18<br />Thomas E. Murphy<br />
  19. 19. Topics we will cover:<br />One Big Problem<br />There are 50 million in the U.S. without health insurance. <br />Who are they?<br />Why are they uninsured?<br />What is impact?<br />Are we dealing with the real problem?<br />Have we found the solution?<br />10/20/10<br />19<br />Thomas E. Murphy<br />
  20. 20. Topics we will cover:<br />Legal regulation<br />Legally mandated benefit<br />What are the legal compliance issues?<br />What are ERISA, and the PPA? How does the Internal Revenue Code apply? <br />What are statutorily mandated benefits: COBRA, HIPAA, FMLA, USERRA, PP&ACA? <br />10/20/10<br />20<br />Thomas E. Murphy<br />
  21. 21. Can we financially measure the value of benefits?<br />How?<br />Can we measure the value of a change in benefit design?<br />How?<br />Topics we will cover:<br />10/20/10<br />21<br />Thomas E. Murphy<br />
  22. 22. What is equity? Does it enhance productivity?<br />What are ISOs, NQSOs, RSUs, and SARs?<br />How do they relate to the helmet and skateboard.<br />Topics we will cover:<br />10/20/10<br />22<br />Thomas E. Murphy<br />
  23. 23. Topics we will cover:<br />Global Benefits – <br />How do other <br />countries provide <br />benefits?<br />10/20/10<br />23<br />Thomas E. Murphy<br />
  24. 24. Topics we will cover:<br />Unions represent 7% (12%) <br />How administered?<br />Collective bargaining and benefits – what are the employer and union obligations? <br />How are such benefits designed? <br />What are the current issues?<br />10/20/10<br />24<br />Thomas E. Murphy<br />
  25. 25. Topics we will cover:<br />One disability affects many<br />The Benefit Lineup<br />Life and Disability Insurance<br />Annuities<br />Long term care<br />Reverse mortgages<br />Social Security Disability<br />Worker’s Compensation<br />10/20/10<br />25<br />Thomas E. Murphy<br />
  26. 26. Convenience benefits – EAPs, home care, concierge services.<br />Benefit administration and planning- corporate governance, trust management, investment strategies, employee communications, and the role of management information systems relating to benefits. <br />Topics we will cover:<br />10/20/10<br />26<br />Thomas E. Murphy<br />
  27. 27. An Analytical Template<br />To Improve the quality of business decisions.<br />And, to better evaluate their impact.<br />To better allocate capital <br />How modern and efficient are our benefits?<br />10/20/10<br />27<br />Thomas E. Murphy<br />
  28. 28. Apply the “Ladder of Abstraction”<br />Articulate vision<br />Measurable Goals<br />What are operational drivers that affect vision<br />Get inputs, ideas, collect data<br />ID Range of HRM solutions that support operational drivers<br />Estimate potential financial impact.<br />Take baselines<br />Pilot with controls<br />Evaluate, adjust, implement, drop.<br />The Analytical Template<br />10/20/10<br />28<br />Thomas E. Murphy<br />
  29. 29. Benefits respond to life cycle events and enhance the quality of life . . <br />Such as a vacation in the French Alps<br />10/20/10<br />29<br />Thomas E. Murphy<br />
  30. 30. Or a comfortable retirement<br />10/20/10<br />30<br />Thomas E. Murphy<br />
  31. 31. Benefits – one size does not fit all<br />Linked to HR strategy and to business strategy<br />Make note of the diverse interests of various demographics in the workforce.<br />Benefits should link to these groups.<br />10/20/10<br />31<br />Thomas E. Murphy<br />