Healthcare Human Resource Management Flynn Mathis Jackson Langan

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Healthcare Human Resource ManagementFlynn
Mathis Jackson Langan
Chapter 13

• The Management of Benefits
• and Variable Pay in Healthcare

PowerPoint Presentation by Tonya L. Elliott, PHR
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Learning Objectives

• After you have read this chapter, you should be
  able to
• Describe the challenges that confront healthcare
  employees in providing benefits and variable pay
  programs
• Discuss why healthcare employers must offer
  competitive benefits programs to their employees
• Identify various types of benefits
• Explain the role that healthcare HR professionals
  must play in administering benefits
• Compare and contrast individual and team-based
  incentives

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Goals for Benefits

• Benefit
• An indirect reward given to an employee as part
  of an organizational membership, regardless of
  performance
• Benefits Needs Analysis
• A comprehensive look at all aspects of benefits
  in an organization
• Should consider what the employees want
• Should determine if the mix of benefits is
  accomplishing what it should

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Typical Benefit Dollar Spending
Figure 13-1
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Types of Benefits

• Government-Mandated Benefits
• Mandated benefits that employers in the United
  States must provide to employees by law
• Voluntary Benefits
• Benefits that employers voluntarily offer to
  compete and retain employees

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Types of Benefits
Figure 13-2
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Security Benefits

• Workers Compensation
• Provides benefits to persons injured on the job
• Unemployment Compensation
• A tax paid by the employer to state and federal
  unemployment compensation funds
• Percentage paid by employers determined by
  experience rates ( claims filed by people who
  leave)
• Severance Pay
• A benefit voluntarily offered by employers to
  some employees who lose their jobs

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Retirement Security Benefits

• Retirement Benefits Age Discrimination
• Age Discrimination in Employment Act (ADEA)
  prohibits forcing employees to retire as a
  specific age
• Early Retirement
• Older Workers Benefit Protection Act (OWBPA)
  requires early retirement be offered on voluntary
  basis only
• Phased Retirement
• Program designed to help employees retire in
  stages
• Options such as reduced work hours / a different
  job

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Social Security

• The Social Security Act of 1935
• Established a system providing
• Old age benefits
• Survivor benefits
• Disability benefits
• Retirement benefits
• Employers and employees share the cost through
  taxes on employees wages or salaries
• Administrator

Social Security Administration
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Pension Plans

• Pension Plans
• Retirement benefits established and funded by
  employers and employees
• Not a required benefit

Employee Retirement Income Security Act (ERISA)
Passed in 1974, regulates private pension plans
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Types of Pension Plans

• Traditional Pension Plans
• Defined-benefit plans
• Employees contributions based on actuarial
  calculations that consider the benefits to be
  received, and the methods used to determine such
  benefits
• Defined-contribution plans
• Employer makes annual payment to employees
  pension account
• Cash Balance Plans
• A hybrid based on ideas from both defined-benefit
  and defined-contributions plans a hypothetical
  account balance

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Pension Terms Concepts

• Contributory Plan
• Both employee and employer pay in money
• Non-Contributory Plan
• Employer provides all the funds
• Vesting
• Assurance that employees have worked the minimum
  number of years to qualify
• Portability
• The ability to move pension benefits from one
  employer to another

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Individual Retirement Options

• Individual Retirement Accounts (IRAs)
• A special account in which an employee can set
  aside funds that will not be taxed until the
  employee retires
• 401(k), 403(b), and 457 Plans
• Plans that allow the employee to reduce their
  current pay by a certain percentage, which is
  then used to fund a retirement plan
• Available for both non-profit and for-profit
  organizations

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Healthcare Benefits

• Common Plans Offered
• Medical
• Dental
• Prescription drug
• Vision
• Plans Offered to
• Employees
• Dependents

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Controlling Healthcare Benefit Costs

• Co-Payment
• Employees pay a portion of both insurance
  premiums and medical care
• Defined-Contribution Plans for Health Benefits
• Employer provides a defined contribution for
  employees use in selecting offered benefit plans

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Increases in Healthcare Benefits Costs to
Employers
Figure 13-3
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Controlling Healthcare Benefits Costs (contd)

• Managed Care
• Approaches that monitor and reduce medical costs
  through restrictions and market-system
  alternatives
• Preferred Provider Organization (PPO)
• A healthcare provider that contracts with an
  employer or an employer group to provide
  healthcare services to employees at a competitive
  rate
• Health Maintenance Organizations (HMO)
• Provides services for a fixed period on a prepaid
  basis
• Emphasizes both prevention and correction

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Controlling Healthcare Benefits Costs (contd)

• Utilization Review
• A review and audit of medical work, possibly
  including a second option, review of procedures
  used, or review of charges for procedures done
• Wellness Programs
• Programs designed to maintain or improve employee
  health before problems arise by encouraging
  personal lifestyle changes

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Healthcare Legislation

• Consolidated Omnibus Budget Reconciliation Act
• (COBRA)
• Former employees and/or their spouses and
  qualified dependents eligible for continuing
  coverage for 18 to 36 months
• Employer may charge no more than 102 of the
  premium costs to insure a similarly covered
  employee

Health Insurance Portability Accountability Act
(HIPAA)
Allows employees to switch their health insurance
plan
from one employer to another, regardless of
pre-existing health conditions
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Financial, Insurance, Other Benefits
Life/Disability Insurance
Educational Benefits
Other Benefits
Social Recreational Benefits
Family-Oriented Benefits
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Family and Medical Leave Act (FMLA)

• Covered Employees
• Those that worked at least 12 months and 1,250
  hours in the previous year
• Eligibility
• Employees allowed 12 weeks leave per year for
• Birth adoption, or foster-care placement of a
  child
• Caring for a spouse, child, or parent with a
  serious health condition
• Serious health condition of the employee
• Employees must be able to return to the same job
  or a job of equivalent status or pay

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Family Care Benefits
Adoption Benefits
Family Care Benefits
Child Care
Elder Care
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Benefits for Domestic Partners Spousal
Equivalents

• Domestic Partners Spousal Equivalents
• Data shows
• Increasing number of non-traditional families
• Significant percentage of domestic partners live
  together before marriage
• Gays and lesbians are more open about their
  lifestyle

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Time-Off Benefits

• Holiday Pay
• Vacation Pay
• Paid Time-Off (PTO)
• Leaves of Absence
• Personal
• Medical (FMLA)
• Military leave
• Election leave
• Jury leave
• Funeral/bereavement leave

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Benefits Administration

• Benefits Communication
• Benefits Statements
• A personal statement of benefits that translates
  benefits into dollar amounts
• HRIS and Benefits Communication
• Employee self-service kiosks allow employees to
  obtain benefits information online

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Flexible Benefits

• Flexible Benefits Plan
• flex or cafeteria plan
• Allows employees to select benefits they prefer
  from groups of benefits established by the
  employer
• Flexible Spending Accounts
• Allows employees to contribute pretax dollars to
  buy additional benefits
• Additional health care (including deductibles)
• Life insurance
• Disability insurance
• Dependent care benefits

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Benefits in the Future

• Continuing change
• More complex
• More outsourced
• Internet-based

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Types of Variable Pay Plans in Healthcare
Figure 13-5
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Individual Incentives

• Bonus
• A one-time payment
• Does not become part of the employees base pay
• Special Incentive Programs
• Special awards
• Recognition awards
• Service awards

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Group/Team-Based Variable Pay

• Award Distribution
• Same size award for each team member (equally) --
  vs. --
• Difference size award for each team member
  (equitable)
• Problems With Team-Based Incentives
• Distributed equally -- perceived as unfair to
  those who work harder, have more capabilities, or
  perform more difficult jobs
• Distributed equitably -- relatively low level of
  satisfaction with rewards that are same for all
• Successful Team Incentives
• Consider history of the group/team
• Consider size of team

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Organizational Incentives

• Basic Concept
• Overall results depend on organizational
  cooperation
• Purpose
• To produce better results be rewarding
  cooperation throughout the organization
• Effectiveness
• Should include all employees (non-exempt
  employees, managers, and executives)