HRM Exam
csht
week_5_number_4.pptxThe Management of Benefits in Healthcare
Week 5 session 4
1
Health Care - Fee for service plans
Traditional fee-for-service medical plans are available through many employers but at a declining rate.
These plans offer the greatest freedom of choice in selecting health care providers.
Deductible.
Co-insurance.
Out-of-pocket maximum.
Employers may elect to self-fund the insurance vs. purchasing from a benefits provider.
2
Health Care - Managed Care options
Health Maintenance Organizations (HMOs)
An HMO provides comprehensive health care coverage to plan participants through a network of physicians and hospitals.
Traditionally, HMOs require a referral from the individual’s primary physician to receive care from a specialist.
Copays
Preferred Provider Organizations
Point-of-service plans
hybrid between an HMO & a fee-for-service
Network
Deductibles
Copays
The costs of services from an out-of-network provider are higher than from an in-network provider
Consumer-Driven Health Plans
High deductible plans
HSA’s & HRA’s
3
Consolidated Omnibus Budget Reconciliation Act (COBRA)
A law enacted in 1986 helps workers and their families keep their group health coverage due to certain qualifying events
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 similarly covered employee
Covers group health plans maintained by employers with 20 or more employees in the prior year
Qualifying events include:
voluntary or involuntary termination of the covered employee’s employment for reasons other than “gross misconduct”;
reduced hours of work for the covered employee;
covered employee becoming entitled to Medicare;
divorce or legal separation of a covered employee;
death of a covered employee;
loss of status as a “dependent child” under plan rules
4
Healthcare Legislation
5
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
The ACA prohibits plans from imposing preexisting condition exclusions for plan years beginning on or after January 1, 2014.
For prior years, HIPAA limited these exclusions and required plans to offset preexisting condition exclusion periods if the individual had prior health coverage.
Defines protected health information and it’s distribution rights
Healthcare Legislation cont.
Health Care Reform Act
The Patient Protection and Affordable Care Act
Penalty to employers for not offering health insurance
Covers children up to age 26
W-2 reporting
Required breaks for nursing moms
Tax on expensive health plans
Can’t exclude based on preexisting conditions
Eliminating Lifetime Limits on Insurance Coverage on essential benefits
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7
Cost Control Strategies for Healthcare Benefits
Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
Common Benefits Offered
Dental
Vision
Life
Disability
Plans Offered to:
Employees
Dependents
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Other Healthcare Benefits
Employee Retirement Income Security Act
Regulates operation of pension plans
Fiduciary responsibilities
Retirement Benefits & Age Discrimination
Age Discrimination in Employment Act (ADEA) prohibits forcing employees to retire as a specific age
Early or phased Retirement
Older Workers Benefit Protection Act (OWBPA) requires early retirement be offered on voluntary basis only
9
Legal Issues with Retirement Benefits
Two main types:
Defined-benefit plans
Defined-contribution plans
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Types of Retirement Plans
Defined-Benefit Plan (aka: Non-Contributory)
Employer provides all the funds
Amount is based on set criteria
Years of service
% of salary
Pension Benefit Guaranty Corp (PBGC)
Insures pension plans in the private sector
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Pension Plans
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
403(b) and 457 Plans only available to non-profits
401(k) plans available to both profit and non-profit
TIAA-CREF
Key issues:
Vesting
Portability
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Defined Contribution Plans
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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Time-Off Benefits
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Miscellaneous Benefits
Employee
Discounts
Educational
Benefits
Social & Recreational
Benefits
Family-Oriented
Benefits
Domestic Partners & Spousal Equivalents
Day care
Other 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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Flexible Benefits
