Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
87 Cards in this Set
- Front
- Back
|
legally mandated benefits
|
-social security and medicare
-unemployment insurance -FMLAWorkers compensation -Health benefit continuation (COBRA & ERISA) |
|
|
SSA
|
social security act
-introduced OASDI -established UI, unemployment insurance |
|
|
OASDI
|
Old age, survivors, and disability insurance. to be paid upon retirement, disability, or to dependents after death
|
|
|
Medicare
|
created in SSA 1965 ammendment
provided medical and hospital insurance to elderly |
|
|
FICA
|
federal insurance contributions act
gave IRS responsibility to collect taxes for OASDI and medicare |
|
|
SUI
|
State unemployment insurance
-states responsible for UI and setting FUTA tax rate |
|
|
FUTA
|
Federal unemployment tax act
-gives IRS responsibility to collect -employers subject to FUTA are those who pay employees who are not farm or household workers -subject if pay >$1.5k/quarter or 20+ weeks -farms if pay >$20k to all or 10+ workers -house if pay >$1k/quarter |
|
|
Reducing unemployment tax rates
|
-maintain accurate records for termination
-agressivley and diligently fight unjustified claims |
|
|
FMLA
|
Family medical leave act
DO NOT CONFUSE W/ FLSA (fair labor standards act) signed in 93 to protect workers who had to attend seriously ill family members |
|
|
FMLA provisions
|
-12 weeks of unpaid leave in 12months
-continuation of health benefits -resinstatementto same or equivalent position |
|
|
FMLA applies to:
|
*all public agencies and schools
*employers w/ 50+ employees at all worksites within a 75 mile radius, including telecommuters |
|
|
employees eligible for FMLA
|
-worker for an employer subject to FMLA
-employed >12 months -worjed >1,250 hours in the preceding 12 months from the day the leave begins. If no time records employee must prove otherwise or will be presumed to have requirement. -employees must confirm eligibility within 2 days of notice or advise when will be eligible or they will become immediately eligible without right of contest |
|
|
key employee exception
|
-may be denied reinstatement if employer states that it would cause substantial and grievous economic injury to tis operations
-must be among top 10% highest paid at worksite -must eb advised within reasonable period of time |
|
|
Reasons for FMLA leave
|
-birth; must be complete within 1 yer of birth. If both @ same then combined total can't exceed 12 weeks.
-adoption, completed within 1 yr. -provide care for spouse, son, daughter, parent with serious health condition -when employee unable to perform due to serious health conditions |
|
|
Types of FMLA leave
|
continous
reduced intermittent |
|
|
continuous FMLA Leave
|
absent for an extended period of time
|
|
|
reduced FMLA Leave
|
regular work schedule reduced for a period of time
|
|
|
intermittent FMLA Leave
|
absent from work due to a single illness or injury
-must schedule the leave -increments no less than one hour -provide 2 days notice whenever possible |
|
|
workers compensation
|
requires that employers assume responsibility for all work related injuries,illnesses and deaths
-state-enforced |
|
|
nosubscriber plans
|
pay totality of injury instead of insureance premiums
-rare and only make sense for large companies |
|
|
COBRA
|
consolidated omnibus budget reconciliation act
-an ammendment of ERISA -requires continued health benefits for co. w/ 20+ employees who already do so when qualifying events occur |
|
|
voluntary benefits
|
no federal laws requiring them but there are laws that regulate them:
*ERISA *OWPA *OBRA *COBRA *HIPAA *EGTRRA *REA *unemployment compensation ammendments of 1992 *small business protection act of 1996 *mental health parity at of 1986 |
|
|
ERISA
|
Employee retirement income security act
-set standards for private pensions and group welfare programs -ammended by COBRA and HIPAA |
|
|
OWBPA
|
older worker benefit protection act
-ammends ADEA -prohibits discrimination in employee benefit plans for older workers unless any age-based reductions ae justified by significant cost considerations -allows seniority systems as long as they don't require termination based on age -extends ADEA to benefits |
|
|
OWBPA waiver
|
employees may waive rights to make claims under act:
-must be written in a way that can be indertood by avg employee -must refer specifically to rights under adea -may not waive rights to actions subsequent to signing -mus advise right to consult attorney -can cancel within 7 days -must have 21 days to consider or in groups, 45 days |
|
|
OBRA
|
omnibus budget reconciliation act
required to honor medical child support when order by court and group health plans include adopted children |
|
|
deferred comp
|
tax deferred retirment plans
like pension, IRA, 401(k)s |
|
|
defined benefit
|
traditional pension plans, provides specific enefit upon retirement
|
|
|
defined contribution
|
contribution is known but final benefit is not
|
|
|
nonforfeitable claim
|
exists due to participant's service, unconditional and legally enforceable
|
|
|
plan administrator
|
person designated by plan sponsor to manage the plan
|
|
|
plan sponsor
|
entity that establishes plan
|
|
|
qualified plan
|
meets ERISA req. & provides tax advantages to both employees and employers
-to be qualified can't provide additional beneft to officers or highly compensated employees |
|
|
nonqualified plan
|
benefits exceed limitations of qualified plans or don't meet IRS req.
|
|
|
WPDA
|
welfare and pension disclosure act
ERISA replaced this required plan administrators to file descriptions of plans with DOL |
|
|
ERISA requirements
|
-requires filing reports
-sets eligibility requiremnts -sets vesting requirements for qualified pension plans -sets benefit accrual requirements -form and pament of benefits -funding requirements -fiduciary responsibility -admin and enforcement |
|
|
ERIS required filing reports
|
requires orgs to file:
1. SPD 2. Annual Report 3. Participant Benefit rights reports |
|
|
SPD
|
summary plan description
provides info about provisions, policies and rules of plan and actions they can take -must describe eligibility req. -must describe plan financing source and provider -must describe claims procedures and name of DOL office that will assist with HIPAA claims and remedies if claims are denied -must be distributed every 5 years or every 10 years if no change |
|
|
Annual Reports
|
-annual reports must be filed for all employee benefit plans including:
*financial statment *names & addreses of plan fiduciaries *names of last year's compensated employees,current relationship, nature of, and amount paid *# of employees in plan -audited by CPA or enrolled actuary licensed by DOL and dept of treasury to provide actuarial services for pension plans -become public records |
|
|
participant benefit rights reports
|
may request report of total benefits accrued on their behalf as well as nonforfeitable amount.
-max one/year |
|
|
ERISA records
|
-must be kept for 6 years from DOL filing
-rejected plans must me resubmitted within 45 days -filed within 210 days after end of plan year |
|
|
ERISA participant requirements
|
-1+ years w/ co
unless 100% vesting after 2 years, then 2+yrs -21+ years old -not excluded for reaching specified age -after reach requirements must become participants first day of plan year or 6 months after they do so, whichever comes first |
|
|
Vesting
|
point at which employees own the contributions employer has made to pension plan wether or not they remain employed
|
|
|
ERISA vesting standards
|
refers only to funds contributed by employer, not employee.
*Cliff vesting - max at 5 years for qualified plans *Graded vesting -20% vesting after 3 years and 20%/year after that. Full vesting after 7 years |
|
|
Cliff vesting
|
participants become 100% vested after a specified period of time
|
|
|
graded vesting
|
schedule for partial vesting each year for a specified # of years
|
|
|
ERISA
Benefit Accrual requirements |
sets requirements for how much entitled to receive if they leave before retirement
entitled to all selfcontributed funds |
|
|
ERISA Form and payment of benefits
|
sets requirements for when payments are made and alternate payees issued by court
-defines funding requirements and safeguarding of funds |
|
|
funding
|
-enrolled actuary determins money required to fund
-required to be maintained in account separate from business operating funds |
|
|
fiduciary responsibility
|
holds assets in behalf of and must act in the best intereste of participants and beneficiaries
-fiduciaries held personally liable fomr breach of responsibility during their time acting as -no transactions b/w fiduciaries and parties of interest |
|
|
enforcement
|
-fines from $5-100k and up to 1 yr prison additional civil actions may be taken through DOL
|
|
|
EGTRRA
|
economic growth and tax releif reconciliation act of 2001
-increased contribution limits and catch-up contributions to 50+yr employees |
|
|
defined benefit plans
|
employer provides pension based on formula; salary and length of service
employers pay specified benefit |
|
|
CBP
|
cash balance plan
-hybrid of defined benefit and defined contribution plans -less costly to employers -account is credited each year with a pay credit (such as 5% of comp) and an interest credit (fixed rate or variable linked to an index). changes in value of plan's investments don't directly affect the benefit amounts. investment risks are the employer's -it is also portable: *can take benefits as lump sum at retirement *vested participants can choose (with consent from their spouses) to receive their accrued benefits in lump sums if they terminate employment prior to retirement risk of not benefiting older employees |
|
|
defined contribution plans
|
both fund individual retirement accounts, contribution is fixed but final benefit is not due to investment
*profit sharing plans *money purchase plans *target benefit plans *ESOPs *401(k)plans |
|
|
profit sharing plans
|
defined contributions plan
aka discretionary contributions employers contribute deferred comp based on company earnings -max, of 25% or $40k/year -when calc contributions can only use first $200k of comp -work well fo co.'s with erratic profit levels |
|
|
money purchase plans
|
defined contributions plan
-fixed % of employee earnings to defer -works well for org.'s w/ stable earnings -limits are same as profit sharing plans |
|
|
target benefit plans
|
defined contributions plan
-hybrid of money purchase and defined benefit -contributions calculated using actuarial formulas to claculate amount needed to reach predetermined contribution at retirement |
|
|
ESOP
|
defined contributions plan
employee stock ownership plan own equity, post-enron limitation were placed on amount of it as part of deferred comp. plan |
|
|
401(k)
|
defined contributions plan
-established by the revenue act of 1978 -may defer fron comp, limits same as EGTRRA -both employees and employers may contribute 403b - for non-profit workers 457 - for public employees -employees responsible for fund management -may not provide greater benefits to HCEs -ADP conducted yearly to test if plan is within limits |
|
|
HCE
|
highly compensated employee
-$90k+ comp & -owns 5%+ of co. & -is in top 20% of employee comp for co. -tested through ADP |
|
|
ADP
|
actual deferral percentage test
tests if HCEs are benefiting more than non-HCEs from 401(k) if so must correct or lose tax benefits |
|
|
REA
|
retirement equity act of 1984
lowered age limits for participation in pension plans and vesting -reqired written approval from spouse if waived survivor benefits |
|
|
Unemployment compensation ammendments of 1992
|
-reduced rules for rolling over lump sums from qualified retirement plans into other plans
-some made 20% tax withholding |
|
|
small business job protection act of 1996
|
-redefined HCEs
-simplified ADP tests for 401(k)s to make suitable for small businesses |
|
|
nonqualified deferred comp
|
-not protected by ERISA
-generally at excutive level "top hat" plans *grantor or rabbi trusts *excess deferral plans |
|
|
Grantor/rabbi trusts
|
nonqualified deffered comp plans for officers, HCEs and directors
unsecured and subject to claims by organization's creditors -taxable as ordinary income |
|
|
Excess deferral plans
|
org. makes contributions to nonqualified plan to reduce impact of ADPs to HCEs
|
|
|
Health and welfare benefits
|
*medical insurance
*dental insurance *vision insurance *prescription coverage *life insurance |
|
|
Medical insurance
|
*HMOs
*PPOs *POSs *EPOs *PHOs *FFSs |
|
|
HMOs
|
health maintenance orgs.
-focus on preventive care -use gatekeeper to get to specialist |
|
|
PPOs
|
preferred provider orgs.
-use network of healthcare providers w/o gatekeeper -employees make co-payments and pay deductibles |
|
|
POSs
|
point of service plans
-include network but allow for referrals outside network -when doctor refers it is covered, w/out referral coinsurance payment required |
|
|
EPOs
|
exclusive provider orgs.
-has network and includes hospital -epo physicians only see patients that are part of the EPO -if patient sees physician outside EPO, not covered |
|
|
PHOs
|
physician hospital orgs.
physicians join w/ hospital to market and negotiate contracts -unique in that they contract directly w/ employer orgs. |
|
|
FFSs
|
fee for service plans
most expensive becuae places no restrictions on doctors or hospitals available |
|
|
plan options
|
-purchase insurance coverage (small orgs.)
-self-funded plan -partially self-funded plan |
|
|
self funded plan
|
-employer creates claim find and pays out
-annual discrimination tests to make sure HCEs don't use disproportionately -may use thrid party adimistrator, claim management or admin service only plan to manage claims |
|
|
partially self funded plan
|
use stop-loss insurance to prevent a single catastrophic event from devastating fund
-agrees upon preset max coverage |
|
|
imputed income
|
indirect comp. paid by employees
-life insurance in excess of $50 k is considered this |
|
|
flexible spending accounts
FSAs |
-authorized by revenue act of 1978
-aka section 125 plans -allow employees to set aside pre-tax funds for medical expenses -any funds left and not used are forfeited -also dependent care account , section 129, up to $5k |
|
|
COBRA requirements
|
-co. w/ 20+ employes who provide group health coverage must continue coverage when qualifying events occur...see cobra table
|
|
|
HIPAA
|
-prohibits discrimination on the basis of health status
-limits health insurance restrictions for pre-existing conditions -insurers may only terminate group coverage if no payment, misrepresentation, or does not comply w/ plan provisions -required PHI |
|
|
PHI
|
protected health info.
|
|
|
mental health parity act of 1986
|
-required insures to provide same limits to mental health benefits as to physical
|
|
|
paid time off
|
*vacation pay
*holiday pay *paid time off -combined all forms of time off into one *sabbaticals and leaves of absence *jury duty *bereavement leave *parental leave |
|
|
Adoption assistanve
|
max of $10.16k to be excluded from gorss income to do so
|
