RMI 3501 Lecture Notes - Lecture 1: Term Life Insurance, Defined Contribution Plan, Employee Assistance Program
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Topic 1
• What are EE benefits?
o In RM you deal w/ loss exposures
o What kind are there?
▪ Loss of income to an EE
▪ Medical loss expenses for an EE
▪ Loss of productivity of an ER
• Perils
o Random events
▪ Ex. Injury, illness, sickness, retirement, death, unemployment
o Personal issues and circumstances – loss of productivity
▪ EAP (employee assistance program)
• Benefits does not equal health care only
• Medical expenses
o Pre-retirement (Active EE)
▪ health Isuae pla
• Indemnity plan
• Managed care plan
o HMO, PPO, POS
• CDHP – consumer driven health plans
o HDHP + (HRA or HAS)
▪ Specialized coverage for narrowly defined perils
• Ex. Dental plans, Vision plans, Prescription drug insurance
o Post-retirement
▪ Medicare
▪ Post-retirement health benefit (PRHB)
• Ex. Medicare supplement
▪ PRLB (post-retirement life insurance)
• Loss of income- disability
o Disability (non-occupational)
▪ Sick leave (PTO=paid time off)
▪ Short-term disability insurance (STD)
• Ex. Maternity leave
▪ Long term disability insurance (LTD)
▪ AD&D: accidental death and dismemberment
▪ OASDI
o Disability (occupational)
▪ Workers compensation disability benefits
▪ OASDI – Social Security disability benefit
▪ STD & LTD if they cover occupational disability
▪ AD&D
o They are integrated to stop the over insured problem
• Loss of income- death
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o ER provided life insurance
▪ GTLI (group term life insurance)
• Very common with ERs
o AD&D
o OASDI = social security survivor benefit
o BTA = business travel accident
o Workers comp. death benefit
o Retirement plan survivor benefits
• Loss of income- Unemployment
o Severance package
o Unemployment insurance
• Loss of income- retirement
o Pension: is a defined benefit (DB) plan
o Defined contribution plan (DC)
o 401(k) or 403(b)
o Social security retirement benefits
▪ OASDI
• What benefits (if any) are required by law to be offered by ER
o OASDI
o Unemployment insurance
o WC
o Medicare
o Health Insurance
• View of EE benefits
o Boad ie: look at soeoe’s total opesatio
▪ 2 parts- current direct salary and value of EE benefit
o Total compensation view
o US Chamber of Commerce
▪ Survey – on average 40% of payroll is EE benefit
▪ Range from 18%-70%
o Broad view is any type of compensation other than direct, current wages paid for EE
o What types of compensations?
▪ ER’s shae of legall euied pogas
▪ Payments for private insurance and retirement plans
• Ex. Health, life, disability, retirement
▪ Payments for time not worked
• Ex. Vacation
▪ Extra cash payments (not part of salary)
• Ex. Bonus, tuition benefits
▪ Cost of goods and services to EEs
• E. Fee offee/eeages, luhes, ualified EE disout, o
additioal ost seies
o These are de Minimis fringes (very small, inexpensive)
o Narrow view
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Document Summary
Loss of income to an ee: medical loss expenses for an ee. Loss of productivity of an er: perils, random events, ex. Injury, illness, sickness, retirement, death, unemployment: personal issues and circumstances loss of productivity, eap (employee assistance program, benefits does not equal health care only, medical expenses, pre-retirement (active ee) (cid:862)health i(cid:374)su(cid:396)a(cid:374)(cid:272)e(cid:863) pla(cid:374) Indemnity plan: managed care plan, hmo, ppo, pos, cdhp consumer driven health plans, hdhp + (hra or has, specialized coverage for narrowly defined perils, ex. Dental plans, vision plans, prescription drug insurance: post-retirement, medicare, post-retirement health benefit (prhb, ex. Loss of income- disability: disability (non-occupational, sick leave (pto=paid time off, short-term disability insurance (std, ex. Loss of income- death: er provided life insurance, gtli (group term life insurance, very common with ers, ad&d, oasdi = social security survivor benefit, bta = business travel accident, workers comp. death benefit, retirement plan survivor benefits. Loss of income- unemployment: severance package, unemployment insurance.