Employee Benefits: A Primer for Human Resource Professionals / Edition 3

Employee Benefits: A Primer for Human Resource Professionals / Edition 3

by Joseph J. Martocchio

ISBN-10: 0073381292

ISBN-13: 9780073381299

Pub. Date: 12/04/2007

Publisher: McGraw-Hill Companies, The

Joseph Martocchio's Employee Benefits: A Primer for Human Resource Professionals was written to promote a fuller understanding of employee benefits programs among students enrolled in college-level compensation and benefits course. It’s relevant to students who plan to be general managers, who deal with a variety of human resource issues in


Joseph Martocchio's Employee Benefits: A Primer for Human Resource Professionals was written to promote a fuller understanding of employee benefits programs among students enrolled in college-level compensation and benefits course. It’s relevant to students who plan to be general managers, who deal with a variety of human resource issues in their day-to-day jobs, as well as to those who expect to be human resource practitioners. The real-world focus of Martocchio’s text is evident on every page, as he seeks to balance current academic thought with brief examples of contemporary benefits practices in business.

Martocchio’s Employee Benefits is forward-thinking and seeks to bring the topic into the mainstream of compensation understanding. The Third Edition continues to be concisely written, highlighting key issues in order to provide the reader with a solid foundation for discussing benefits issues with employee benefits professionals. As practices and laws affecting benefits change frequently, Martocchio stays on the cusp of recent developments, capturing all recent changes with his Third Edition.

Product Details

McGraw-Hill Companies, The
Publication date:
Edition description:
Older Edition
Product dimensions:
7.60(w) x 8.40(h) x 0.73(d)

Table of Contents

Introduction to Employee Benefits     1
Introducing Employee Benefits     3
Defining and Exploring Employee Benefits     4
Defining Employee Benefits     5
Employee Benefits in the Total Compensation Scheme     7
The Field of Employee Benefits Practice     8
Legally Required Benefits     9
Discretionary Benefits     10
Origins of Employee Benefits     14
Legal and Regulatory Influences on Discretionary Benefits Practices     15
Strategic Planning for the Benefits Program     16
Basic Strategic Planning Concepts     17
Approaches to Strategic Benefit Planning     19
Information Used in Strategic Benefit Planning     21
External Environment     21
Internal Environment     26
Plan for the Book     27
The Economics of Employee Benefits     31
Why do Employers Offer Benefits?     32
Cost Advantage     33
Recruiting Certain Types of Workers     36
Tax Incentives     37
Who Pays for Benefits?     38
Two Extensions     44
Government Mandates     44
Differences in Benefit Cost Increases across Groups ofWorkers     46
Summary     47
Regulating Employee Benefits     49
Labor Unions and Employee Benefits: The National Labor Relations Act of 1935     51
The Internal Revenue Code     53
The Fair Labor Standards Act of 1938     55
The Employee Retirement Income Security Act of 1974     56
Defining Pension Plans and Welfare Plans     58
Scope of Coverage for Pension Plans and Welfare Plans     60
Protection of Employee Rights     60
Amendments to the Internal Revenue Code Relating to Retirement Plans     63
Jurisdiction, Administration, Enforcement, Joint Pension Task Force, and Other Issues     63
Plan Termination Insurance     64
The Consolidated Omnibus Budget Reconciliation Act of 1985     67
The Health Insurance Portability and Accountability Act of 1996     69
The Pension Protection Act of 2006     71
Federal Equal Employment Opportunity Laws     72
The Equal Pay Act of 1963     72
Title VII of the Civil Rights Act of 1964     74
The Age Discrimination in Employment Act of 1967 (ADEA)     75
The Pregnancy Discrimination Act of 1978     76
The Americans with Disabilities Act of 1990     76
The Civil Rights Act of 1991     77
Summary     78
Retirement, Health, and Life Insurance     81
Employer-Sponsored Retirement Plans     83
Defined Retirement Plans     86
Origins of Employer-Sponsored Retirement Benefits     86
Trends in Retirement Plan Coverage and Costs     86
Qualified Plans     87
Minimum Standards for Qualified Plans     87
Defined Benefit Plans     92
Benefit Formulas     92
Nondiscrimination Rules: Testing     94
Accrual Rules     95
Minimum Funding Standards     96
Benefit Limits and Tax Deductions     96
Defined Contribution Plans     96
Individual Accounts     97
Investments of Contributions     97
Employee Participation in Investments     97
Nondiscrimination Rules: Testing     97
Accrual Rules     98
Minimum Funding Standards     98
Contribution Limits and Tax Deductions     98
Types of Defined Contribution Plans     98
Section 401(k) Plans     99
Profit-Sharing Plans     99
Stock Bonus Plans     100
Employee Stock Ownership Plans (ESOPs)     101
Savings Incentive Match Plans for Employees (SIMPLEs)     101
Section 403(b) Tax-Deferred Annuity Plans     101
Section 457 Plans     102
Hybrid Plans     103
Cash Balance Plans and Pension Equity Plans     103
Target Benefit Plans     107
Money Purchase Plans     108
Age-Weighted Profit-Sharing Plans     108
Integrating Qualified Pension Plans with Social Security     109
Integration Methods     109
Uniform Disparity under the Excess and Offset Approaches     111
Plans Ineligible for Integration     111
Summary     111
Employer-Sponsored Health Insurance Programs     115
Defining and Exploring Health Insurance Programs     116
Origins of Health Insurance Benefits     117
Health Insurance Coverage and Costs     118
Individual vs. Group Insurance Coverage     120
Regulation of Health Insurance Programs     121
Federal Regulation     121
State Regulation     124
Multiple- vs. Single-Payer Health Care Systems in the U.S.     125
Fee-for-Service Plans     127
Types of Medical Expense Benefits      128
Features of Fee-for-Service Plans     129
Major Medical Insurance Plans: Supplemental and Comprehensive     132
Managed Care Plans     132
Health Maintenance Organizations     132
Types of Health Maintenance Organizations     133
Features of Health Maintenance Organizations     133
Preferred Provider Organizations     135
Features of Preferred Provider Organizations     135
Point-of-Service Plans     137
Specialized Insurance Benefits     137
Dental Insurance     137
Vision Insurance     139
Prescription Drug Benefits     140
Mental Health and Substance Abuse     143
Maternity Care     144
Consumer-Driven Health Care     145
Retiree Health Care Benefits     148
Summary     149
Employer-Sponsored Disability Insurance and Life Insurance     153
Disability Insurance     154
Origins of Disability Insurance     155
Short-Term Disability Insurance Programs     156
Long-Term Disability Insurance Programs     157
Funding Disability Insurance Programs     158
Employee and Employer Tax Obligations      159
Relationships between Company-Sponsored Disability Plans and Benefits Laws     160
Life Insurance     162
Origins of Life Insurance     163
Coverage and Costs of Life Insurance     163
Types of Life Insurance Programs     163
Group Term Life Insurance     164
Tax Treatment of Group Term Life Insurance     166
Universal Life Insurance     168
Accidental Death and Dismemberment Insurance     168
Summary     168
Government-Mandated Social Security and Workers' Compensation Programs     171
Origins of Social Security and Workers' Compensation Programs     172
Introduction to the Social Security Programs     173
Employers Required to Participate in Social Security Programs     174
Administration of Social Security Programs     176
Social Security Numbers     177
Old-Age, Survivor, and Disability Insurance (OASDI)     177
Qualifying for OASDI Benefits     178
Determining Benefit Amounts     178
Old-Age Benefits     179
Survivor Benefits     184
Disability Benefits     185
Medicare     186
Eligibility Criteria for Medicare Benefits      188
Medicare Part A Coverage     188
Medicare Part B Coverage     189
Medigap Insurance     189
Medicare Part C: Medicare Advantage     189
Medicare Prescription Drug Benefit     190
Medicare as the Primary or Secondary Payer     191
Financing OASDI and Medicare Programs     192
Unemployment Insurance     194
Eligibility Criteria for Unemployment Insurance Benefits     194
Unemployment Insurance Benefit Amounts     195
Financing Unemployment Insurance Benefits     196
Depositing FUTA Money     196
State Compulsory Disability Laws (Workers' Compensation)     196
Coverage of Workers' Compensation Programs     197
Cost of Workers' Compensation Insurance     198
Workers' Compensation Claims     198
Types and Amounts of Workers' Compensation Benefits     199
Employers' Rights under Workers' Compensation Programs     201
Financing Workers' Compensation Programs     204
Employer and Employee Tax Obligations     205
Relationship between Workers' Compensation and Benefits Laws     205
Summary     206
Services     211
Paid Time-Off and Flexible Work Schedules      213
Defining and Exploring Paid Time-Off Programs     214
Paid Time-off Practices     215
Holidays     216
Vacation     217
Sick Leave     219
Personal Leave     220
Integrated Paid Time-Off Policies or Paid Time-Off Banks     220
Bereavement or Funeral Leave     221
Jury Duty and Witness Duty Leaves     221
Military Leave     222
Nonproduction Time     224
On-Call Time     224
Sabbatical Leave     225
Volunteerism     226
Leave Under the Family and Medical Leave Act of 1993     226
Flexible Scheduling     230
Flextime Schedules     230
Compressed Workweek Schedules     231
Telecommuting     231
Summary     233
Accommodation and Enhancement Benefits     235
Defining Accommodation and Enhancement Benefits     236
Rationale for Accommodation and Enhancement Benefits     236
Tax Benefits for Employers and Employees     237
The Mental and Physical Well-Being of Employees and Family Members     237
Employee Assistance Programs     237
Wellness Programs      243
Family Assistance Programs     246
Educational Benefits for Employees     247
Educational Assistance Programs     247
Tuition Reimbursement Programs     249
Scholarship Programs     249
Support Programs for Daily Living     250
Transportation Services     250
Physical Fitness     251
Summary     251
Employee Benefits: Design, Nonqualified Plans, and Global Issues     255
Managing the Employee Benefits System     257
A Comparison of Traditional Benefits Plans and Flexible Benefits Plans     258
A One-Size-Fits-All Approach     258
Employer Choice to Customize Benefits     259
Cafeteria Plans under Section 125     260
Types of Flexible Benefit Plan Arrangements     262
Communicating the Employee Benefits Program     266
Legal Considerations in Benefits Communication     266
The "Good Business Sense" of Benefits Communication     268
Managing the Costs of Employee Benefits     272
Cost-Control Methods     273
Employee Education     274
Utilization Reviews     274
Case Management     275
Provider Payment Systems      276
Lifestyle Interventions     276
Outsourcing the Benefits Function     277
The Future of Employee Benefits     278
Changing Employment Contract     278
Accountability to Shareholders     279
Recent and Proposed Legislation     279
Domestic Partner Benefits and Same-Sex Marriage Issues     280
Generational Diversity and Workplace Conflict     281
Presidential-Year Politics     282
Summary     283
Nonqualified Plans for Highly Paid and Executive Employees     285
Introduction to Nonqualified Plans     286
Hallmarks of Executive Retirement Benefits     287
Objectives     287
Funding Status     288
Mandatory Retirement Age     289
Nonqualified Retirement Plans for Executives     290
Excess Benefit Plans     290
Supplemental Executive Retirement Plans (SERPs)     290
Contrasting Excess Benefit Plans and SERPs     292
Funding Mechanisms and Tax Obligations     292
General Assets     293
Corporate-Owned Life Insurance     293
Split-Dollar Life Insurance     293
Rabbi Trusts     294
Secular Trusts     294
Employee-Owned Annuities     294
Stock Option Plans     295
Basic Terminology     295
Incentive Stock Options     295
Nonstatutory Stock Options     296
Restricted Stock     296
Phantom Stock     296
Discount Stock Options     297
Stock Appreciation Rights     297
Reporting Requirements     297
U.S. Department of Labor     297
The Internal Revenue Service     298
Securities and Exchange Commission     298
The Sarbanes-Oxley Act     302
Concluding Comments     302
Summary     303
Global Employee Benefits at a Glance     305
Not all Employee Benefits are Alike     306
North America     307
Canada     307
Mexico     309
South America     311
Brazil     311
Argentina     312
Europe     313
France     314
Germany     316
Spain     317
United Kingdom     318
The Netherlands     320
Italy     321
Poland      322
Sweden     323
Russia     324
Asia     325
The People's Republic of China     326
Hong Kong     327
Japan     329
South Korea     331
India     332
Saudi Arabia     333
Africa     335
South Africa     335
Australia     336
Summary     337
Ancillary Exercises with Answers for Selected Chapters     343
Glossary     351
Index     375

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