Lecture 3 Employee Benefit Planning and Management

1
Lecture 3Employee Benefit Planning and Management

• What are the employers objectives?
• What types of benefits should be provided?
• How should the plan be funded?
• What provisions for controlling costs should be
  included?
• How should the plan be communicated?
• To what extent should the administrative
  functions be outsourced?

2
What are the employers objectives?

• Need for objectives
• Typical situation
• Guidelines vs. specific objectives
• Examples of actual objectives
• To establish an employee benefit plan that
  channels as large a portion of the benefits as
  possible to the owners
• To reduce employee turnover
• To motivate employees to be more productive
• Who should receive benefits?

3
What types of benefits should be provided?

• Determining needs
• Employers perception of employees needs
• What competitors are doing
• Collectively bargained benefits
• Tax laws and regulations
• Market research
• Personal interviews
• Simplified questionnaires
• Sophisticated research methods
• Life-cycle benefits
• Different plans for different groups of employees

4
How should the plan be funded?

• Employer pay all
• Contributory financing

5
What provisions for controlling costs should be
included?

• Probationary periods
• Benefit limitations
• Disability income
• Orthodontics
• Alternative funding methods (Chapter 14)
• Competitive bidding among insurers or
  administrators
• Specific program provisions
• Managed care
• Wellness programs
• Employee assistance plans

6
How should the plan be communicated?

• Effective communication
• Methods of communication
• Audiovisual presentations
• Meetings with employees
• Printed material
• Interactive voice-response systems
• Computers
• Caveat Be very careful what you say!

7
To what extent should the administrative
functions be outsourced?

• Reasons for outsourcing
• Expertise
• Confidentiality
• Functions outsourced
• COBRA administration
• Administration of medical and dental claims
• Utilization review
• Record keeping
• Communication
• Decision to outsource