Managing Employee Benefits Flashcards
Benefit
An indirect reward given to an employee or group of employees for organizational membership.
Gross-up
To increase the net amount of what the employee receives to include the taxes owed on the amount.
Flexible benefits plan
Program that allows employees to select the benefits they prefer from groups of benefits established by the employer.
Adverse selection
Situation in which only higher-risk employees select and use certain benefits.
Open enrollment
A time when employees can change their participation level in various benefit plans and switch between benefit options.
Third-party administrator
A vendor that provides administrative services to an organization.
Self-service
Technology that allows employees to change their benefit choices, track their benefits balances, and submit questions to HR staff members and external benefit providers.
Cafeteria benefit plan
Employees are given a budget and can purchase the bundle of benefits most important to them from the “menu” of options offered by the employer.
Workers’ compensation
Security benefits provided to workers who are injured on the job. Legally required.
No-fault insurance
Injured workers receive benefits even if the accident was their fault. Legally required.
Exclusive remedy
Workers’ compensation benefits are the only benefits injured workers may receive to compensate for a work-related injury. Legally required.
Three-legged stool
A model showing the three source of income to fund an employee’s retirement.
Vesting
Right of employees to receive certain benefits from their pension plans.
Portability
A pension plan feature that allows employees to move their pension benefits from one employer to another.
Retirement plan
Retirement program established and funded by the employer and the employees.
