Human Resource Human Resource ManagementManagement

Presentation Presentation OnOn

Insurance BenefitsInsurance Benefits

Presented to: Sir Tasman PashaPresented to: Sir Tasman Pasha

Presented by: Taha KhanPresented by: Taha Khan

Roll no: 07-06Roll no: 07-06

BSIT (3BSIT (3rdrd Semester) Semester)

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ContentsContents

What are benefits?What are benefits?

Worker’s CompensationWorker’s Compensation

Health and Disability InsuranceHealth and Disability Insurance

Trends in Health Care Cost ControlTrends in Health Care Cost Control

Long-Term Care InsuranceLong-Term Care Insurance

Life InsuranceLife Insurance

What are Benefits?What are Benefits?

Benefits basically are the indirect financial and non Benefits basically are the indirect financial and non financial payments employees receive for continuing their financial payments employees receive for continuing their employment with the company.employment with the company.

e.g.e.g.

health and life insurance, pensions and child care health and life insurance, pensions and child care assistance.assistance.

Insurance BenefitsInsurance Benefits

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Workers’ CompensationWorkers’ Compensation

Provides income and medical benefits to work-related Provides income and medical benefits to work-related accident victims or their dependants, regardless of fault.accident victims or their dependants, regardless of fault.

Every state has its own workers’ compensation law, and Every state has its own workers’ compensation law, and some run their own insurance programs.some run their own insurance programs.

Most require employers to carry workers’ compensation Most require employers to carry workers’ compensation insurance with private state approved insurance insurance with private state approved insurance companies.companies.

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How benefits are determined?How benefits are determined?

Workers’ compensation benefits can be monetary or Workers’ compensation benefits can be monetary or medical.medical.

In case of a worker’s death or disablement, person’s In case of a worker’s death or disablement, person’s dependants receive a cash benefit based on prior dependants receive a cash benefit based on prior earnings.earnings.

If the injury causes a specific loss, the employee may If the injury causes a specific loss, the employee may receive additional benefits based on statutory list of receive additional benefits based on statutory list of losses.losses.

In addition to these cash benefits, employers must In addition to these cash benefits, employers must furnish medical, surgical, and hospital services as furnish medical, surgical, and hospital services as required for the employee.required for the employee.

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Americans with Disabilities Act (ADA)Americans with Disabilities Act (ADA)

The employment provisions of the Americans with The employment provisions of the Americans with Disabilities Act (ADA) influence employers’ workers’ Disabilities Act (ADA) influence employers’ workers’ compensation procedures.compensation procedures.

The ADA makes it more important that injured The ADA makes it more important that injured employees get back to work.employees get back to work.

Failing to let an employee who is on injury-related Failing to let an employee who is on injury-related workers’ compensation return to work, or not workers’ compensation return to work, or not accommodate him or her, could lead to law suit under accommodate him or her, could lead to law suit under ADA.ADA.

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Controlling Workers’ Compensation Controlling Workers’ Compensation CostsCosts

It is important to control workers’ compensation claims It is important to control workers’ compensation claims (and therefore costs).(and therefore costs).

Usually the employer’s insurance company pays the Usually the employer’s insurance company pays the claim, the costs of employer’s premiums reflect the claim, the costs of employer’s premiums reflect the amount of claims.amount of claims.

These costs recently grew by 3.5% overall while wages These costs recently grew by 3.5% overall while wages grew by 2.4%.grew by 2.4%.

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Ways to reduce workers’ Ways to reduce workers’ compensation claimscompensation claims

Screen out accident prone workers.Screen out accident prone workers.

Reduce accident causing conditions in your facilities.Reduce accident causing conditions in your facilities.

Reduce the accidents and health problems that trigger Reduce the accidents and health problems that trigger these claims.these claims.

It is important to get injured employees back on the job It is important to get injured employees back on the job as soon as possible.as soon as possible.

Case management is a popular cost-control option.Case management is a popular cost-control option.

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Hospitalization, Health, and Disability Hospitalization, Health, and Disability InsuranceInsurance

It helps protect employees against hospitalization costs It helps protect employees against hospitalization costs and the loss of income arising from off-the-job accidents and the loss of income arising from off-the-job accidents or illness.or illness.

Many employers purchase the insurance from life Many employers purchase the insurance from life insurance companies, casualty insurance companies, insurance companies, casualty insurance companies, Blue Cross and Blue Shield organizations.Blue Cross and Blue Shield organizations.

Some contract with health maintenance organization or Some contract with health maintenance organization or preferred provider organizations.preferred provider organizations.

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CoverageCoverage

Most health insurance plans provide at least basic Most health insurance plans provide at least basic hospitalization and surgical and medical insurance.hospitalization and surgical and medical insurance.

Insurance is generally available to all employees, Insurance is generally available to all employees, including new ones, regardless of health or physical including new ones, regardless of health or physical condition.condition.

Disability insurance provides income protection from Disability insurance provides income protection from salary loss due to illness or accident.salary loss due to illness or accident.

Some insurance plans provide major medical coverage Some insurance plans provide major medical coverage to meet the high medical expenses resulting from long to meet the high medical expenses resulting from long term or serious illness.term or serious illness.

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Health Maintenance Organizations Health Maintenance Organizations (HMOs)(HMOs)

The HMO is a medical organization consisting of The HMO is a medical organization consisting of specialists often operating out of a health care center.specialists often operating out of a health care center.

It provides routine medical services to employees who It provides routine medical services to employees who pay a nominal fee.pay a nominal fee.

A “gatekeeper” doctor approves appointments with A “gatekeeper” doctor approves appointments with specialist doctors.specialist doctors.

The HMO receives a fixed annual fee per employee from The HMO receives a fixed annual fee per employee from the employer regardless of whether it provides that the employer regardless of whether it provides that person service.person service.

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Preferred Provider OrganizationsPreferred Provider Organizations(PPOs)(PPOs)

PPOs are groups of health care providers that contract PPOs are groups of health care providers that contract with employers , insurance companies, or third-party with employers , insurance companies, or third-party payers to provide medical care services at a reduced payers to provide medical care services at a reduced rate.rate.

Unlike HMOs , PPOs let employees select providers Unlike HMOs , PPOs let employees select providers from a relatively wide list, and see them in their offices , from a relatively wide list, and see them in their offices , often without gatekeeper doctor approval.often without gatekeeper doctor approval.

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Mental Health BenefitsMental Health Benefits

The WHO estimates that more than 34 million people in The WHO estimates that more than 34 million people in the United States between the ages of 18 and 64 suffer the United States between the ages of 18 and 64 suffer from mental illness.from mental illness.

Mental health treatment costs are rising because of Mental health treatment costs are rising because of widespread drug and alcohol problems and the fact that widespread drug and alcohol problems and the fact that other health claims are higher for employees with high other health claims are higher for employees with high mental claims.mental claims.

Some employers are slowing the rise in mental health Some employers are slowing the rise in mental health benefits by monitoring the benefit’s costs. benefits by monitoring the benefit’s costs.

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Trends in Health Care Cost ControlTrends in Health Care Cost Control

Employers are taking steps to rein spiraling health careEmployers are taking steps to rein spiraling health carecosts. Many do this in conjunction with cost-containmentcosts. Many do this in conjunction with cost-containmentspecialists. Several cost-control trends are:specialists. Several cost-control trends are:

Communication, Involvement, and EmpowermentCommunication, Involvement, and Empowerment

Premiums and Co-PaysPremiums and Co-Pays

Prevention ProgramsPrevention Programs

Health Savings AccountsHealth Savings Accounts

Claim AuditsClaim Audits

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Communication, Involvement, and Communication, Involvement, and EmpowermentEmpowerment

Getting employees more involved and empowered in Getting employees more involved and empowered in health care program is important.health care program is important.

75% of human resource managers say that consumer 75% of human resource managers say that consumer education would be the most critical tactic driving cost education would be the most critical tactic driving cost control in the years immediately ahead.control in the years immediately ahead.

Make sure the employees know the costs of the medical Make sure the employees know the costs of the medical decisions they are making, and involve them more in decisions they are making, and involve them more in plan administration.plan administration.

Online selection software allows employees to choose Online selection software allows employees to choose the best of the employer’s health care offerings.the best of the employer’s health care offerings.

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Premiums and Co-PaysPremiums and Co-Pays

More employers are requiring employees to pay higherMore employers are requiring employees to pay higher

premiums or a greater share of out-of-pocket costs in thepremiums or a greater share of out-of-pocket costs in the

form of higher deductibles and co-payments.form of higher deductibles and co-payments.

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Prevention ProgramsPrevention Programs

Almost all large employers offer some form of preventive Almost all large employers offer some form of preventive services as benefits.services as benefits.

Clinical preventionClinical prevention include things like immunizations include things like immunizations and routine checkups. and routine checkups.

Health promotion and disease prevention Health promotion and disease prevention programs programs include things like seminars and incentives aimed at include things like seminars and incentives aimed at improving health by changing unhealthy behaviors or improving health by changing unhealthy behaviors or modifying life styles.modifying life styles.

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Health Savings Accounts (HSA)Health Savings Accounts (HSA)

The Medicare Modernization Act of 2003 contains a The Medicare Modernization Act of 2003 contains a provision allowing employers to establish tax-free health provision allowing employers to establish tax-free health savings accounts (HSA).savings accounts (HSA).

After depositing pre-tax pay in their HSAs, employees or After depositing pre-tax pay in their HSAs, employees or their families can use these to pay for “low dollar” their families can use these to pay for “low dollar” medical expenses.medical expenses.

Employers typically combine HSA plans with health care Employers typically combine HSA plans with health care plans that have large out-of-pocket deductions.plans that have large out-of-pocket deductions.

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Claim AuditsClaim Audits

It makes little sense to initiate things like prevention It makes little sense to initiate things like prevention plans or HSAs when employers are paying out plans or HSAs when employers are paying out thousands or millions of dollars on erroneous claims.thousands or millions of dollars on erroneous claims.

With health care plans becoming ever-more customized With health care plans becoming ever-more customized and therefore complicated, its increasingly easy for and therefore complicated, its increasingly easy for medical claims errors to occur.medical claims errors to occur.

Setting standards for errors, and then aggressively Setting standards for errors, and then aggressively auditing the claims being paid may be the most direct auditing the claims being paid may be the most direct way to reduce employer health care expenses.way to reduce employer health care expenses.

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Other Cost-Control OptionsOther Cost-Control Options

Some employers are using defined contribution health Some employers are using defined contribution health care plans, each employee has a specific amount care plans, each employee has a specific amount medical allotment that he can use for medical costs.medical allotment that he can use for medical costs.

Outsourcing health care plan administration to outside Outsourcing health care plan administration to outside companies for a fee is another option.companies for a fee is another option.

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Long-Term Care InsuranceLong-Term Care Insurance

Long-term care insurance, care to support things like Long-term care insurance, care to support things like nursing assistance to former employees in their old age, nursing assistance to former employees in their old age, is a key employee benefit.is a key employee benefit.

The Health Insurance Portability and Accountability Act The Health Insurance Portability and Accountability Act lets employees deduct the cost of long-term care lets employees deduct the cost of long-term care insurance premiums from their annual income taxes.insurance premiums from their annual income taxes.

Employers can provide insurance benefits for several Employers can provide insurance benefits for several types of long-term care, such as adult day care, assisted types of long-term care, such as adult day care, assisted living, and custodial care.living, and custodial care.

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Life InsuranceLife Insurance

In addition to hospitalization and medical benefits, most In addition to hospitalization and medical benefits, most employers also provide group life insurance plans.employers also provide group life insurance plans.

Group plans usually accept all employees, including new Group plans usually accept all employees, including new ones, regardless of health and physical condition.ones, regardless of health and physical condition.

In many cases, the employer pays 100% of the base In many cases, the employer pays 100% of the base premium.premium.

The employee then pays for any additional coverage.The employee then pays for any additional coverage.

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