Benefit Plan Design Analysis Select Research Paper

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[. . .] The number also included people who were self-employed. It also benefited around fifty million individuals including people who were suffering from a disability or were old. The program also stretched to benefit the employees' dependents (Fronstin, 2008).

Access to Important Services

The employee benefit scheme of U.S. also aims to offer the employees (and their households in America) assurance of basic services, such as health care. A number of employees in America take part in programs related to health insurance that is provided for on their own by the employer organizations. However the coverage provided may vary from organization to organization with certain employers only offering health care coverage when acute care is required while some may also incorporate routine visits to the doctor.

A number of times, the dependents of the employees are also covered under the benefit plans. In the year 2007, over sixty percent of the population that was of sixty five years of age and below were protected under the health insurance plan that was employment based (Fronstin, 2008).

Certain organizations also provide health care benefits to employees who have retired from employment. In certain cases, the employees are only provided with health insurance when they have reached sixty five years of age and are retired. It is also the age when a person becomes covered under the Medicare program. Medicare is a benefit plan for the disabled and the elderly and is federally sponsored.

Over thirty five percent of the people who were of the age sixty five and above were covered under the health insurance plan that was employment-based in the year 2007. This was reported by the EBRI estimates in the Current Population Survey of 2008. The Medicare program, in the same year provided over ninety percent of the population of the elderly with health insurance. Nevertheless it was noticed that it still required a high number of expenses (Fronstin, 2008).

However, such programs that provide benefit to the employees are not restricted to providing only health insurance or income security. Other programs exist that offer a host of other benefits such as child care, legal help, educational assistance etc. Relocation expense compensation, product discounts and subsidized parking are all some other forms of employee benefits that can offer ease and a number of ways to cut costs for staff (Fronstin, 2008).

Part 4: Issue Analysis

It is imperative to take into account entirely the factors for taking the approach of formulating benefit plans that are flexible. In cases, when the type of the employer organization allows for limited flexibility then one possible course of action would be to cut back on costs and time expenditure by not resorting to an entirely flexible benefit scheme. In such a case, a rather restricted methodology of providing flexible plans can be pursued.

The said approach can also incorporate the provision of cash instead of allotting cards or conferring on the employees the option to purchase or sell off a leave. Instead, it might also take into account total reward or voluntary benefits statements. If an innovative plan comes up it should be examined within the setting of the currently applicable reward approach and ought to analyze the psychological along with the economic meaning of the future and current advantages to the employee. Usually, it takes about a period of twelve months to develop, apply and impart the flexible benefit plan to the employees (Fronstin, 2008).

Part 5: Issue Solutions

It is essential to quantify the possible usage of certain benefits when plans are being developed. This allows for the organizations to acquire the more appropriate amount of quotation available for the offering of each service. A challenge connected with the formulation of benefit plans that are flexible is the process of deciding and making choices in reality that alter the setting of the group in need of a certain service.

The plans are budgeted on the foundation of forecasted choices, such as when the taskforce make considerably various decisions, these are considered as adverse choices. In order for the plans to succeed, the comparative numbers of the plans ought to be decided in order to drive away any chance of adverse choices being made. Also, the arrangement should be made in such a way that the staff is not motivated to take up the less prudent alternatives which would prove to be a risk to their plan. Providing a fixed level of basic benefits assures a certain amount of protection or stability (Fronstin, 2008).

Organizations, before coming up with their benefit plans need to carry out a research of the profiles of their employees so that they can identify the type of benefits they would require and can take advantage from. By doing so, the employers can maximize the importance and meaning of the plan provided and can make the plan cost effective.

Part 6: Solution and its Implementation

Even though, a standard format for flexible plans does not exist, a number of basic advantages or services are common to most of the plans. Most of the employment benefit schemes outline the difference between the important benefits provided such as health care that are sponsored by the organization and benefits that are voluntary. These are then borne by the staff members. The benefits that are important to the plan are the ones that an individual expects from the best practice organization and if removed from the plan, might render the plan meaningless for the employee. Examples of core benefits include private medical insurance, personal accident insurance, life assurance, holidays and acute illness insurance etc. (Fronstin, 2008).

Part 7: Justification

An organization provides benefits to its taskforce for various factors. One of the most important reasons is that some benefits are to be provided as per law. Other reasons include Social Security which is a retirement program mandated by the federal authorities. It requires that equal contribution be made by both employers and employees, a percentage of 6.2% to be specific. For employees of Medicare, they are supposed to put in 1.45% of their earnings and their employer makes the same contribution. Law also requires that unemployment insurance be provided to the employees. As for worker's compensation, it provides coverage in instances when the employee is met with an injury while working and is rendered unable to work either permanently or temporarily. The organization has to provide the entire cost to the employee. Apart from the legal compliance, organizations are interested in motivating and retaining their employees and thus, feel the need to provide adequate services to them that are in par with the industry practices. Providing such plans has also proved to have a marked effect on the motivation of employees that has a linkage with the productivity of the employees (Fronstin, 2008).

Lastly, these plans can be used to identify between various employees. For instance, employees who are hired on contract may not be offered all the benefits of the plans that are normally provided to a regular employee of the organization. Thus, the amount of benefits provided reflects upon the level of responsibility the person holds in the organization, the post and seniority of the employee etc.

Part 8: Reflection

Benefits play an integral part in assisting employees in their time of need. It is one way the organization can show its arguably most important assets that it cares for them. Also, it helps in alleviating uncertainty and insecurity from the lives of the employees and their families which enhances their motivation and productivity as a result. A number of benefit plans exist that can be provided to employees according to their requirement while some of them are fixed and follow a certain pattern. For organizations operating today, it is imperative that ample attention is given to their employees and providing their taskforce with flexible benefit plan… [END OF PREVIEW]

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