Bertha A. Navarro
HRM 430 – Online
Professor, Don Wlodarski
April 29, 2013
A plan administrator for employee benefits has the task of assessing the needs of the employees of the organization. To do this, the administrator has the daunting task of identifying those needs in terms of internal and external factors, as well as comparing costs for the contemplated benefits so that they meet with the organization’s budget. Once all data is compiled it is then presented to upper management for approval. The next step is to communicate the benefit package to the employees. An carefully designed benefit plan is a strategic plan in attracting and retaining talent, surprisingly a benefit plan that includes heath care and a retirement plan are first on the list of today’s workforce (Hall, 2013). To develop an effective benefit plan requires a strategic planning and communication (Thompson, 2013).
Communication an Employee Benefit Plan
Over the years employee benefits played an important role in the lives of the American worker. However, the high cost of health insurance and prescriptions companies are finding it difficult keeping up with the constant rise of costs of these benefits and have opted to either stop offering top quality benefits and chose a plan with higher deductibles and or passing the majority of the cost to the employee (Hall, 2013). Employee benefits refers to compensation, not including wages (hourly or salaried), that include paid vacation, medical insurance coverage, dental insurance, profit-sharing plans, paid time off and tuition reimbursement. Organizing and communicating these benefits to employees efficiently requires the right form of communication.
Many feel that employees have the right to these benefits and that companies are obligated to offer and pay for the benefit plan. The truth is that while there are some benefits that are mandated by law, standard benefits such as health care, sick pay and vacation pay are not governed by law (Hall, 2003). Companies see that providing employees with a benefit plan is a privilege and not a right. An administrator with the task of putting together an employee benefit package must come up with a strategy that includes implementing the legal requirements, defining employee needs, and budgeting the cost to meet financial resources of the company.
First, strategic step is to identify the external and internal environment that will help to determine
Second is to identify the benefits required by law and those that the company plans to offer its current employees and new hires. I. Identifying types of benefits;
Benefits have two aspects and are identified by purpose - how the benefit serves the employee and the legal requirement of the benefit (McGraw Hill, 2013). Also, there are three roles that characterize a benefit program. The first of these characteristics include employee protection benefits. Some protection benefits are mandated by law such as; Social Security, Medicare, unemployment insurance, and workers’ compensation insurance and those designed to (Erickson, 2005). Social Security is a retirement program mandated by the federal government that requires matchng contributions at the rate of 6.2% from the employer and employee (Social Security, 2013). Another mandated benefit is the health care program known as Medicare. For this program employees are required to contribute 1.45% of their wages earned and the employer is required to match the amount (Steingold & Schroeder, 2009). Unlike the Social Security and Medicare program, the unemployment insurance benefit program, the rate is based on the wages earned by the employee and the state’s specific rate. The current Federal Unemployment Tax Amount or FUTA is 6.2%. In addition to the FUTA unemployment contribution, employers...