Question

1. Compare and contrast commercial insurance (fee-for-service) and self-funded insurance.
2. Briefly summarize the components of legally required benefits. How can HR managers minimize the costs that are associated with legally required benefits?

Answer 1

Self-insurance plans are excluded from many state insurance laws, including regulations requiring insurance policies to provide an incentive for employers to develop alternative benefits packages, receive some money and benefits from workplace wellness programs, receive some preventive care benefits and be shielded from lifetime benefits limits.

To businesses, self-insurance plans can be more cost-effective. Employers can reduce the average healthcare costs by cutting out the third party. The downside, however, is that self-insurance is far more risky than commercial plans for employers. If an employee gets seriously ill, self-insurance plan employers will have to pay the treatment cost, which could be in the millions. Because of the increased risk of self-insurance plans, they have historically only been used to cover these costs by large companies with the capital and stability; however, recent developments have changed the situation.

Social Security, also known as Old Age, Survivors, or Disability Insurance, provides benefits to retired workers, dependents, and people with disabilities and their families. Snapshot / statsnapshot/.
Social Security is funded by a payroll tax on employers ' income, with a portion of the worker's tax paid and a portion paid by employer Medicare is a program that provides for veterans and people with long-term disabilities for medical care. Medicare's justification is an amendment to the Social Security Act in 1965.
Medicare reimburses physicians, hospitals and medical centers to provide treatment to recipients of Medicare.Together with state unemployment services, the Federal Unemployment Tax Act (FUTA) also known as federal unemployment insurance provides benefits to employees who have lost their jobs. FUTA covers the national share of the costs in all states for administering unemployment insurance and job assistance services.

1. Unemployment Insurance

Workers who have lost their jobs without their own fault— for example, the business has been downsized, restructured or shut down — are eligible to apply for unemployment. Unemployment is a replacement for a percentage of the lost wages of laid-off workers when looking for work. Employees typically receive up to 26 weeks of half pay. If you have to pay these taxes for your company, you must register with the labor agency of your country.

2. Workers’ Compensation Insurance

Workers ' compensation provides monetary coverage for workers suffering from injury or illness at work or while performing work duties, resulting in their need for medical care and/or lack of work. Workers ' insurance for medical expenses and loss of pay reimburses workers. For most businesses, work comp coverage is a legal requirement, but since it is governed at the state level, the standards differ. Your policies must represent the workplacestate(s) and the nature of the work performed.

3. Disability Insurance

The Family and Medical Leave Act provides for a balance between work and family responsibilities for employees. For important family or medical reasons, FMLA allows employees to take unpaid, job-protected leave (up to 12 weeks) and group health benefits are maintained.

It is most commonly associated with maternity and paternity leave, but also extends to adoption, foster care and treatment of a family member with a severe health condition; additionally, the worker must be compensated for at least one year of retirement.