Employee Benefits Required by Law

Unemployment
Insurance

Benefit
s
Social Security
Insurance

Workers
compensation
insurance

Social Security Insurance

Social Security Act was designed to protect workers against the loss of earnings
resulting from old age and unemployment
The Act was later amended to include disability or in the case of dependents, the
death of the worker supporting them.
Together the programs have become referred as Old Age, Survivors and Disability
Insurance (OASDI)
The Social Security program is supported by means of tax levied against an
employees earning that must be matched by the employer in each pay period.
The tax revenues are used to pay 3 major types of benefits:
i.

Retirement benefits

ii. Disability benefits

iii. Survivors benefits

Retirement Benefit

To qualify for retirement benefits, a person must have reached retirement age and be
fully insured
A fully insured person has earned forty credits a maximum of four credits a year for
ten years, based on annual earnings, a figure adjusted annually.
Under Social Security guidelines, an individuals full retirement age depends on the
year of his or her birth. Workers born before1938 can collect full benefits at age sixtyfive. Because of longer life expectancies, for those born after that date, the age to
collect full benefits has been gradually raised to age sixty- seven.

Disability Benefits Under Social

Security

Social security pays benefits to people who cannot work because they have medical
condition that is expected to last at least one year or result in death.
In addition to disability payments to the worker, certain members of an employees
family such as spouses over sixty-two and dependent children, may qualify for benefits
based on the persons work history

Survivors Benefit

Survivors Benefit represent a form of life insurance paid to members of a deceased

persons family who meet the eligibility requirements.
Survivors benefits can be paid only if the deceased worker have credit for a certain
amount of time spent in the work covered by Social Security.
The amount of benefits survivors receive is based on the workers lifetime earnings
doing work covered by Social Security

Medicare

Retired people age sixty-five or older are eligible for Medicare, which include both
medical and hospital insurance and prescription drug coverage.
The program helps with the cost of health care, but it does not cover all medical
expense or the cost of most long-term care
Medicare also financed in part by monthly medical premiums deducted from Social
Security recipients checks.

Unemployment Insurance
It protect workers who lose their jobs through no fault of their own.
Employers entirely foot the bill for this benefit via payroll tax, which can vary widely by
the state. The rate firms pay also depend upon their layoff records, or what is referred
to as their experience ratings
Employees who are laid off are generally eligible for up to twenty-six weeks of
unemployment insurance benefits during their unemployment.
Workers eligible for unemployment benefits must submit an application for an
unemployment compensation with their state employment agencies, register for
available work and be willing to accept any suitable employment that may be offered
to them.

Workers compensation Insurance

Workers compensation Insurance is a system whereby employers purchase private or
state- funded insurance to cover employees injured at work.
Workers compensation insurance covers workers injured on the job, whether injured
on the workplace premises, elsewhere or in an auto accident while on business.
Worker that collect compensation cannot sue their employers for their injuries unless
gross negligence by the employer led to the injury or the employer lacked the level of
insurance required by law.
Workers compensation Insurance also covers certain work- related illness.
The rate of employer pays depend upon its experience rating, which is based on
various factors including companys frequency and severity of employee injuries.

COBRA Insurance

Consolidated Omnibus Budget Reconciliation Act (COBRA) mandates that employers

make health care coverage at the same rate the employer would pay available to
employees, their spouses and their dependents on termination of employment, death
or divorce.
Thus former employees and their families benefit by paying a lower premium for
health coverage than is available to individual policyholders.
While the former employee pays the premium, employers have to establish procedures
to collect premiums and to keep track of former employees and their dependents.

Benefits provided by the Patient

Protection and Affordable Care
Act(PPACA)
In 2010, the Patient Protection and Affordable Care Act(PPACA) become law. Insurance
policy issued before the law are exempt from many of the provisions.
The key provisions all employers need to be concerned about are the following:

Beginning in 2014, firm that employ fifty or more people who work thirty or more hour
per week but do not offer them health insurance will have to pay penalty to the
government. Also beginning 2014, firms with 200 full-time employees will be required to
automatically enrol new full-time employees in their health care plans.

Employers must offer coverage for their employees children until they turn twenty-six.

No copays or deductibles can be charged to employees and their dependents for certain
essential health care services, which are generally preventative care related.

Lifetime dollar limits on key health care benefits are not allowed.

Employees cannot lose their insurance coverage solely because of an honest mistake
they or their employers made on their insurance applications

Benefits Provided Under The Family

And Medical Leave Act (FMLA)
The FMLA applies to employers having fifty or more employees during twenty or more
calendar workweeks in the current or preceding year.
A covered employer must grant an eligible employee up to a total twelve workweeks of
unpaid leave in a twelve- month period for one or more of the following reasons:
i.

Birth of care for a new born child

ii. Adoption or foster care placement of a chid

iii. Care for an immediate family member(spouse, child or parent) with serious medical
condition
iv. Serious health condition of the employee
. Under the FMLA, employees are eligible to take leave if they have worked for their
employers for at least twelve months, have at least 1250 hours of service and work in
organizations that have fifty or more employees within seventy-five-mile radius