Employee wellness programs are one way to lower the cost of health insurance

Employee wellness programs are one way to lower the

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Employee wellness programs are one way to lower the cost of health insurance costs incurred by employees. Employers may try to do this by offering an employee wellness program, a set of communications, activities, and facilities designed to change health-related behaviours in ways that reduce health risks discussed in chapter 2.-Some employers use benefits to their advantage to recruit top talent by tailoring creative benefits packages.-Sick leave programs pay employees for days not worked because of illness. The amount of sick leave is often based on length of service, so that it accumulates over time- for example one sick day added for each month worked. Employers decide how many sick days to grant and whether to let them continue accumulating year after year.-Unpaid leave is also considered an employee benefit because the employee usually retains seniority and benefits during the leave. (pg. 227)-Employee assistance program (EAP) – pg. 227
-Life insurance (pg. 227)-Short-term disability insurance– insurance that pays a percentage of a disabled employee’s salary as benefits to the employee for six months or less-Long-term disability insurance– Insurance that pays a percentage of a disabled employee’s salary after an initial period and potentially for the rest of the employee’s life.-Phased retirement– a gradual transition into full retirement by reducing hours or job responsibility. Employers are facing an increasing demand for phased retirement programs from employees who are healthier, living longer, and have personal or financial reasons to continue working in some capacity. Employers also benefit from retaining older workers with valued skills and experience who wish to retire gradually.-Defined benefit plan– a pension plan that guarantees a specified level of retirement income. Usually the amount of this defined benefit is calculated for each employee based on the employee’s years of service, age, and earning levels (e.g., a percentage of the average of the employee’s five highest earnings years). These calculations typically result in pension payments that may provide 70% of pre-retirement income for a long-service employee. Using years of service as part of the basis for calculating benefits gives employees an incentive to stay with the organization as long as they can, so it can help to reduce voluntary turnover.-Defined contribution plan- a retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into account, rather than the amount to be paid out upon retirement. The amount the retiree receives will depend on the account’s performance. These plans free employers from the risks that investments will not perform as well as expected. They put the responsibility for wise investing squarely on the shoulders of each employee. Defined contribution plans are easier to implement, so it comes as no surprise as to why defined contribution plans are preferred for employers in

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