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R
obert S. Mori, CPA, President 7429 East Heather Way, Everett, WA 98203-5424Tel. (425) 353-9763 Toll-free (877) 455-7591 Greater Seattle (206) 965-9609
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Washington State Benefits
Here we will talk about a needs approach to Washington State benefits and specifically for an organization's benefit plan. This includes the implementation of a Washington State employer group health-medical insurance plan. This approach determines how to improve an existing employee benefit program and what changes would need to be made to make the benefit program more efficient and effective in terms of the overall needs of the employer group as a whole. Click Here for a Free Quote!
This approach organizes and prioritizes the risks and needs of active employees, their dependents, and also the financial capabilities of the employer into logical categories of risks of loss and employee needs. These risks and needs may include health-medical expenses, potential losses resulting from death, potential losses caused by short-term and long-term disabilities, retirement income needs, capital accumulation needs, needs arising out of short-term and long-term unemployment, long-term care needs and other employee needs.
This needs approach essentially is the application of a systematic method of analysis to an employer's total employee benefits program. It analyzes the employer's program as a coordinated whole in terms of its ability to meet employees' and their dependents' needs and to manage financial loss risks within the employer's overall compensation goals and cost parameters. This approach can be useful in overall employee benefit plans design, in evaluating proposals for new or revised benefits, for evaluation of cost-saving proposals, and in effective communication of an employer's total benefits program to its employees. It can be seen that this needs approach, which is essentially a planning approach, fits logically with in the total compensation for each employee.
This needs approach is essential in planning , designing , and administering employee benefits for several reasons.
First, in most cases, employee benefits are a very significant element of the total compensation of employees. They have become an important part of the work rewards provided by employers to their employees. Therefore, it is important to employees, and hence their employers, that this increasingly important element of compensation be planned and organized to be as effective as possible in meeting employee needs.
Second, employee benefits are a large percentage of total labor costs for employers. Depending on the industry, the particular employer and how employee benefits are defined, benefits may range from less than 18 percent to over 60 percent of an employer's payroll. Now a days, a Washington employer who has a group health-medical insurance plan may be spending as much as an average mortgage payment was just a decade ago. Therefore effective planning and hence avoidance of waste in providing benefits can be an important cost-control measure for employers.
Third, in the past, employee benefits often were adopted by employers on a piecemeal basis without being coordinated with existing benefit programs. Thus, some benefit plans just went everywhere and there were overlaps and gaps in the plans. I've seen Washington employer groups have not only group health - medical insurance plan along with the employees having volunteer individual medical coverage for such catastrophic items as cancer and heart attacks while at the same time no real disability income policy was in effect at all. Coordination and taking in the big picture is the key. Benefits may need to be adjusted to have a well integrated plan.
Fourth, because new benefits have become available, tax laws have changed, the regulatory environment has become more +restrictive, and other new ideas in employee benefit planning have come about so rapidly in recent years, it is important to have a systematic approach to planning benefits to keep them competitive, and in compliance with regulatory requirements.
Finally, a component of a Washington benefits package or in other states , such as a pension plan, often provides benefits relating to several separate risks such as retirement, early death and long-term care. Therefore, an employer's benefit plan needs to be analyzed according to the needs approach so its various benefit programs can be integrated properly with each other.