What are the different sets of benefit programs that are common in U.S. companies? Please list and explain the purpose of each set of benefit programs. Be sure to give examples of each.

Question

What will be an ideal response?

Answer 1

• The first set of benefits programs common in U.S. companies include pension plans (both defined benefit and defined contribution), individual savings plans (such as Keoghs, SEPs, and IRAs), and Social Security. While few Americans think of Social Security as a benefit, the organization must fund contributions to Social Security just as an employee does. The goal of all these benefit programs is to ensure that the employee will have continued income after retirement.
• The second set of benefit programs includes workers’ compensation, unemployment insurance, long- and short-term disability insurance, and life insurance. The goal of these programs is to ensure that employees who cannot work (through no fault of their own) have some income until they can work again and to provide income protection to employees’ families.
• The third set of benefits programs includes medical and other health benefits, such as hospitalization and medical care insurance, surgical and major medical care insurance, long-term care, dental, vision and hearing care insurance, and prescription drug coverage insurance. These benefits are designed to make sure employees and their families are not bankrupted by illness or accident and can obtain preventative and curative care.
• The fourth area of benefits is paid time off and includes vacation, holidays, personal days, special-purpose days (such as jury duty, bereavement, and military service) and family leave. The goal of paid time off is to recognize that employees need to recharge their batteries and spend time with their families for celebration or other significant life events.