HR and Benefits

In order to keep costs down, yet remain competitive, HR Professionals may find themselves in scenarios where they need to present benefits plans for consideration. The following article provides more depth on benefits.

Key points to remember:
- typical cafeteria type plans tend to encourage plan participants to choose the benefits they are most likely to use, therefore countering the fundamental insurance principle of pooling for risk
- This behavior is assured to increase the cost to the employer, but it is difficult to predict by how much
The spending account allows the employer to control the flexible-benefits costs by capping the costs of the flexible plan

Key Terms
This week’s HR terminology includes:

Pooling for risk: the handling of an uncertain risk posed to or by a single person by combining it with the same risk affecting a large group, which can be calculated