Benefit Options

Virtually every employee benefit is somehow affected by statutory or common law. Workers’ compensation, a no-fault insurance program, costs employers $83.2 billion annually, covering medical expenses, disability benefits, survivor benefits, and rehabilitation. Costs of workers' compensation have fluctuated over time, with recent declines attributed to employer safety programs reducing fatal accidents. Social Security, initially covering only 60% of workers in 1937, now covers 96% and provides retirement, disability, and survivor benefits funded through payroll contributions. A challenge for Social Security is the increasing number of beneficiaries without a proportional rise in contributors, leading to higher tax rates and earnings bases. Unemployment insurance (UI), established under the Social Security Act, is primarily funded by employer taxes, with benefits determined by state laws and past earnings. Initially capped at 26 weeks, UI benefits have been extended in times of economic hardship, such as during the 2008 recession, but have since returned to shorter durations. The Family and Medical Leave Act (FMLA) grants eligible employees up to 12 weeks of unpaid leave for family or medical reasons, with growing state-level support for paid leave options. COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees to temporarily continue their employer-sponsored health insurance after job loss, though coverage is expensive and limited to 18–36 months. HIPAA (Health Insurance Portability and Accountability Act) protects employees by restricting exclusions for preexisting conditions and enforcing strict privacy regulations for health information.