chapter  11
15 Pages

The costs of employee benefits

WithJOSEPH J. MARTOCCHIO

This chapter looks at the high costs of employee benefits and what firms are doing to control those costs. It begins with a brief introduction to the different types of employee benefits. Employee benefits refer to employee compensation other than hourly wage or salary. To organize the vast benefits information efficiently for the purposes of making an effective brief introduction, it is useful to think about two dimensions: the source of the benefit and the role the benefit serves recipients. The chapter provides a brief overview of employee benefits practices in North America and some timely information about benefits costs to employers. Several forces are in play that will likely push costs even higher. The chapter reviews methods which company management may consider as part of their efforts to control employee benefits costs. Capped fee schedules set maximum dollar amounts for each service. Similar to percentage discount systems making it difficult to anticipate total costs.