Mandated Benefits are mandatory benefits that the government of the country (state or federal law) legally requires or mandates that the employees must receive from their employers as a matter of law. For more than 20years, state legislators have continuously enacted and debated mandated coverage for specific benefits, treatments or providers to be provided by the employee to his/her employee. It is still a debatable matter that whether these mandates provide adequate security to the employees in terms of healthcare.
Mandated benefits might make health insurances more comprehensive but it also makes them more and more expensive. Therefore, these mandated benefits might use preventive services such as screening of the employee to detect any problem which might get severe in the future and costly to treat. This is done for the purpose of cost cutting.
Types of benefits provided:
• Social security: It refers to the disability and retirement benefits. The employees bear half of the cost of such benefits through payroll taxes.
• Workers’ compensation: It refers to the benefits that the workers receive when injured on the job. Employers have to pay the entire cost of the insurance amount.
• Unemployment insurance: It includes providing help to the unemployed to help them in making their ends meet till the time new employment is found. The employers bears the whole cost of it through payroll tax.
• Family and medical leave: It has to be provided by every employer, employing over 50 employees, to provide these leaves to every employee.
• COBRA: It is a law that mandates health coverage to be made available to all the employees upon their termination. It should cover the employee for at least 18-36months.
An exemption from the mandated benefits is provided to all the “self-insured” companies, under the federal Employee Retirement Income Security Act law. A self-insured company is a company which doesn’t purchase health insurance coverage, but instead the company pays for the cost incurred on health by the employees, using a health plan to look upon the benefits.