Assignment:
Knowledge Networking, Inc., provides a growing business of high-tech and electronics equipment and software. It is a specialty retail and online business that has tripled its revenues in the past seven years. The company started 15 years ago and includes 50 outlets on both the East and West coasts. In 2018, the company went public and now, despite the major financial crisis, it is doing very well with innovation and creative offerings. The company has 5,600 full-time employees and 1,000 part-time employees. Knowledge Networking, Inc., provides all the social insurance programs and offers its employees a cafeteria plan with many choices. Employees have generous choices of health, life insurance, and disability coverages; dental and vision care; premium conversion plan; and flexible spending accounts as part of the cafeteria plan. Each employee receives $5,500 a year from the employer to pay for the benefits.
1. Describe in detail your understanding of the structure of the cafeteria plan of Knowledge Networking, Inc. (design this cafeteria plan). What are the advantages and disadvantages of this cafeteria plan?
2. Knowledge Networking, Inc., follows the federal laws: Family Medical Leave Act, Americans with Disabilities Act, Pregnancy Discrimination Act, and Age Discrimination in Employment Act. If you were the employee benefits manager, how would you explain the effect of each of these acts on the employee benefits of the employees?
3. How would the group insurance rates be computed (what factors play into the computation) for such a company?
4. Why might Knowledge Networking, Inc., prefer to self-insure their workers' compensation and health insurance rather than buy insurance?