Chapter 09 – Accommodation and Enhancement Benefits
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Chapter 09 Accommodation and Enhancement Benefits
I. Learning Objectives (use PP 9.2)
1. Five categories of accommodation and enhancement benefits and their objectives
2. Specific benefits in each category
4. Tax advantages for employers and employees
5. Legal issues
2. Family assistance programs
4. Support programs for daily living
B. Rationale for AEBs (use PP 9.4)
1. The decision to provide accommodation and enhancement benefits is based
on four considerations
a. The cost of absenteeism and tardiness is usually much higher than
offering accommodation and enhancement benefits that will increase
the timely attendance of employees at work
C. Origins of Accommodation and Enhancement Benefits (use PP 9.5)
2. In the era of industrialization, serious concerns emerged
3. In the 1940s, companies adopted a rehabilitative rather than punitive stance
toward alcohol consumption. Three factors prompted this approach.
a. During WWII war, private businesses refocused their work on efforts
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4. Alcohol intervention programs laid the foundation of contemporary
employee assistance programs
III. The Mental and Physical Well-Being of Employees and Family Members
A. Overview
1. Two broad programs to promote the mental and physical well-being of
employees and family members:
B. Employee Assistance Programs (use PP 9.6 & 9.7)
1. Employee assistance programs (EAPs) help employees cope with personal
problems that may impair their personal lives or job performance
2. Examples of these problems include:
a. Alcohol or drug abuse
3. EAPs also assist employers in helping troubled employees identify and solve
4. Companies offer EAPs because, at any given time, an estimated 10 to 15
5. In 2011,
a. 46% of workers in private industry were eligible for an EAP
6. EAP costs are substantial, but possible benefits are expected to outweigh the
7. One analysis of EAP effectiveness demonstrated that 78 percent of EAP
users found resolutions to their problems
9. This act mandates that companies holding federal contracts (worth at least
$25,000) or grants (in any amount) promote a drug-free workplace
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C. EAP Services (use PP 9.8 & 9.9)
2. If a company is unionized, negotiations through collective bargaining
determine some of the EAP services
4. Typical EAP services include
a. Orientation meetings and educational materials to familiarize
managers and employees with EAO services and procedures for
supervisory referrals or employee self-referrals
5. The inclusion of outplacement assistance programs in EAPs represents a
relatively recent phenomenon because of ever-changing business conditions
such as:
a. Elimination of specific positions, often the result of changes in
6. Many companies use outplacement assistance programs to provide technical
and emotional support to employees who are being laid off or terminated
7. Outplacement assistance provides such services as personal counseling,
Chapter 09 – Accommodation and Enhancement Benefits
D. EAP Delivery Options
1. EAP Delivery Options
a. Referral EAPs
b. Full-service EAPs
2. Full-service EAPs (use PP 9.10)
a. Offered through
i. In-house EPAs
ii. Third-party providers, or
iii. Consortium EAPs
E. Procedures for Employee Participation in EAPs (use PP 9.11)
1. An employee participates in EAPs based on self-initiative or a referral by
someone else
2. Oftentimes, employees either do not recognize how problems adversely
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5. Sound policy includes a promise of confidentiality, except when
6. Every state includes laws that enforce the release of confidential
information to the appropriate authorities without written consent
8. EAPS are obligated to release confidential information about evidence or
H. Evaluating Employee Assistance Programs (use PP 9.13)
1. Employers seek information to evaluate the effectiveness of these
programs to answer several questions:
a. Are troubled employees aware of their employer’s EAP?
b. Do coworkers and supervisors understand the importance of and
2. Evaluating EAPs requires a variety of complex tasks—for example,
survey development and implementation
4. The Employee Assistance Professionals Association (EAPA) has
developed an evaluation system for EAPs (http://www.eapassn.org)
I. Employer Liability (use PP 9.14)
1. Employers may be legally responsible for inappropriate actions of
2. Possible trouble spots for employers include:
a. Misdiagnosis of a condition that refers an employee to the wrong
facility
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e. Defaming an employee’s character with libelous or slanderous
statements due to participation in an EAP.
J. Relationship with Employee Benefits Laws (use PP 9.15)
1. The Employee Retirement Income Security Act of 1974 (ERISA) and the
2. The essence of ERISA is to provide protection of employee benefits
rights in pension plans and welfare plans
3. COBRA amended ERISA by providing employees and beneficiaries the
4. COBRA usually applies to EAPs under two circumstances:
a. The EAP qualifies as a welfare benefit plan under ERISA
b. The EAP qualifies as a health care plan by providing counseling for a
medical condition
IV. Wellness Programs
A. Overview (use PP 9.16)
1. In the 1980s employers began sponsoring wellness programs to promote and
maintain the physical and psychological health of employees
2. They may emphasize weight loss only, or they may emphasize a range of
activities, including:
4. Although wellness programs are relatively new, some evidence already
5. For every $1 invested in preventive health care programs, companies can
expect to save as much as $6 in medical insurance costs
B. Back Care (use PP 9.17)
1. Employers sponsor back care programs to reduce back injuries through
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2. In 2010, there were nearly 1 million occupational injuries and illnesses
4. Problems with the trunk (back and shoulders) and upper extremities were
stated to account for most (74 percent) of time lost
C. Smoking Cessation Programs (use PP 9.18)
1. Employers may invest in smoking cessation programs ranging from simply
2. Employers may sponsor the participation of employees in a SmokEnders®
education program
4. Many companies endorse antismoking events, such as the American Cancer
5. Employer-sponsored smoking cessation programs usually operate on a
reimbursement basis
7. Upon successful completion of the program, employers reimburse employees
for part or all of the cost
9. Employers deduct their contributions to smoking cessation programs as a
normal business expense
11. Employees may pay for nonprescription drugs to assist with smoking
cessation with money from a flexible spending account but an individual who
does not have an FSA may not deduct the cost of nonprescription drugs for
smoking cessation from their income taxes
D. Stress Management Programs (use PP 9.19)
1. Stress management programs can help employees cope with many factors
inside and outside of the work environment that contribute to stress:
2. Symptoms of stressful workplaces include low morale, chronic absenteeism,
low productivity, and high turnover rates
4. Stress reduction techniques can improve the quality of life inside and outside
the workplace
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E. Weight Control and Nutrition Programs (use PP 9.20)
1. Weight-control and nutrition programs educate employees about proper
nutrition and weight loss to promote sound health
2. Information from the medical community has clearly indicated that excess
4. Companies can contribute to employees’ weight control and proper nutrition
in different ways:
a. Some employers sponsor memberships in weight-loss programs such
5. Employers treat the costs of wellness programs as a normal business
expense; however, employees do not receive any tax benefits for costs (e.g.,
fees to participate in a weight-control program)
F. Health Risk Appraisals (use PP 9.21)
1. Employer-sponsored health risk appraisals inform employees of potential
2. Exhibit 9.4 lists common elements of health risk appraisals
4. Employers generally pay for health risk appraisals, permitting the deduction
of these costs as a business expense
6. When wellness programs and EAPs are integrated programs within a
7. The use of such appraisals can remind employees of the health risks
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V. Family Assistance Programs (use PP 9.22)
A. Overview
1. Family assistance programs help employees provide care to young children
and dependent elderly relatives
3. These programs range from making referrals to on-site child or elder care
4. Generally, the least expensive and least labor-intensive programs are referral
services
B. Elder Care
1. Programs provide physical, emotional, or financial assistance for aging
C. Child Care
2. Many employees now rely on elder care and child care programs due to the
3. Child care needs arise from the growing number of single parents and dual–
career households with children.
D. Day Care
1. Some companies subsidize child or elder day care in community-based centers
3. Child care programs typically offer supervision, preschool preparation, and
meals
4. Facilities must usually maintain state or local licenses. Other companies
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VI. Adoption Assistance Programs (use PP 9.23)
1. Adoption benefits include direct financial assistance or reimbursement for
2. There has been steady increase in the number of large employers willing to
3. Both employers and employee receive tax benefits through employer-
sponsored programs
VII. Educational Benefits for Employees
A. Overview (use PP 9.24)
2. Educational benefits assist employees by providing them with a college
3. Companies stand to benefit from sponsoring employee education
4. Many companies, however, do not benefit because they often fail to develop
5. Three specific types of educational benefits are:
a. Section 127 educational assistance programs
b. Tuition reimbursement
c. Scholarship programs
B. Educational Assistance Programs (use PP 9.25)
2. The Internal Revenue Service currently offers two definitions of educational
assistance, based on amendments to Section 127 of the Internal Revenue Code
4. The payments may be for either undergraduate- or graduate-level courses and
do not have to be for work-related courses
5. Educational assistance benefits do not include payments for the following
items:
a. Meals
Chapter 09 – Accommodation and Enhancement Benefits
7. Besides conforming to educational assistance program definitions, an
employer must meet three additional requirements:
9. Employees receive tax benefits on total eligible expenses
C. Tuition Reimbursement Programs
2. Oftentimes, tuition reimbursement programs and pay-for-knowledge programs
are treated the same way
4. The main goal of pay-for-knowledge programs is to train employees to meet
5. Companies establish set curricula that employees should take, and they
6. Pay increases are not directly associated with tuition reimbursement programs
8. Employees receive tax benefits for tuition reimbursement when these plans
meet the criteria for a working condition fringe benefit
9. Specifically, tuition reimbursement plans qualify as working condition fringe
benefits when either instruction or training must maintain or improve essential
D. Scholarship Programs
1. Employer-sponsored scholarship programs cover some or all of the tuition
3. Employer-sponsored scholarship programs are the least common educational
4. Employers treat the cost of scholarships as a normal business expense
5. Section 117 of the Internal Revenue Code describes qualified scholarship
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6. Qualified tuition reductions include the reduction in tuition granted by an
employer’s program
VIII. Support Programs for Daily Living (use PP 9.26)
A. Transportation Services
2. They may sponsor public transportation subsidies, vanpools, or employer-
3. Employers provide transit subsidies to employees working in metropolitan
4. Many employers must offer transportation services to comply with the Clean
Air Act of 1990
5. The Clean Air Act Amendments of 1990 require employers in smoggy
7. Under salary reduction arrangements, employers pay the provider directly.
8. Employers deduct the cost of transportation benefits, based on fair market
valuation, as a business expense
10. Employees may deduct a monthly maximum of $125 (for the 2012 tax year)
for employer-subsidized transit passes or vanpools
12. Amounts that exceed these limits are subject to federal income tax
withholding and taxation under FICA and FUTA
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B. Physical Fitness
2. Presumably, employees who take advantage of these benefits tend to be absent
less often, manage stress more effectively, and control their weight
4. Employers deduct the cost of these benefits as a normal business expense
5. Employees may exclude the value of facility usage from income (thus,
6. These include any gym or other athletic facility (e.g., swimming pool, tennis
8. The concept of employer control refers to either of the following:
a. The employer operates the facility
b. The employer has a contract with a facility, but the operation is still
under the employer’s control
Summary
This chapter reviewed the fundamental concepts of company-sponsored accommodation
and enhancement benefits. We started with a review of the objectives of accommodation
Discussion Questions
1. Describe the differences between health insurance benefits and employee assistance
programs (EAPs).
Main Points
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o Dental treatments
o Corrective prescriptions lenses
• Broad classes of health insurance programs
o Fee-for-service plans
• On the other hand, employee assistance programs (EAPs) help employees cope
with personal problems that may impair their personal lives or job performance.
Examples of these problems include:
o Alcohol or drug abuse
o Domestic violence
• EAPs also assist employers in helping troubled employees identify and solve
problems that may be interfering with their job or personal lives
• EAPs include a variety of services; the specific services contained in any EAP
2. Identify additional reasons why companies should offer accommodation and
enhancement benefits.
Main Points
• The decision to provide accommodation and enhancement benefits is based on
four considerations
o The cost of absenteeism and tardiness is usually much higher than offering
accommodation and enhancement benefits that will increase the timely
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3. Discuss one or more reasons why companies should not offer accommodation and
enhancement benefits.
Main Points
• Student answers will vary.
4. Some companies do not include educational benefits in their benefits plans. Discuss
reasons for this position.
Main points
• Student answers will vary.
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5. Companies always face budget constraints, preventing them from offering every
possible benefit. Identify one accommodation and enhancement benefit that you believe
is most important and another that you believe is least important.
Main points
Cases
Understanding Your Benefits
Reaching out for Help
1. Are you concerns with the confidentiality of the service valid?
2. Do you think it would help you to call the EAP? Why or why not?
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Student Responses
1. Are you concerns with the confidentiality of the service valid?
2. Do you think it would help you to call the EAP? Why or why not?
1. Would a wellness program benefit Premier Financial Services?
2. What components of a wellness program would be appropriate for this company?
3. If a wellness program is started, how can Shelly encourage employees to
participate in the program?
Chapter 09 – Accommodation and Enhancement Benefits
Student Responses
1. Would a wellness program benefit Premier Financial Services?
2. What components of a wellness program would be appropriate for this company?
3. If a wellness program is started, how can Shelly encourage employees to
participate in the program?