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401(k)
The 401(k) plan is a type of employer-sponsored defined contribution retirement plan under section 401(k) of the Internal Revenue Code (26 U.S.C. § 401(k)) in the United States, and some other countries.

403(b)
A 403(b) plan is a tax-advantaged retirement savings plan available for public education organizations, some non-profit employers (only US Tax Code 501(c)(3) organizations), and self-employed ministers in the United States.

940 - Federal Unemployment Tax Act (FUTA) Return
940 is an annual tax return that is required to be filed by all employers. FUTA is one of the payroll tax items that are paid by the employer.

941 - Employer's Quarterly Federal Tax Return
941 includes your employees' withheld Federal income tax, social security tax, and Medicare tax, and your share of social security and Medicare tax. Is based on the EIN [Employer I.D Number].

944 - Employer's Annual Federal Tax Return
944 includes your employees' withheld Federal income tax, social security tax, and Medicare tax, and your share of social security and Medicare tax.

A

Americans with Disabilities Act [ADA]
ADA prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities. The ADA also establishes requirements for telecommunications relay services.

C

Cafeteria Plan
See Section 125.

California Family Rights Act [CFRA]

Consolidated Omnibus Budget Reconciliation Act [COBRA]
COBRA continuation health coverage amends the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code and the Public Health Service Act to provide continuation of group health coverage that otherwise might be terminated.

Co-pay
A Co-pay is the flat dollar amount you pay for services (office visits, prescriptions, etc). You are not responsible for any additional charges for services covered at a co-pay level.

D

Dependent Care Accounts
See Section 129.

Division of Workers’ Compensation [DWC]
California Division of Workers' Compensation (DWC) monitors the administration of workers' compensation claims, and provides administrative and judicial services to assist in resolving disputes that arise in connection with claims for workers' compensation benefits. DWC's mission is to minimize the adverse impact of work-related injuries on California employees and employers.

Disability Evaluation Unit [DEU]
DEU determines permanent disability ratings by evaluating medical descriptions of physical and mental impairment. The determinations are used by workers' compensation administrative law judges, injured workers and insurance claims administrators to determine permanent disability benefits.

Dental Maintenance Organization [DMO]
A DMO is similar to an HMO health plan. You select a dentist from the panel of pre-approved providers, and this dentist coordinates all care for yourself and your family under the plan.

E

Employee Assistance Program [EAP]
EAP is a confidential, short-term counseling service for employees and their dependents to help them deal with issues such as parenting, depression, stress, addiction, elder care, and family relations.

Employee Polygraph Protection Act [EPPA]
EPPA generally prevents employers from using lie detector tests, either for pre-employment screening or during the course of employment, with certain exemptions.

Employee Retirement Income Security Act [ERISA]
ERISA is an American federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans.

F

Fair Employment and Housing Act [FEHA]

Federal Insurance Contributions Act [FICA]
FICA is a United States payroll (or employment) tax imposed by the federal government on both employees and employers to fund the following federal programs that provide benefits for retirees, the disabled, and children of deceased workers.

Federal Income Taxes [FIT]
(FIT) Federal Income Tax: Employee paid. Employee Personal Income Tax – Rate based on Gross Amount, Pay Frequency, Marital Status and Dependent Allowances indicated on the employee W-4 form.

Family Medical Leave Act [FMLA]

Flexible Spending ACCOUNTS [FSA]
FSA allows employees to pay for certain eligible health expenses and/or the care of their dependents on a tax-free basis. Contributions are payroll deducted before federal, state and social security income, therefore reducing the amount of income subject to taxation by the IRS.

Federal unemployment Tax Act [FUTA] Employer only tax.  For Federal Unemployment support.

H

Health Maintenance organization [HMO]
HMO is a comprehensive, pre-paid medical plan that offers physician services as well as hospitalization coverage. The carrier contracts with physicians, hospitals, pharmacies, and other health care professionals to form a closed network, and participants are required to access care through this network.

I

Independent Practice Associations [IPA]
IPA’s are contractual alliances between groups of health care providers. The participating physicians maintain their own practices, but process referrals and obtain payment for HMO services through the IPA group.

L

Loss Run Report
Loss Run Report used by insurance carriers to help determine an employer’s experience modification, displaying the following: Historical Claims, Reserve Dollars - higher the reserve dollars the higher the premium, Actual Dollars Paid, and Open Claims.

M

Medicare
Medicare provides medical insurance benefits. An equal amount is paid by the employee and the employer.

Medical Provider Network [MPN]
MPN is an entity or group of health care providers set up by an insurer or self-insured employer and approved by DWC's administrative director to treat workers injured on the job.

N

National Council on Compensation Insurance [NCCI]
NCCI is a not-for-profit rating, statistical and data management services organization. They are funded by a variety of workers' compensation insurance organizations and companies to act as a central source of workers compensation data. Part of their responsibility is the calculation of experience modification data. They receive claim and audit information from your insurance company and calculate your experience mod.

P

Primary Care Physician [PCP]
PCP is the gatekeeper through which HMO services are obtained. Usually a General Practitioner, Internist or Pediatrician, this doctor is selected by the participant at the time of enrollment, and he or she coordinates all care received under the plan. The PCP is responsible for issuing referrals for specialist care, as well as authorizing hospitalization and emergency care.

Permanent Disability [PD]
Most workers fully recover from job injuries but some continue to have medical problems. Permanent disability is any lasting disability that results in a reduced earning capacity after maximum medical improvement is reached.

Preferred Dental Organization [PDO]
A PDO is similar to a PPO health plan. You are free to use the services of any qualified dentist.

Preferred Provider Organization [PPO]
PPO is a health plan based upon a contractual arrangement between the insurance carrier and individual providers of care (physicians, hospitals, pharmacies, etc.), which uses lower out of pocket costs as an incentive to encourage participants to utilize their services.

S

Section 125 – Cafeteria Plan
Section 125 of the Internal Revenue Code, enacted by Congress in 1978, allows companies to give their employees the opportunity to pay for benefits on a pretax basis. Pretax benefits lower payroll-related taxes for both the employer and employees. In short, Section 125 of Internal Revenue Code offers employers the ability to offer multiple benefits options with pretax dollars.

Section 127 – Educational Assistance Plan
Gross income of an employee does not include amounts paid or expenses incurred by the employer for educational assistance to the employee if the assistance is furnished pursuant to a program which is described in Subsection (b).

Section 129 – Dependent Care Accounts
Section 129 of the Internal Revenue Code applies to all employees who are eligible for staff benefits and can choose to enroll in Health Care and/or Dependent Care Accounts.   This program allows employees to contribute pre-tax dollars to a special account for which they will be reimbursed for specific Health Care and Dependent Care Expenses.

State Disability Insurance [SDI]
California State Disability Insurance (SDI) is a partial wage-replacement insurance plan for California workers.

State Income Taxes [SIT]
(SIT) State Income Tax: Employee paid. Employee Personal Income Tax – Rate based on same factors as (FIT)

State Unemployment Insurance [SUI]
SUI is a state Unemplyment Insurance program is part of a national program that provides temporary payments to individuals who are unemployed through no fault of their own, paid by insurance carriers.

U

Uninsured Employer's Benefit Trust Fund [UEF]
UEF is a special unit within the Division of Workers' Compensation that may pay benefits to injured workers who get hurt or ill while working for an illegally uninsured employer. The UEF pursues reimbursement of expenditures from the responsible employer through all available avenues, including filing liens against their property.

T

Tax code section 457
Tax code 457 provides rules to govern all nonqualified deferred compensation plans of governmental employees and non-church controlled tax-exempt organizations.

Temporary Disability [TD] Benefits
TD benefits are payments you get if you lose wages because your injury prevents you from doing your usual job while recovering.

Temporary Total Disability [TTD] Benefits
If you cannot work at all while recovering, you receive temporary total disability (TTD) benefits.

Temporary Partial Disability [TPD] Benefits
If you can do some work while recovering, you receive temporary partial disability benefit (TPD) payments.

U

Unemployment Insurance [UI]
UI is a nationwide program created to provide partial wage replacement to unemployed workers while they conduct an active search for new work, administered by the U.S. Department of Labor under the Social Security Act.

Utilization review [UR]
UR is the program claims administrators use to make sure the treatment you receive is medically necessary.

V

Veterinary Pet Insurance [VPI]
VPI will help ensure that your family pets will always have the care they deserve.

W

W-2 [Wage and Tax Statement]
W-2 is used in the United States income tax system as an information return to report wages paid to employees and the taxes withheld from them.

W-2C
W-2 C is used to make corrections on W2s already issued. The form is used to make any and all corrections on previously issued W2s from current or past years.

W-3
W-3, Transmittal of Wage and Tax Statements, is a summary form that basically serves as a cover page for Copy A, Form W-2. In short, W-3 is a Employer tax return; compilation of all W2's for a firm's staff; submitted to the federal government along with all W2's--summation of each must match.

W-4
W-4 is a tax form used by the United States Internal Revenue Service. The form is used by employers to determine the correct amount of tax withholding to deduct from employees' wages.

Workers Compensation
Workers Compensation (insurance) provides insurance to cover medical care and compensation for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence.

X

X-Mod
One of the most confusing components of an employer's workers' compensation policy is the experience modification factor. Employers watch it increase and decrease from year to year without much understanding of how it works and what they can do to manage the experience mod to the absolute minimum. Agents and brokers need to know more about it themselves to better advise them.