COBRA
The Consolidated Omnibus Budget Reconciliation Act of 1985 requires that employers with more than 20 employees must offer continuation of health care coverage for 18 to 36 months after an employee quits, dies, or is terminated.

defined contribution pension plan
A pension plan that usually specifies the employer's contribution but cannot predetermine the employee's actual pension benefit.

defined benefit pension plan
A pension plan that specifies the benefit workers will get at retirement.

ERISA
Employment Retirement Income Security Act of 1974; covers practically all employee benefit plans of private employees, including multiemployer plans.

flexible (cafeteria) benefits plan
A benefits plan that allows employees to choose between two or more types of benefits.

flexible spending account
An employee sets aside or saves money to pay for items such as health insurance copays, child care, or prescription medication.

401(k)
The section of the Internal Revenue Code that allows employees to save on a tax-deferred basis by entering into salary deferral agreements with an employer.

HMO
Health maintenance organization; a medical organization consisting of medical and health specialists; it stresses preventive medicine.

indirect financial compensation
All financial rewards (benefits and services) that are not included in direct financial compensation.

IRA
An individual retirement account.

mandated benefits programs
Three types of benefits that an employer must provide employees because of state and federal regulations: unemployment insurance, social security, and workers' compensation.

PPO
A managed health care plan based on agreements between doctors, hospitals, and other related medical service facilities with an employer or insurance company; it provides services for a fixed fee.

reimbursement account
An account into which employees can place tax-deferred funds that can be used to pay for expenses not covered by the regular benefits package.

social security
The federally mandated pension fund designed to provide income to retired people to supplement savings, private pensions, and part-time work.

unemployment insurance
A state-mandated insurance benefit designed to provide a subsistence payment to employees between jobs.

workers' compensation
Disability and death benefits mandated and administered by the states.