Simply defined, an Hour Bank is an over-charge of monthly benefits premiums. By creating a surplus reserve of premium payments, the employee can use their Hour Bank to cover the cost of benefits when they are not working.
By calculating fringe contributions in this manner, as opposed to a straight monthly premium, employees can easily see the status of their benefits contribution funding based upon the number of hours per month (i.e. 130, 140 or 150) they have worked.
By limiting payments for medical benefits to periods when an employee is working, Hour Banks can reduce employee benefit costs.