Chapter 13 - Benefits Options
According to the 1993 Family and Medical Leave Act, all eligible employees are entitled to _____ of unpaid leave for stated family or medical reasons. A: 24 weeks per year B: 18 weeks per year C: 12 weeks per year D: 6 weeks per year
C - 12 weeks per year
Employers pay insurance premiums to the _____ in order to protect employees from the potential risks of an organization going bankrupt or failing to meet its vested pension commitments. A: Pension Rights Center B: Securities Investor Protection Corporation C: Federal Deposit Insurance Corporation D: Pension Benefit Guaranty Corporation
D - Pension Benefit Guaranty Corporation
A(n) (blank)(blank)(blank) (ESOP) plan is a defined contribution plan in which a company makes a tax-deductible contribution of stock shares or cash to a trust.
Employee Stock Ownership
The extra amount of unemployment compensation paid by a company depends on its (blank) (blank)
Experience rating
What is a health savings account?
Funds in these accounts are contributed by employees with pre-tax dollars
The dental equivalent of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) is the
Standard delivery system
What is Medicaid?
This insurance plan covers the poor
What is the Affordable Care Act?
This insurance plan targets the uninsured
The length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan is referred to as (blank)
Vesting
The 1993 Family and Medical Leave Act applies to _____. A: all employers having less than 50 employees B: employees of the federal government C: employees of different state governments D: all employers having 50 or more employees
D - All employers have 50 or more employees.
Lorenzo and Sophia, an unmarried couple, have been living together for over four years. Lorenzo's employer, a major investment bank, has been providing certain benefits to Sophia. In this scenario, the benefits received by Sophia are called _____. A: domestic partner benefits B: flexible spending arrangements C: long term care insurance plans D: contingent worker benefits
A - Domestic Partner Benefits
What is a Health Reimbursement Account?
Funds in these accounts are contributed by the employer up to some fixed dollar amount.
Defined benefit plans that resemble defined contribution plans are called (blank)(blank)(blank)
Cash Balance Plans
The Pension Protection Act of 2006 defines pension plans less than _____ as 'at risk' plans. A: 90% funded B: 85% funded C: 75% funded D: 70% funded
D - 70% Funded
True or false: The use of alternative work arrangements offers a way to meet rapidly changing economic conditions.
True - The use of alternative work arrangements offers a way to meet rapidly changing economic conditions because it reduces direct workforce costs (because there are no legally required benefits for non-employees and other benefits may not be offered) and permits easier expansion and contraction of the workforce in response to expansion and contraction of production/services (sales)
What are the conditions for qualifying for the benefits of Social Security? (Check all that apply.) A: A worker must earn a specified amount of money for each quarter-year of coverage. B: A worker must possess a specified amount of experience in a particular skill area. C: A worker must work in covered employment. D: A worker must have dependents.
A and C
True or false: To discourage turnover, most companies make life insurance forfeitable when employees depart from the company.
True - Most life insurance premiums are paid entirely by the employer. To discourage turnover, almost all companies make this benefit forfeitable at the time of departure from the company.
The unemployment benefits of an unemployed worker are paid for by the _____. A: firm or firms most recently employing that currently unemployed worker B: employee contribution plan integrated with the unemployed worker's pension plan C: federal government through its Emergency Unemployment Compensation program D: insurance company that provided medical insurance and other benefits to the formerly employed worker
A - Firm or firms most recently employment that currently unemployed worker
What is the purpose of the Pension Benefit Guaranty Corporation (PBGC)? A: It guarantees payment of vested benefits to employees formerly covered by terminated pension plans. B: It allocates the shares of a company to eligible employee accounts. C: It develops benefits and savings plans that allow employees to defer pretax income. D: It mostly stores wealth amassed in other retirement vehicles rather than creating new wealth.
A - It guarantees payment of vested benefits to employees formerly covered by terminated pension plans.
How do companies use defined benefit plans to cut cost? A: They purchase annuities with insurance companies. B: They match employee savings at a rate of 50 cents on the dollar. C: They make a tax-deductible contribution of stock shares or cash to a trust. D: They invest in the stock market to avail funds for the plans.
A - They purchase annuities with insurance companies
How do Consumer Driven Health Plans and High Deductible Plans help cut health care costs? A: They shift much of the burden of purchasing health care over to employees. B: They define a maximum payout schedule for certain conditions. C: They coordinate benefits to ensure no double payment. D: They facilitate the audit of hospital charges for accuracy.
A - They shift much of the burden of purchasing health care over to employees.
What are the goals of the Employee Retirement Income Security Act (ERISA)? (Check all that apply.) A: To stimulate the growth of pension systems in which employers are not required to offer a pension plan B: To protect the interest of approximately 100 million active participants C: To allow employees to defer pretax income D: To encourage publicly traded companies to make a tax-deductible contribution of stock shares or cash to a trust
A and B
Which of the following are private sources of disability income? (Check all that apply.) A: Salary continuation plans B: Long-term disability plans C: Cash balance plans D: Point-of-service plans
A and B
Which of the following are true of alternative work arrangements? (Check all that apply.) A: Alternative work arrangements allow employers to easily expand and contract the labor force in response to fluctuation in sales. B: Alternative work arrangements reduce benefit costs because non-employees are not legally entitled to anything except health care. C:Alternative work arrangements reduce direct labor costs. D: Alternative work arrangements increase the morale of permanent employees.
A and C
Which of the following health care delivery systems pools together a group of health care providers who agree to provide services at a set rate in exchange for employers directing their employees only to these health care providers? A: A point-of-service plan B: A Health Maintenance Organization C: A Preferred Provider Organization D: A pay for service plan
B - A health maintenance organization
Before 1930, who was responsible for health care coverage in the United States? A: Health maintenance organizations B: The family C: Insurance companies D: The state
B - The family
Which of the following is a feature of point-of-service plans? A: They provide the freedom of a Health Maintenance Organization (HMO). B: The Preferred Provider Organization component of these plans does not require an individual to first contact the primary care physician. C: The Preferred Provider Organization component of these plans does not necessitate that in-network physicians be used. D: They provide the economic benefits of Preferred Provider Organizations.
B - The preferred provider organization component of these plans does not require an individual to first contact the primary care physician.
Life insurance coverage would typically be a group term insurance policy with a face value of _____. A: one to two times an employee's monthly salary B: one to two times an employee's annual salary C: three to four times an employee's annual salary D: three to four times an employee's monthly salary
B - one to two times an employee's annual salary
In the context of vesting, which of the following conditions are included in the Economic Growth and Tax Relief Reconciliation Act of 2001? (Check all that apply.) A: Full vesting after five years B: Full vesting after three years C: 15 percent vesting after four years and 15 percent each year thereafter D: 20 percent vesting after two years and 20 percent each year thereafter
B and D
What are the benefits that are given to employees under workers' compensation? (Check all that apply.) A: Social Security benefits B: Survivor death benefits C: Cost-of-living wages to employees over the age of 55 D: Medical care required to treat job-related injuries or illnesses E: Retirement insurance
B and D.
Which of the following categories of benefits fall under Social Security? (Check all that apply.) A: Payments for the education of dependents B: Old age or disability benefits C: Benefits for dependents of retired or disabled workers D: Benefits for surviving family members of a deceased worker E: Lump-sum death payments F: Benefits for dependents of a deceased veteran
B, C, D, and E.
Which of the following are cost control strategies for health care that involve changes in the design or the administration of health insurance policies? (Check all that apply.) A: Withdrawing incentives to employees who choose providers who meet certain high performance criteria B: Defining maximum payout schedules C: Deductibles D: Using intranet technology to allow employees access to online benefit information E: Nonessential second opinion whenever surgery is recommended F: Auditing of hospital charges for accuracy
B, C, D, and F
Identify the legal services provided by most legal insurance plans. (Check all that apply.) A: Arson B: Divorce C: Wills D: Escape from prison E: Real estate matters F: Traffic violations
B, C, E, and F
For workers to be covered by unemployment insurance, they must satisfy the state requirements for wages earned or time worked during a specific time period referred to as (blank)(blank)
Base period
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted by Congress in 1985 so that current and former employees and their spouses and dependents can avail _____. A: a group term life insurance policy with a face value of one to two times the employees' yearly income B: paid vacations and payments in place of vacation C: a temporary extension of group health insurance when coverage is lost due to qualifying events D: employer-provided retirement plans that will provide them with enough savings for a comfortable retirement
C - A temporary extension of group health insurance when coverage is lost due to qualifying events
The money to pay for Social Security benefits comes from _____. A: contributions made by non-profit groups B: government bonds C: contributions made by employees D: crowdfunding donations
C - Contributions made by employees.
It is important to note that for every dollar that an employee pays as his or her share of social security, there is a matching amount paid by the _____. A: insurer B: government C: employer D: beneficiary
C - Employer
Which of the following is true of the Employee Retirement Income Security Act (ERISA)? A: It applies to people who are not in the workforce. B: It is used as a way to build new wealth. C: It does not require that employers offer a pension plan. D: It is used mostly to store wealth accumulated in other retirement vehicles.
C - It does not require that employers offer a pension plan
Which of the following is a feature of an individual retirement account (IRA)? A: It does not apply to people who are not in the workforce. B: It requires an employer to set them up. C: It is used to store wealth accumulated in other retirement vehicles. D: It is used as a way to build new wealth.
C - It is used to store wealth accumulated in other retirement vehicles
As part of a health promotion initiative, StatexPro, a business analytics company, provides a special annual travel allowance up to $500 to employees who cycle to work on a daily basis. StatexPro's initiative is an example of a cost control strategy for health care that _____. A: comprises high deductibles B: rewards workers using negative reinforcement C: links incentives to healthy behavior D: is based on copays
C - Links incentives to healthy behavior
An important provision of the Pension Protection Act of 2006 permits employees of a publicly held company to _____. A: defer pretax income to their defined contribution plans B: establish individual retirement accounts as a means of creating new wealth C: sell any employer stock purchased through deferrals or after-tax contributions D: make a tax-deductible contribution to debt securities
C - Sell any employer stock purchased through deferrals or after-tax contributions.
What is the biggest concern for individuals who receive health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA)? A: The stringent privacy provisions B: The reliance on Social Security for retirement income by more than half of the population C: The relatively brief qualifying period D: The competitive pressures from globalization
C - The relatively brief qualifying period
The Pension Protection Act of 2006 was meant to safeguard the retirement income of employees and to _____. A: promote the growth of pension plans that are controlled by ERISA provisions B: encourage companies to make a tax-deductible contribution of stock shares or cash to a trust C: transfer some responsibility for retirement savings from the employer to the employee D: ensure payment of vested benefits to employees who were formerly covered by terminated pension plans
C - Transfer some responsibility for retirement savings from the employer to the employee.
Which of the following can be attributed to the relatively modest increase in dental care costs? (Check all that apply.) A: Insurance plans with high deductibles B: An acute shortage of dentists C: An excess supply of dentists D: Stringent cost control strategies
C and D
Identify the ways in which employers can reduce the costs associated with unemployment insurance. (Check all that apply.) A: By ensuring that unemployed workers find a job within 52 weeks of termination B: By basing benefits for voluntary unemployment on a percentage of an individual's earnings over a recent 20-week period C: By auditing compliance of terminated employees with unemployment insurance (UI) requirements D: By auditing pre-layoff behavior of employees E: By having a well-designed human resource planning system
C, D, and E
In most states, unemployment insurance is financed by _____. A: insurers B: the federal government C: state governments D: employers
D - Employers
How many quarters of coverage will insure any worker for life? A: Fifteen quarters B: Thirty-five quarters C: Twenty quarters D: Forty quarters
D - Forty Quarters
Which of the following statements is true of workers' compensation? A: It does not provide benefits for temporary disabilities and rehabilitation. B: It does not cover injuries and diseases that are caused by the actions of employees. C: It mandates employers to provide retirement insurance to retired employees. D: It covers injuries and diseases that arise out of, and while in the course of, employment.
D - It covers injuries and diseases that arise out of, and while in the course of, employment.
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is designed to _____. A: provide former employees with a temporary extension of group health insurance when coverage is lost because of layoffs B: provide employees with unpaid leave up to 12 weeks per year for specified medical reasons C: increase an employer's liability to pay survivor death benefits if an employee dies because of a job-related injury D: minimize an employer's ability to deny coverage for a preexisting condition
D - Minimize an employer's ability to deny coverage for a preexisting condition.
Using _____, employers choose specific health care providers who are willing to provide price discounts and follow stringent utilization controls. A: Health Maintenance Organizations B: indemnity plans C: point-of-service plans D: Preferred Provider Organizations
D - Preferred Provider Organizations
Johanna, an accountant at an auditing firm, consults a doctor about a preexisting inflammatory condition of the skin. After the consultation, the doctor prescribes medication and instructs Johanna to follow the treatment regimen. The doctor also makes Johanna sign a HIPAA (Health Insurance Portability and Accountability Act) document. The HIPAA document is most likely to benefit Johanna by _____. A: mandating Johanna's employer to pay for her medical treatment for job-related injury or illness B: entitling Johanna to receive unpaid leave up to 12 weeks per year for specified medical reasons C: ensuring that Johanna continues to receive medical coverage under her employer's group health care plan in case of termination D: prohibiting discrimination against Johanna on the basis of her health-related status
D - Prohibiting discrimination against Johanna on the basis of her health-related status
Which of the following firms is using a cost control strategy to reduce health care costs by linking incentives to healthy behaviors? A: Agripro, a food manufacturing firm that pays for the treatment of employee injuries or illnesses that arise out of employment B: B&N Partners, an investment firm that provides incentives to employees for using health care providers who meet certain high performance criteria C: Regal Travels, a travel firm that provides its employees up to 12 weeks of unpaid leave in case of medical emergencies D: The Fitness Quo, a fitness center that charges employees $500 more in health premiums if they fail to attend their biannual health checkups
D - The Fitness Quo, a fitness center that charges employees $500 more in health premiums if they fail to attend their biannual health checkups.
A (blank)(blank)(blank) directs an employer to provide a particular amount of retirement pension, which is represented as either a fixed dollar or a percentage-of-earnings amount that increases with the seniority of the employee in the organization.
Defined benefit plan
Benefits that are willingly provided by employers to an employee's unmarried partner are known as (blank)(blank)(blank)
Domestic Partner Benefits
True or false: Workers are covered by unemployment insurance regardless of whether they are unemployed through faults of their own.
False - For workers to be covered by unemployment insurance, they must be determined to be unemployed through no fault of their own.
A (blank)(blank)(blank) plan merges the benefits of Health Maintenance Organizations and Preferred Provider Organizations and allows individuals to select which plan to avail treatment from at the time that services are required.
Point of service
(blank) (blank) (blank) offers a proportion of one's salary (about 60% on average) for temporary disability due to sickness or injury.
Short Term Disability
What are Coordination of benefits?
This ensures no double payment when coverage exists under the employee's plan and a spouse's plan.
What are Coinsurance Rates?
This refers to premium payments being shared by the company and employee
Who pays for the majority of legal insurance premiums? A: The employer B: The employee C: The state D: The insurer
B - The employee
Which of the following is a savings plan that allows employees to defer pretax income? A: An employee stock ownership plan B: A salary continuation plan C: A point-of-service plan D: A 401(k) plan
D - A 401k plan
What is Medicare?
This insurance plan covers the elderly.
