BUSI 421 Exam 3 study

In order for a publicly held company to receive an income tax deduction for executive compensation, what is the maximum allowable amount of cash compensation paid to a CEO?

$1,000,000

Which of the following types of health insurance was originally designed by an organization of hospitals and physicians to facilitate payment of hospital and doctor bills?

Blue Cross / Blue Shield

Which of the following is true regarding HSA funding?

HSA funding is not subject to income tax

High-deductible health insurance is required with which of the following?

a Health Savings Account

A flexible spending plan is beneficial when

a and b

In health insurance plan design, which of the following are vitally important aspects of that design?

all of the above

Which of the following can an employer choose when designing a short-term disability or sick pay policy?

all of the above

Which of the following is true regarding health care costs?

all of the above

In lieu of a bonus, an employer can provide a tax-deferred benefit to employees by using

all of the above (a medical benefit plan, an incentive stock option plan, and a nonqualifed deferred compensation plan)

Advantages of a cafeteria plan include

cafeteria plans can be structured to meet a variety of employee benefit needs

Disadvantages of cafeteria plans include all of the following except

cafeteria plans provide numerous different benefits to employees in addition to basic benefits shared by all employees

Disadvantages of a flexible spending account include all of the following except

employer must contribute to employee flexible spending accounts

Disadvantages of an HMO include

except for certain emergencies, HMO subscribers must recieve care from physicians who are part of the HMO

Some health economists argue that offering an HSA as an alternative to traditional health insurance will eventually increase premiums for traditional health insurance because

healthy, high-income employees will select the HSA, leaving relatively sicker and older employees in the traditional health plan

Under the Affordable Care Act, all of the following are considered essential benefits, except

hearing care services and devices

Which of the following is seen as a primary advantage to bonus compensation?

it allows flexibility to reflect company performance

Common exclusions in a long-term disability policy include which of the following?

only a and b

Employee benefits under a Health Reimbursement Arrangement are tax free if

only a and b

Objectives that employers have for benefit plans include

only a and b (maximizing benefits for shareholder-employees, and matching benefit levels of local competitors)

A Health Reimbursement Arrangement cannot

provide extra benefits exclusively for a business owner and key employees