CH. 12

Which of the following companies uses probationary periods as a cost-containment measure?

DLG Corp. excludes its new recruits from benefit coverage until they complete a year

According to available evidence, companies can successfully remain nonunion by offering the same benefits as those provided by unionized firms.

False

All employee benefits provided by employers are taxable.

False

Employees' preferences of various benefits can be predicted accurately from demographic data.

False

Pension costs are of no concern to employers as the government handles the pension costs.

False

The _____ requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship.

Patient Protection and Affordable Care Act

_____ is the most frequently used medium for communicating employee benefits.

An employee benefit handbook

As part of the efforts to bring down the employee benefits cost to the company, GrindStop Corp. restricts the number of visits to the dentists covered in the dental plan to two per year. Which of the following cost-containment strategies is used by GrindStop?

Benefit limitation

_____ allows employees who have resigned or have been laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee.

COBRA (1984)

Today, benefits make up about 25 percent of payroll costs.

False

Which of the following is NOT a disadvantage of flexible benefit programs?

New benefits are more difficult to introduce.

A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.

True

A major reason for the proliferating cost of benefit programs is the narrow focus of benefit administrators.

True

Benefits can be an effective tool to attract and retain employees when the benefits address the needs of a target group.

True

Cost pressure related to increasing diversity of the workforce is one of the reasons companies are offering flexible benefit plans.

True

Employees prefer using their company's intranet for accessing their benefits information as they do not need to complete lengthy paperwork.

True

The only two benefits shown to reduce turnover are pensions and medical coverage.

True

The biggest cost-containment strategy in recent years is the movement to:

outsourcing

All of the following are advantages of flexible benefits EXCEPT:

decreased administrative expenses.

The Employment Retirement Income Security Act (1974) requires employers to offer some form of pension.

False

The favorable tax status granted to many benefits is safe from the threat of recurrent tax reform proposals.

False

DrenchFort Corp. is a small company that pays high wages. As its wages are high, it does not provide any benefits. Recently, it has noticed that its employee turnover has increased, so it decides to provide benefits to retain employees. Which of the following benefits is most likely to reduce turnover?

Medical coverage

By limiting liability for an employee's hospital stay costs to $200,000, an employer is using a cost-containment measure known as:

benefit ceiling.

Surveys show that the most highly valued benefit is:

medical insurance.

All of the following are cost-containment practices designed to reduce benefit costs EXCEPT:

provision of skills development training

A survey shows that the majority of employers are responding to increased benefit costs by _____.

requiring employees to pay higher deductibles and copays

A recent survey shows employees ranking employee benefits _____ in explaining job satisfaction.

second

One of the most preferred benefits is _____.

stock plans

The most widely used benefit survey is conducted by:

the U.S. Chamber of Commerce.