Chapter 13

Some level of dental coverage is provided by about _____ percent of all employers with above 500 employees.

60

Data from WellPoint Inc shows that _____ percent of its 29 million customers account for over 60 percent of its medical costs.

7

Jim was a full-time student for four years, but he could not find a job after graduating. Jim is eligible to collect unemployment insurance.

False

The Employee Retirement Income Security Act states that employers must offer a retirement plan to their employees if they work for at least 1,250 hours per year.

False

Michael was laid off by his company owing to budget cuts. Before being laid off, he earned $1,000 per week. If he has been receiving unemployment insurance benefits for 26 weeks, which of the following statements is true in this scenario?

Michael is no longer eligible for unemployment benefits.

Which of the following benefits is a federally administered program?

Social Security

A qualified deferred compensation plan offers tax advantages to employers.

True

An individual retirement account is a tax-favored retirement savings plan that individuals can establish themselves.

True

Employees prefer defined contribution (DC) plans over defined benefit plans because DC plans tend to vest faster.

True

Employers who have frequent layoffs pay higher tax rates than those with few layoffs.

True

The Social Security Act has been designed and amended to provide a foundation of basic financial security for American workers and their families.

True

What is the first question that should be asked when determining the amount of retirement income an employer should provide?

What level of retirement compensation would the employer like to set as a target, expressed in relation to pre-retirement earnings?

Contingent workers receive _____ benefits than regular workers; contingent workers' benefits cost _____ for employers than it does for regular workers.

fewer; less

A health maintenance organization (HMO) pulls together a group of providers willing to provide services at an agreed upon rate in exchange for employers:

limiting employees to these providers for health services.

Steve has a small company with 12 employees. One of his employees, Larry, has been laid off because his work has been outsourced. Larry had health coverage through Steve's company and wants to continue that coverage. According to COBRA, how long can Larry continue his coverage through Steve's company after being laid off?

0 months

Maxford Corp. offers full vesting after two years. However, it does not offer portability of pension to its employees. Which of the following statements is true in this scenario?

Correct Maxford does not have to provide vested benefits to employees who quit before six months.

An employer experiencing high turnover and seeking to reduce pension cost is likely to prefer:

Correct full vesting after three years.

Employees are the sole contributors to their cash balance plans.

False

Under the Economic Growth and Tax Reconciliation Act of 2001, employers have three hundred vesting schedule options.

False

_____ is designed to lessen an employer's ability to deny coverage to an employee for a preexisting condition.

HIPPA

_____ relieve an employer's liability when a pre-employment injury combines with a work-related injury to produce a disability greater than that caused by the latter alone.

Second-injury funds

A McKinsey survey of CEOs found nearly 90 percent believe benefits are very important for attracting and retaining employees.

True

A major problem with Social Security is a rising number of retirees without a corresponding increase in the number of contributors.

True

Most employers prefer defined contribution pension plans to defined benefit plans.

True

The Pension Benefit Guarantee Corporation guarantees payment of vested benefits to employees formerly covered by terminated pension plans.

True

In a _____ plan, an employer agrees to provide a specific level of retirement pension, which is expressed as either a fixed dollar or a percentage-of-earnings amount that may vary (increase) with years of seniority in the company.

defined benefit

In the majority of the states, unemployment insurance is financed exclusively by:

employers that pay federal and state unemployment insurance.

The rising costs of Social Security have been covered by:

increases in the maximum earnings base and the rate at which that base is taxed.

The rising costs of Social Security have been covered by:

Increases in the maximum earnings base and the rate at which that base is taxed.

Jacob, an 18-year-old, has been working at HoldVille Corp. for over a year. If HoldVille offers full vesting after one year, which of the following statements is true?

Jacob is not eligible for pension as he is not over 21.

Which of the following is a benefit under Social Security?

Lump-sum death payments

Roughly _____ of all employees have access to paid life insurance.

three-fourths