Chapter 13

For an employee to gain lifetime coverage under Social Security, they must have worked for____ quarters during which they were covered by the Act.

40

Data from WellPoint shows that ___of its customers' accounts for over 60 percent of its medical costs.

7%

Approximately ____ of social security benefits go to retirees and their dependents.

70%

Which of the following acts has caused HR and information technology staff considerable difficulty regarding compliance and privacy?

HIPPA

______ was designed to reduce an employer's ability to deny coverage to an employee based upon a preexisting condition

HIPPA

8. What are the three types of defined contribution plans?

There are three popular forms of defined contribution plans. A 401(k) plan is a savings plan in which employees can defer income up to a $12,000 maximum. The second type of plan is an employee stock ownership plan (ESOP). In a basic ESOP, a company makes a tax-deductible contribution of stock shares or cash to a trust. The trust then allocates company stock to participating employee accounts. Finally, profit sharing can be considered a defined contribution pension plan if the distribution of profits is delayed until retirement.

What are some of the benefits under Social Security?

Worker's retires, become disabled, or dies, Social security benefits are paid to replace part of the lost family earnings.

A comparison of employee benefits for private and state and local government reveals that

both wages and benefits are higher in the state and local governments.

Which of the following types of workers are generally not covered by workers' compensation?

farm workers

The rising costs of Social Security have been covered by

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

The time of benefit provided by the largest percent of both large and small firms is

paid time off

Which benefits is a federally administers program?

social security

17. 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 he wants to continue that coverage after being laid off. According to C.O.B.R.A. how long can Larry continue his coverage through Steve's Company?

0 MONTHS

Today, ____of the workforce is covered under the pension plan coverage by their employers

49%

16. What are some ways to control unemployment taxes?

?

1. Which are the benefits required by statutory law?

Benefits that are required by statutory law are workers' compensation, social security, and unemployment compensation

9. What is a cash-balance plan?

Cash balance plans are defined benefit plans that look like a defined contribution plan. Employees have a hypothetical account (like a 401[k]) into which is deposited what is typically a percentage of annual compensation. The dollar amount grows both from contributions by the employer and from some predetermined interest rate.

Which of the following is not a benefit that is required by statutory law?

Pension and retirement benefits

____ 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

had been described as a major cost of doing business.

Workers compensation

Experts attribute the decline in dollar cost of workers' compensation cost after 2005 to

employer safety programs.

Unemployment insurance is usually financed by

employer taxes paid to both federal and state funds.

7. Compare defined benefit plans and defined contribution plans.

In a defined benefit 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 contribution plans require specific contributions by an employer, but the final benefit that will be received by employees is unknown; it depends on the investment success of those charged with administering the pension fund.

Jennifer is hurt at work while driving a forklift. Her employer claims that she was driving too fast and therefore she is responsible for her own injury and is not eligible for workers' compensation. What will be the outcome of the employer's challenge to her workers' compensation claim?

She will likely receive workers' compensation benefits

5. Explain the coverage of the FMLA.

The 1993 Family and Medical Leave Act applies to all employers having 50 or more employees and entitles all eligible employees to receive unpaid leave up to 12 weeks per year for specified family or medical reasons. To be eligible, an employee must have worked at least 1,250 hours for the employer in the previous year.

6. What is the purpose of the HIPAA?

The 1996 Health Insurance Portability and Accountability Act (HIPAA) is designed to (1) lessen an employer's ability to deny coverage for a preexisting condition and (2) prohibit discrimination based on health-related status.

10. Explain vesting and portability.

Vesting refers to the length of time an employee must work for an employer before he or she is entitled to employer payments made into the pension plan. Portability refers to the issue of transferring pension benefits of employees moving to new organizations.

Explain the eligibility for unemployment insurance.

All workers except a few agricultural and domestic workers are currently covered by unemployment insurance (UI) laws. The eligibility requirements to receive benefits are:You must meet the State requirements for wages earned or time worked during an established (one year) period of time referred to as a "base period."You must be determined to be unemployed through no fault of your own [determined under

2. What are the areas covered as part of the no-fault insurance under workers' compensation?

As a form of no-fault insurance, workers' compensation covers injuries and diseases that arise out of, and while, employment. Benefits are given for the following: Permanent total disability and temporary total disability Permanent partial disability—loss of use of a body member Survivor benefits for fatal injuries Medical expenses Rehabilitation

3. What is the central challenge of social security payments? How are they tackled?

The money to pay social security benefits comes from contributions made by employees, their employers, and self-employed people during working years. As contributions are paid in each year, they are immediately used to pay for the benefits to current beneficiaries. This is a major problem with social security. While the number of retired workers continues to rise, no corresponding increase in the number of contributors to social security has offset the costs. To maintain solvency, there has been a dramatic increase in both the maximum earnings base and the rate at which that base is taxed.