Test Your Knowledge: Chapter 12
According to a 1986 amendment to the _____, most employees cannot be forced to retire at a specific age. Older Workers Benefit Protection Act (OWBPA) Federal Insurance Contributions Act (FICA) Age Discrimination in Employment Act (ADEA) Employee Retirement Income Security Act (ERISA)
Age Discrimination in Employment Act (ADEA)
Which of the following is true of benefits administration and communication? Annual meetings can help workers better appreciate the value of their benefits than year-round, multichannel communications. Employees are often fully aware of the values and costs associated with the benefits provided by employers. Benefit communication and employees' satisfaction with benefits are most definitely linked. The use of social media is likely to deter employees from accessing benefits information.
Benefit communication and employees' satisfaction with benefits are most definitely linked.
Which of the following is NOT a guideline regarding Family and Medical Leave Act (FMLA) administration? Days off must be consecutive. Health care benefits must continue during FMLA leave. A fitness-for-duty test upon the return of an employee on FMLA leave is permitted. An employee on FMLA leave is required to use his or her paid vacation and personal leaves.
Days off must be consecutive.
Which of the following is NOT a guideline regarding Family and Medical Leave Act (FMLA) administration? Employees on leave must be able to return to a job, which may be a different job of lower status and pay. FMLA leaves run concurrently with any other disability leave. A 30-day notice from employees is required. There should be no penalty on employees under the attendance policy of their employer.
Employees on leave must be able to return to a job, which may be a different job of lower status and pay.
Which of the following statements regarding severance payments is NOT accurate? Severance payments are considered taxable income for Federal Insurance Contributions Act calculations. Employers must give the same severance package to all employees regardless of position or years of service. Severance pay may affect the unemployment benefits received by former employees. HR professionals and managers should consult state guidelines when instituting severance pay.
Employers must give the same severance package to all employees regardless of position or years of service.
_____ means that workers' compensation benefits are the only benefits injured workers may receive from the employer to compensate for work-related injuries. No-fault insurance Minimum remedy Exclusive remedy All-inclusive insurance
Exclusive remedy
Which of the following statements is true about a retirement plan? Organizations are required to offer defined benefit or defined contribution plans to employees beyond contributions to Social Security. Companies that provide defined benefit plans need not comply with strict government rules regarding the funding of the plan. It is a program established and funded by the federal government to fund citizens' retirement years. It is a program established and funded by the employer and/or employees to fund employees' retirement years.
It is a program established and funded by the employer and/or employees to fund employees' retirement years.
Which of the following statements is NOT true regarding Medicare? Medicare is a government-operated health insurance program for Americans aged 65 and above and for some citizens with disabilities. Like Social Security, Medicare is a legally required benefit. Medicare is funded by a tax on employers and employees, with each party paying 1.45 percent of employee earnings. Like the taxes paid for Social Security, there is an earnings limit on Medicare contributions.
Like the taxes paid for Social Security, there is an earnings limit on Medicare contributions.
_____ emphasize primary and preventive care, the use of specific providers that charge lower prices, restrictions on certain kinds of treatment, and prices negotiated with hospitals and physicians. Consumer-driven health plans Health improvement programs Managed care plans Wellness initiatives
Managed care plans
Which of the following is a legally required benefit? 401(k) plans Cash balance pension plans Public-service leave Medicare
Medicare
Which of the following statements regarding taxes and benefits is NOT true? Most benefits are not taxed as income to employees. If an employee is in a 25 percent tax bracket and earns a $400 bonus, the employee's total rewards is only increased by $300. An employer can deduct the cost of benefits as a business expense. A dollar in employee benefits is worth more than a dollar in salary to employees.
Most benefits are not taxed as income to employees.
Which of the following is NOT a qualifying event that would cause a covered employee or a covered family member to lose group health benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985? Reduction in work hours Reduction in wages Loss of employment Divorce from a covered employee
Reduction in wages
In the context of benefits administration, which of the following statements is NOT true of self-service? Self-service is technology that allows employees to change their benefit choices and track their benefit balances. The ideal self-service portal includes links to medical care providers, investment funds for retirement plans, and other important information. Self-service is designed so that HR assistance is not required by employees. Not all employees can easily navigate self-service portals.
Self-service is designed so that HR assistance is not required by employees.
Which of the following is NOT a key decision to be made as part of benefits design? What percentage of total rewards should be provided as benefits? Should the company use internal or external administration for providing benefits? What benefits should be promoted to employees as valuable? Which employees should be covered?
What benefits should be promoted to employees as valuable?
_____ refers to security benefits provided to workers who are injured on the job. Medicare Social Security Medicaid Workers' compensation
Workers' compensation
Even though paternity leave is available to male workers under the Family and Medical Leave Act (FMLA), _____. the percentage of men who take it has been decreasing in recent years Gen X fathers refuse to avail it a relatively low percentage of men take it the percentage of men who take it is the same as the percentage of women who take maternity leave
a relatively low percentage of men take it
One of the several legally required benefits is _____. medical plans paid vacation life insurance defined contribution retirement plans
medical plans
For the typical U.S. employer, the average cost of benefits often averages at least _____ of payroll expenses. one-eighth over half one-fourth one-third
one-third
In highly unionized U.S. manufacturing and utility industries, the average cost of benefits may represent _____ of payroll expenses. less than one-fourth over one-fifth less than one-third over half
over half
A retirement plan feature that allows employees to move their retirement benefits from one employer to another is called: vesting. carting. portability. migration.
portability.
In the context of employee benefits and status, part-time employees are most likely to _____. have access to health care benefits receive paid disability leave benefits have access to life insurance receive paid holidays and vacation
receive paid holidays and vacation
The Family and Medical Leave Act (FMLA) allows eligible employees to take a maximum of _____ weeks of unpaid, job-protected leave during any _____-month period. six; six 12; six 12; 12 six; 12
12; 12
Which of the following types of leaves of absence is NOT required by federal or state laws? Bereavement leave Jury leave Military leave for deployment Military leave for training
Bereavement leave
_____ was enacted in 1990 as an amendment to the Age Discrimination in Employment Act to address issues related to early retirement and severance situations. The Older Workers Benefit Protection Act The Federal Insurance Contributions Act Title VII of the Civil Rights Act The Employee Retirement Income Security Act
The Older Workers Benefit Protection Act
A right commonly associated with retirement plans is _____, which means that once an employee has worked for a required number of years, his or her pension rights and the amounts contributed by both the employer and the employee cannot be taken away. vesting fixing portability nesting
vesting
The normal retirement age to receive maximum Social Security benefits has been steadily increased from: 70 to 75. 65 to 67. 70 to 72. 62 to 68.
65 to 67.
Which of the following is a voluntary benefit and provides continuing income for workers who become disabled and are unable to work? Life insurance Workers' compensation Disability insurance Long-term care insurance
Disability insurance
Starting in 2018, earnings over the amount of _____ are not subject to Social Security tax. $117,000 $200,000 $128,400 $148,500
$128,400
In the context of employee benefits, which of the following is true of Millennial employees? They place high value on in-person interactions regarding their employee benefits. They favor an annual meeting during the open enrollment period over ongoing communications about benefit plans. They prefer standardized information to customized information when choosing among benefit options. They prefer the use of mass communication methods to learn all the details about their benefits.
They place high value on in-person interactions regarding their employee benefits.
_____ combine all sick leave, vacation time, and holidays into a total number of hours or days that employees can take off with pay. Family and medical leave (FML) plans Rest, recreate, and celebrate (RRC) plans Paid-time-off (PTO) plans On-holiday (OH) plans
Paid-time-off (PTO) plans
_____ allows employees to bridge between working full time and retiring full time while offering the employees' organization a chance to retain important knowledge and skills. Encapsulated development Phased employment Organizational citizenship behavior Phased retirement
Phased retirement
_____ is technology that allows employees to enroll in and change their benefit choices, track their benefit balances, and submit questions to HR staff members and external benefit providers. Third-party administration Auto-escalation Self-service Auto-enrollment
Self-service
Which of the following statements regarding paid holidays is NOT true? Most employers provide pay for a variety of holidays. Some employers pay time-and-a-half to hourly employees who must work on holidays. U.S. employers commonly offer more paid holidays than those in many other countries. The number of paid holidays can vary depending on state/provincial laws and union contracts.
U.S. employers commonly offer more paid holidays than those in many other countries.
Which of the following statements regarding public-sector benefits is NOT accurate? Workers in the public sector have for many years received less generous benefits than those in the private sector. Public-sector union contracts often include free health care and traditional defined benefit pension plans. Many states and cities face serious budget shortfalls because of the funding requirements for employee retirement and health care plans. Public-sector workers belong to labor unions at a much higher rate than do nongovernment workers.
Workers in the public sector have for many years received less generous benefits than those in the private sector
Question Content Area The term _____ refers to a situation in which only higher-risk employees opt for and use certain benefits. adverse selection control fraud agency dilemma moral hazard
adverse selection
A revision made to the Family and Medical Care Act (FMLA) in 2009: allows eligible employees to take a maximum of 10 weeks of unpaid, job-protected leave to care for a spouse, child, or parent with a serious health condition. expanded coverage of the law to all federal, state, and private employers with 30 or more employees who live within 75 miles of the workplace. allows families of injured active military servicemembers to take caregiving leave for up to 26 weeks to assist servicemembers who were injured on active duty. modified the definition of a serious health condition to include medical problems that exist beyond two days.
allows families of injured active military service members to take caregiving leave for up to 26 weeks to assist service members who were injured on active duty.
Programs to help employees deal with child-care and elder-care issues include all of the following EXCEPT: discounts at day-care centers, which may be subsidized by employers. employer-sponsored health care insurance for nannies. after-school programs for older school-age children. on-site child-care and elder-care centers.
employer-sponsored health care insurance for nannies.
Relocation benefits offered by employers may include all of the following EXCEPT: temporary living expenses. assistance to a trailing spouse in finding a job. moving expenses. financial planning services.
financial planning services.
Employees in most organizations can change their participation level in various benefit plans and switch between benefit options: at any time of the year. once per year on their employment anniversary. once per year during open enrollment. once per quarter during quarterly appraisals.
once per year during open enrollment.
In the context of employee benefits, one significant trend is the outsourcing of benefits administration to _____, who are vendors that provide enrollment, recordkeeping, and other administrative services to organizations. third-party administrators contingent workers special support vendors gig workers
third-party administrators
A(n) _____ allows for a percentage of an employee's pay to be withheld and invested in a tax-deferred account. defined benefit plan auto-enrollment plan 401(k) plan cash balance pension plan
401(k) plan
Which of the following statements regarding benefit costs is NOT true? Benefit costs have risen significantly in the past several years, particularly for health care. A common means of benefit cost control is cost sharing, which refers to having employees pay for more of their benefit costs. A common means of benefit cost control is instituting low-deductible plans. During economic downturns, many organizations stop contributing to employee 401(k) plans, reduce education reimbursement, and cut training expenses.
A common means of benefit cost control is instituting low-deductible plans.
Which of the following statements is NOT true regarding workers' compensation? Workers' compensation regulations require employers to provide medical care to employees for injuries that occur within the scope of their employment. Workers' compensation programs are funded at the employer's expense. An injured worker cannot receive workers' compensation benefits if the injury was the worker's fault. In most instances, a worker who accepts workers' compensation benefits cannot file a lawsuit for additional money.
An injured worker cannot receive workers' compensation benefits if the injury was the worker's fault.
Which of the following is a voluntary benefit offered to employees by employers? Military-service leave Severance pay Medical plans Unemployment compensation
Severance pay
Question Content Area Which of the following is the correct definition of a serious health condition? An illness that requires outpatient care or occasional treatment for medical problems that exist beyond seven days An illness or injury that requires outpatient care or occasional treatment by a health care provider for medical problems that exist beyond three weeks An injury that requires inpatient care or continuing treatment by a health care provider for medical problems that exist beyond one day An illness or injury that requires inpatient care or continuing treatment by a health care provider for medical problems that exist beyond three days
An illness or injury that requires inpatient care or continuing treatment by a health care provider for medical problems that exist beyond three days
The _____ was enacted in 1974 to ensure that private pension plans meet minimum standards. Older Workers Benefit Protection Act Federal Insurance Contributions Act Age Discrimination in Employment Act Employee Retirement Income Security Act
Employee Retirement Income Security Act
Which of the following provisions of the Patient Protection and Affordable Care Act (PPACA) is NOT true? It restricts insurance companies from setting rates based on an individual's health status, medical conditions, or other health-related factors. It eliminates lifetime and unreasonable annual benefit limits. It requires companies with 25 or more employees who work 35 hours a week or more to provide health care coverage or pay a penalty. It extends dependent coverage up to age 26.
It requires companies with 25 or more employees who work 35 hours a week or more to provide health care coverage or pay a penalty.
Which of the following is a voluntary financial benefit that allows employees to purchase insurance to cover costs for long-term health care in an assisted-living facility? PPACA-approved health care coverage Medicare Disability insurance Long-term care insurance
Long-term care insurance
In the context of employee benefits, which of the following benefits is a part-time employee more likely to receive? Health care benefits Paid disability leave benefits Life insurance benefits Retirement plan benefits
Retirement plan benefits
A company with 25 employees who work 30 hours a week opts to not provide health coverage to its employees. It also plans to hire more part-time staff to avoid providing health insurance coverage to its employees. Which of the following is NOT a possible consequence of this decision? The company will have to pay a heavy annual fine of $2,320 per employee. The company will find it difficult to attract new employees. The company may experience a negative effect on motivating and retaining employees. The company may receive backlash from customers.
The company will have to pay a heavy annual fine of $2,320 per employee.
Which of the following statements regarding leaves of absence is NOT true? Unpaid leaves of absence do not add to employer costs. Employers can pay the difference between an employee's regular pay and the jury pay when the employee is on jury leave. Leaves of absence may be paid or unpaid. Federal law prohibits discriminating against military reservists by requiring them to take vacation time when deployed or in training.
Unpaid leaves of absence do not add to employer costs.
The purpose of stock purchase plans is to: allow employees to purchase goods from local vendors or club stores at lower rates. help employees manage their personal finances by offering advice and planning tools. provide savings, checking, lending, and other financial services to employees. increase employee loyalty to an organization and interest in its success.
increase employee loyalty to an organization and interest in its success.
Which of the following benefits is voluntary? Military-service leave Workers' compensation Social Security Dental care
Dental care
A _____ is a health plan that provides employer financial contributions to employees to help cover their health-related expenses. consumer-driven health plan health improvement program cafeteria-style benefits plan wellness initiative
consumer-driven health plan
Employers offering health care benefits are taking several approaches to control and reduce costs, which include all of the following EXCEPT: covering spouses and other family members. increasing deductibles and copayments. establishing high-deductible plans. increasing employee contributions.
covering spouses and other family members.
Question Content Area A _____ sponsored by an employer provides savings, checking, lending, and other financial services for employees. credit union stock purchase plan discount program worker cooperative
credit union
A _____ is the money paid by an insured individual before his or her health plan pays for medical expenses. copayment wellness fee deductible qualifying payment
deductible
The cost of Social Security is funded through a tax on _____. the total monetary value of employee benefits employees' wages or salaries the annual profits earned by organizations employers' net income
employees' wages or salaries
Since 1980, all of the following are considered the legs of the three-legged stool of retirement income EXCEPT: Social Security. employee-funded retirement plan/defined contribution. retiree savings. employer-funded pension plan/defined benefit.
employer-funded pension plan/defined benefit.
A(n) _____ allows employees to select the benefits they prefer from options established by the employer. flexible benefits plan defined benefit plan defined contribution plan employee assistance program
flexible benefits plan
Which of the following situations would NOT qualify for a leave of absence under the Family and Medical Leave Act (FMLA)? The birth of a child Handling the affairs of a military family member who has lost his or her job The foster care placement of a child Caring for a parent with a serious health condition
Handling the affairs of a military family member who has lost his or her job
Which of the following statements regarding the Family and Medical Leave Act (FMLA) is NOT true? The FMLA was enacted in 1993 and has been amended several times. It allows eligible employees to take a maximum of six weeks of paid leave. It covers all federal, state, and private employers with 50 or more employees who live within 75 miles of the workplace. Only employees who have worked at least 12 months and 1,250 hours in the previous year are eligible for leave under the FMLA.
It allows eligible employees to take a maximum of six weeks of paid leave.
Which of the following statements regarding a defined benefit pension plan is true? It is less secure and predictable than a defined contribution plan. It is usually provided by a large percentage of companies in the private sector. It is a pension plan in which an employee continues to make a defined contribution even after retirement. It is a retirement program in which employees are promised a pension amount based on age and years of service.
It is a retirement program in which employees are promised a pension amount based on age and years of service.
Which of the following statements regarding a defined contribution pension plan is true? It is a retirement program in which an employee makes all the required payments to fund his or her retirement account. It is more secure and predictable than a defined benefit pension plan. It is common in the public sector and unionized workforces. It is a retirement program in which the employer and/or employee makes payments to fund an employee's retirement account.
It is a retirement program in which the employer and/or employee makes payments to fund an employee's retirement account.
Which of the following statements is true of the Worker Adjustment and Retraining Notification Act of 1988? It requires employers to give 60 days' notice of mass layoff or plant closings. It mandates outplacement assistance for employees affected by mass layoff or plant closings. It requires employers to give severance pay to employees affected by mass layoff or plant closings. It mandates continued health insurance for employees affected by mass layoff or plant closings.
It requires employers to give 60 days' notice of mass layoff or plant closings.
Which of the following is NOT true about the Patient Protection and Affordable Care Act (PPACA)? It requires coverage for preventive services. It requires employers who fail to provide adequate health coverage to pay an annual penalty of $1,000 per employee beyond the first 30 full-time workers. It restricts insurance companies from setting rates based on an individual's health status, medical conditions, or other health-related factors. It creates state-run health care exchanges through which insurance companies will offer competitive health plans.
It requires employers who fail to provide adequate health coverage to pay an annual penalty of $1,000 per employee beyond the first 30 full-time workers.
Which of the following statements related to the Older Workers Benefit Protection Act (OWBPA) is NOT accurate? It was enacted in 1990 as an amendment to the Age Discrimination in Employment Act. It requires older workers to have the option of phased retirement and the benefit of outplacement assistance services. It requires equal treatment for older workers in early retirement or severance situations. It sets specific criteria that must be met if older workers are asked to sign waivers promising not to sue for age discrimination in exchange for severance benefits during layoffs.
It requires older workers to have the option of phased retirement and the benefit of outplacement assistance services.
Which of the following is a strategy that employers can use to control health care benefit costs? Decreasing copayments Decreasing wellness efforts Instituting low-deductible plans Limiting family coverage
Limiting family coverage
Identify a true statement about benefits. Most benefits are not taxed as income to employees. The total cost of the benefits provided to employees cannot be deducted as a business expense by employers. Legally required benefits include workers' compensation, unemployment compensation, and stock purchase options. They are typically based on employee performance.
Most benefits are not taxed as income to employees.
Which of the following statements regarding employee-paid group benefits is NOT true? To combat the high cost of benefit programs, some companies offer employees the opportunity to purchase benefits through payroll deductions. Popular employee-paid benefits include disability insurance, pet health care insurance, critical illness coverage, and supplemental life insurance. The cost for benefits purchased through payroll deductions is typically more than if the employee purchased them on his or her own. Adding employee-paid voluntary benefits gives employees choices but also makes them responsible for selecting and funding the benefits they find valuable.
The cost for benefits purchased through payroll deductions is typically more than if the employee purchased them on his or her own.
Which of the following statements about the Employee Retirement Income Security Act (ERISA) is NOT accurate? It requires plans to periodically provide participants with information about plan features, funding, and benefit accrual amounts. The purpose of this law is to ensure equal treatment for older workers in early retirement or severance situations . It gives participants the right to file lawsuits for violations of the law. The purpose of this law is to ensure that private pension plans and other plans governed by ERISA meet minimum standards.
The purpose of this law is to ensure equal treatment for older workers in early retirement or severance situations
Which of the following statements is true of benefits? Most benefits, except paid time-off, are taxed as income to employees. They are tangible indirect rewards provided to an employee or group of employees for organizational membership. Legally required benefits include workers' compensation, education assistance, and stock purchase options. They are typically based on employee performance.
They are tangible indirect rewards provided to an employee or group of employees for organizational membership.
Which of the following approaches should companies use to improve employee participation in 401(k) plans? Using automatic enrollment and increases to get employees to participate Adopting a streamlined approach to retirement planning that considers only specific investments and potential streams of money Stopping workers from rolling over money from previous tax-deferred plans Including only those employees who have already done some retirement planning
Using automatic enrollment and increases to get employees to participate
Many employers have found paid-time-off (PTO) plans to _____ reducing absenteeism, scheduling time off, and assisting with recruiting and retention. be less effective than other means of be no more effective than other means of be more effective than other means of not be effective at all in
be more effective than other means of
To overcome the problem of some employees choosing inappropriate options from flex plans, employers can require employees to: submit a written letter stating family approval for their benefit choices. change their benefit choices in their flex plan every four months. discuss the benefits they prefer with an organizational counselor before finalizing them. select a core set of benefits and then offer options on other benefits.
select a core set of benefits and then offer options on other benefits.
