ACC 577 - EB Chapter 6

In 2015, on average, employers spent how much annually per employee to provide short-term disability insurance? A. $80 B. $125 C. $100 D. $140

$125

In 2015, on average, employers spent how much annually per employee to provide life insurance coverage? A. $83 B. $100 C. $120 D. $140

$83

To qualify as a group term life insurance policy, it must insure at least how many full-time employees? A. 20 B. 15 C. 10 D. 25

10

Most short-term disability insurance plans pay employees around how much of their regular pay? A. 85 - 100% B. 35 - 50% C. 50 - 67% D. 40 - 59%

50 - 67%

Most long-term disability insurance plans pay how much after a waiting period of how long? A. 70 - 90%, after 6 - 12 months B. 70 - 90%, after 3 - 6 months C. 50 - 70% after 6 - 12 months D. 50 - 70% after 3 - 6 months

50- 70% after 6 - 12 months

After an injury, claims to workers' compensation for rehabilitative services usually have to be submitted in what time frame? A. 6 - 24 months B. 1 - 3 months C. 6 - 12 months D. 3 - 12 months

6 - 24 months

US companies offered life insurance to what percentage full time employees in 2015? A. 52% B. 72% C. 60% D. 78%

72%

In 2015, what percentage of full-time and part-time employees received employer-sponsored life insurance? A. 38% full-time, 23% part-time B. 70% full-time, 30% part-time C. 69% full-time, 41% part-time D. 72% full-time, 13% part-time

72% full-time, 13% part-time

In short-term disability insurance plans, this term refers to the minimum amount of time an employee must wait after becoming disabled before disability insurance payments begin. A. Elimination period B. Exclusion period C. Pre-eligibility period D. Full integration period

A. Elimination period B. Exclusion period C. Pre-eligibility period D. Full integration period

Briefly discuss the origins of disability insurance and workers' compensation insurance programs in the US.

Began in late 1800s because • America's shift from an agrarian to an industrialized economy • Companies were NOT overly concerned with health and safety measures • Employees had little or no recourse if disabled on the job ● Prior to 1960s, there were three forms of disability insurance • Establishment funds, created by employers to provide minimal cash payments to disabled employees • Individual disability insurance, which was offered by insurance carriers • Group disability insurance ● Initial forms were primitive because they • Paid lump sum benefits • The amount was generally the same regardless of age or the severity of illness or injury ● Workers' compensation programs were created by state governments, rather than the federal government ● First workers' compensation law was passed in 1911 ● By 1948, every state had a workers' compensation law ● Two principles behind workers' compensation: • Employer is absolutely liable for providing benefits to employees for occupational disabilities or injuries that result, regardless of fault • Employers should assume that the costs of occupational injuries and accidents

Employer-sponsored disability insurance plans generally supplement legally required benefits established by which law? A. Family Medical Leave Act B. Employee Retirement Income Security Act C. Fair Labor Standards Act D. Social Security Act

Employee Retirement Income Security Act

According to ADA guidelines, which of the following is true? A. Employers can require a longer pre-eligibility period for employees with disabilities B. Employers cannot exclude qualified employees with disabilities from participating in its' disability retirement plans C. Employers must offer the same benefits to all under its disability retirement plans D. Employers must include cost-of-living adjustments on its disability benefits

Employers cannot exclude qualified employees with disabilities from participating in its' disability retirement plans

Self-inflicted wounds and drug dependency are generally considered as what in most short-term disability insurance plans? A. Partial disability provisions B. Exclusion provisions C. Elimination provisions D. Preexisting condition provisions

Exclusion provisions

Which of the following laws was NOT mentioned as having a major influence on company-sponsored disability insurance plans? A. Fair Labor Standards Act B. Age Discrimination in Employment Act C. Employee Retirement Income Security Act D. Americans with Disabilities Act

Fair Labor Standards Act

A term life insurance policy is considerably more expensive than whole life policy. True/False

False

Employers pay disability benefits from disability insurance policies or regular payroll. True/False

False

If a company is participating in workers' compensation programs and complying with applicable regulations, injured employees cannot bring a legal suit against them under any conditions. True/False

False

In 2015, employers generally paid $800 annually per private sector employee for workers' compensation protection. True/False

False

In short-term disability insurance plans, the exclusion period spans from the initial date of hire to the date of eligibility for coverage. True/False

False

Long-term disability insurance plans became effective following the end of short-term coverage and a 30-day elimination period. True/False

False

Long-term disability insurance plans used to cover partial disabilities, but ceased due to high costs. True/False

False

Long-term disability plans often contain exclusion provisions. True/False

False

Most group life insurance is offered on a contributory basis mainly because the employer enjoys substantially higher tax benefits than they do with noncontributory plans. True/False

False

One of every twenty employees will have a disability that lasts at least 90 days. True/False

False

Pregnancy and childbirth are not considered disabilities. True/False

False

Recipients of long-term disability benefits are also eligible to file ADA claims. True/False

False

Second-injury funds are a funding element of worker's compensation programs where claims are associated with two employees with similar injuries. True/False

False

State rely on rating manuals to specify workers' compensation insurance rates based on businesses payroll size. True/False

False

The values in the current Uniform Table were adjusted to reflect higher rates of mortality between 1988 and 2000. True/False

False

The wage-loss approach bases benefit amounts on approximate loss of earnings from scheduled injuries. True/False

False

Universal life insurance has less flexibility than whole life insurance. True/False

False

When paying permanent partial disability benefits, for unscheduled injuries, this approach bases the amount on the physical or mental loss associated with the injury to a bodily function. A. Dismemberment B. Loss of wage-earning capacity C. Wage-loss D. Impairment

Impairment

These reduce company-sponsored benefits by subtracting a particular percentage of these disability benefits from workers' compensation and Social Security disability plans. A. Elimination provisions B. Exclusion provisions C. Limited integration provisions D. Offset provisions

Offset provisions

This amendment contains the equal benefit or equal cost principle and bans termination of an employee's long-term disability benefits for active employees based on age. A. Older Workers Benefit Protection Act B. Retired Workers Protection Act C. Age Discrimination in Employment Act D. Older Workers Retirement Act

Older Workers Benefit Protection Act

If an employee suffers a disability that limits the kind of work an individual can perform on an enduring basis, she would qualify for what type of disability income under workers' compensation? A. Permanent total disability B. Temporary partial disability C. Permanent partial disability D. Temporary total disability

Permanent partial disability

Scheduled and unscheduled injuries are categories used to determine benefits for which type of disability income? A. Permanent total disability B. Temporary partial disability C. Permanent partial disability D. Temporary total disability

Permanent partial disability

This is a mental or physical disability for which medical advice, diagnosis, care or treatment was received, during a designated period preceding the beginning of disability insurance coverage. A. Pre-eligibility condition B. Exclusive condition C. Eliminating condition D. Preexisting condition

Preexisting condition

A miner who develops black lung disease is eligible for worker's compensation benefits. True/False

True

AD&D does not pay survivor benefits in the case of death by illness. True/False

True

Although workers' compensation benefits have unlimited medical care benefits, it does specify a maximum amount paid for certain procedures. True/False

True

An Administrative Services Only plan is a disability insurance funding plan that is handled through a third-party claims management company. True/False

True

An employee's pregnancy is covered under a company's short-term disability insurance program. True/False

True

Becoming injured while using an employer's product to perform work is an insurance of dual capacity and the injured employee would be eligible to file a worker's compensation claim. True/False

True

Both discretionary short-term and long-term disability plans sometimes duplicate public disability benefits mandated by state workers' compensation laws and the Social Security Act. True/False

True

By adding a partial disabilities inclusion, long-term disability carriers cover a portion of income loss associated with paid part-time employment while a disabled person works on a part-time basis in any job. True/False

True

Compared to life insurance, AD&D generally does not pay survivor benefits in the case of death by illness. True/False

True

Dual capacity means that a firm may fulfill a role for an employee that is completely different form its role as employer. True/False

True

Employer-sponsored disability insurance is more encompassing than worker's compensation, because its benefits generally apply to both work-related and nonwork-related illnesses and injuries. True/False

True

In the 1800s and early 1900s, the seriously injured workers left with virtually no recourse because social insurance programs were nonexistent. True/False

True

Long-term disability insurance carriers define long-term disability as an inability to engage in any occupation for which the individual is qualified by reason of training, education, or experience. True/False

True

Prior to the 1960s, establishment funds provided minimal cash payments to works who became occupationally ill or injured. True/False

True

Scheduled injuries involve the loss of a member of the body, including an arm, leg, finger, hand, or eye. True/False

True

Short-term disability insurance plans usually consider disability as an inability to perform any and every duty on one's occupation. True/False

True

Sick leave policies are separate from disability leave. True/False

True

State compulsory disability laws created workers' compensation programs. True/False

True

The short-term elimination period ranges from one to twelve months and the most common elimination period is three months. True/False

True

Under a universal life-insurance plan, policy holders can shift money between the insurance and savings components of the policy. True/False

True

Under partial self-funding of disability insurance, employers pay claims from their assets invested in a trust fund, for a limited period or up to a max dollar amount. True/False

True

When an employee files a lawsuit claiming retaliatory action, the employer possesses the burden of proof. True/False

True

Workers compensation laws do not apply to small businesses with fewer than a stipulated number of employees. True/False

True

What's it called when an employer intentionally fails to reveal the exposure of a worker to harmful substances? A. Deliberate and knowing tort B. Violation of an affirmative duty C. Deliberate and knowing affirmative duty D. Violation tort

Violation of an affirmative duty

Prior to the enactment of workers' compensation laws, injured employees could choose not to pursue compensation, or they could file a lawsuit. List and briefly define the three common-law defenses that employers could mount to earn liability.

• Assumption of risk - showing the injury resulted from an ordinary hazard of employment of which the worker should have been aware. • The fellow worker rule - showing the injury was caused by a fellow worker's negligence. • Contributory negligence - showing the worker's own negligence contributed to the injury, regardless of any fault of the employer.

What are the main characteristics of long-term disability insurance?

● Full benefits usually equals 50% to 70% of monthly pay (subject to a maximum) and the monthly maximum may be as high as $5,000 ● Benefits are subject to a waiting period of anywhere from 6 months to one year ● Benefits usually only become active after an employee's sick leave and short-term disability benefits have been exhausted ● Benefits payments usually continue until retirement or for a specified number of months

Briefly discuss the types of disabilities recognized under workers' compensation laws.

● Temporary total disabilities preclude individuals from performing meaningful work for a limited period ● Permanent total disabilities prevent individuals from ever performing any work ● Temporary partial disabilities allows individuals to perform limited amounts of work until making a full recovery ● Permanent partial disabilities limit the kind of work that individuals perform on an enduring basis

Briefly discuss the three types of life insurance policies offered in the US.

● Term life: • The most common type offered by employers • Provides protection to employees' beneficiaries only during a limited period based on a specified number of years or maximum age when the policy expires • No benefits are received by anyone when the policy expires • In order to continue coverage employee must renew the policy and make premium payments while below the maximum allowed age of coverage ● Whole life: • Pays beneficiaries' a specified amount upon the death of the employee • Policies do NOT expire until payment to beneficiaries • Is more expensive than term life • Combines insurance protection with savings because portion of the money paid to meet the premium is available in the future plus interest earned on this amount Universal life: • Provides protection to employees' beneficiaries based on the insurance feature of term life insurance • A more flexible savings or cash accumulation plan