chapter 16 practice quiz

12. Most state workers' compensation laws permit an employer to retain the workers' compensation risk if it can be proven that: a. the employer's firm is public. b. the employer is financially able to pay claims. c. the firm's risk exposures for employees are minimum. d. the employer's firm has an asset of $5 million or more. e. the firm has an annual profit of $5 million or more.

b

16. Which of the following statements is true about American with Disabilities Act (ADA)? a. The Supreme Court in 2002 clarified that the inability to perform a job is a disability. b. It forbids employers with more than fifteen employees from discriminating against disabled persons in employment. c. If the medical plan does not cover certain treatment needed by persons with disabilities, such as vision care, the employer has to add vision care treatment for disabilities. d. If vision care is provided by the medical plan, then vision care need not be offered to employees with disabilities. e. Specific disabilities, such as vision impairment, or disability in general, can be excluded from coverage.

b

19. Workers' compensation laws provide for four types of benefits: medical, income replacement, survivors' benefits, and rehabilitation. Identify the correct statement about medical benefits. a. Workers' compensation imposes deductibles and coinsurance to create incentives for individuals to control their demand for medical services. b. All laws provide unlimited medical care benefits for accidental injuries. c. To save on the escalating costs of medical care in workers' compensation, the medical coverage excludes managed care. d. Managed care increases the choice of doctors for the injured employee. e. In case of an injury, the doctors' decisions are reviewed by the insurer, but medical procedures do not require approval from the insurer.

b

20. Most state workers' compensation laws permit an employer to retain the workers' compensation risk if it can be proven that: a. the employer's firm is public. b. the employer is financially able to pay claims. c. the firm's risk exposures for employees are minimum. d. the employer's firm has an asset of $5 million or more. e. the firm has an annual profit of $5 million or more.

b

21. When a person is injured at work and can't return to work from five months, what will be the benefits he/she would receive? a. Medicare from social security and health insurance from the employer plus disability payment from workers' compensation b. Workers' compensation medical in full, disability and rehabilitation plus any disability benefits from the employer and bought privately c. Workers' compensation medical in full, survivor's benefits, disability and rehabilitation plus any disability benefits from the employer and bought privately d. Health insurance medical paid in full, disability and rehabilitation plus any disability benefits from the employer and bought privately e. None of the above

b

22. Various market mechanisms, such as assigned risk pools and reinsurance facilities, allow employers that are considered uninsurable access to workers' compensation insurance. Employers with large losses, as depicted by high experience ratings, are considered high risk. These employers encounter difficulty in finding workers' compensation coverage. The way to obtain coverage is through these involuntary markets. Identify this market. a. Secondary market b. Residual market c. Complimentary market d. Primary market e. Sundry market

b

23. Which of the following statements is true about the residual market? a. Firms that qualify for insurance based on normal underwriting guidelines and premiums can buy insurance through this market. b. Premium rates for insureds in this market are higher than those of the voluntary market. c. Operating losses in this market is lesser than operating losses in an assigned risk plan. d. Gains in this market can be 15 to 30 or more of premiums for employers insured in the voluntary market. e. Firms self-insure rather than opting for insurance in this market to retain profits obtained through self-insurance.

b

3. In compromising between the interests of employees and those of employers, the originators of workers' compensation systems limited the benefits available to employees to some amount less than the full loss. They also made those benefits the sole recourse of the employee against the employer for work-related injuries. This give-and-take of rights and duties between employers and employees is termed: a. obiter dictum. b. quid pro quo. c. uberrimae fidei. d. stare decisis. e. ratio decidendi.

b

5. An employee who is covered by workers' compensation cannot sue his or her employer for damages because workers' compensation is the employee's: a. fundamental right. b. sole remedy. c. inclusive remedy. d. derived remedy. e. elective right.

b

6. Workers' compensation laws provide for four types of benefits: medical, income replacement, survivors' benefits, and rehabilitation. Identify the correct statement about medical benefits. a. Workers' compensation imposes deductibles and coinsurance to create incentives for individuals to control their demand for medical services. b. All laws provide unlimited medical care benefits for accidental injuries. c. To save on the escalating costs of medical care in workers' compensation, the medical coverage excludes managed care. d. Managed care increases the choice of doctors for the injured employee. e. In case of an injury, the doctors' decisions are reviewed by the insurer, but medical procedures do not require approval from the insurer.

b

9. For employees with temporary total disability, maximum medical improvement is reached when: a. the employee is cured and is able to resume work on a full-time basis. b. additional medical treatment is not expected to result in improvement of the person's condition. c. the employee is able to do all the basic tasks of daily life, like eating, walking etc. d. additional medical treatment is expected to completely cure the person. e. additional medical treatment is expected to produce side-effects which have a probability to deteriorate a person's condition.

b

1. Which of the following is a system that enforces a series of state laws that requires employers to pay workers' for their work-related injuries and illnesses with no relationship to who caused the injury or illness? a. Professional liability b. Employment practices liability c. Workers' compensation d. Business interruption e. Property liability

c

11. Which part of the workers' compensation policy includes Other States Insurance? a. Part 1 b. Part 2 c. Part 3 d. Part 4 e. Part 5

c

14. If your firm is large enough to self-insure, your workers' compensation premium is: a. profit rated. b. rated according to the number of employees in the firm. c. experience rated. d. rated according to the financial capacity of your firm. e. sales rated.

c

18. If your firm is large enough to self-insure, your workers' compensation premium is: a. profit rated. b. rated according to the number of employees in the firm. c. experience rated. d. rated according to the financial capacity of your firm. e. sales rated.

c

4. Some state laws provide that either the employer or the employee may elect not to be covered under workers' compensation law. Identify these laws. a. Inclusive laws b. Core laws c. Derived laws d. Elective laws e. Exclusive laws

d

8. Which of the following is an example of a permanent partial disability? a. An employee in coma. b. An employee suffering from chronic insomnia. c. An employee who has a fractured leg. d. An employee who has lost an arm. e. An employee with three broken ribs.

d

10. The workers' compensation and employers' liability policy has three parts. Which of the following is not a limitation or exclusion of part 1 of the workers' compensation and employers' liability policy? a. Serious and willful misconduct by the insured b. The knowing employment of a person in violation of the law c. Failure to comply with health or safety laws or regulations d. The discharge, coercion, or other discrimination against employees e. Domestic and farm laborers

e

13. Self-insuring workers' compensation reduces benefits only if: a. you operate in states where workers' compensation is not mandatory. b. your insurer settles claims more efficiently than your self-insurance administrator. c. you have more than a thousand employees working for your firm. d. you are a member of a group self-insurance program. e. you or your self-insurance administrator settles claims more efficiently than your insurer.

e

17. Under this common law defense, an employee who was injured as a result of the conduct of a coworker could not recover damages from the employer. Identify this common law defense. a. Concurrent negligence b. Assumption of risk c. Attractive nuisance d. Contributory negligence e. Fellow-servant rule

e

2. Under this common law defense, an employee who was injured as a result of the conduct of a coworker could not recover damages from the employer. Identify this common law defense. a. Concurrent negligence b. Assumption of risk c. Attractive nuisance d. Contributory negligence e. Fellow-servant rule

e

7. Permanent total disability means that the injured employee: a. can perform some but not all work duties. b. is expected to be able to return to work at some future time. c. cannot perform the basic tasks, but can work. d. has lost certain body parts. e. is not expected to be able to work again.

e

because the state fund may be subsidized. d. It involves payment of a premium depending on the profitability of the company. e. Employers who have access to a state fund should consider it part of the market and compare its rates with those of private insurers.

e