MGT of Compensation Chapter 13
What are the conditions for qualifying for the benefits of Social Security?
-A worker must work in covered employment. -A worker must earn a specified amount of money for each quarter-year of coverage.
Which of the following are true of alternative work arrangements?
-Alternative work arrangements reduce direct labor costs. -Alternative work arrangements allow employers to easily expand and contract the labor force in response to fluctuation in sales.
Which of the following are private sources of disability income?
-Long-term disability plans -Salary continuation plans
Identify the legal services provided by most legal insurance plans.
-Real estate matters -Traffic violations -Wills -Divorce
What are the goals of the Employee Retirement Income Security Act (ERISA)?
-To protect the interest of approximately 100 million active participants -To stimulate the growth of pension systems in which employers are not required to offer a pension plan
Which of the following is true of the Employee Retirement Income Security Act (ERISA)?
It does not require that employers offer a pension plan.
What is the purpose of the Pension Benefit Guaranty Corporation (PBGC)?
It guarantees payment of vested benefits to employees formerly covered by terminated pension plans.
Which of the following is a feature of an individual retirement account (IRA)?
It is used to store wealth accumulated in other retirement vehicles.
Employers pay insurance premiums to the _____ in order to protect employees from the potential risks of an organization going bankrupt or failing to meet its vested pension commitments.
Pension Benefit Guaranty Corporation
Medicaid (national health insurance plans)
This insurance plan covers the poor.
Affordable Care Act (national health insurance plans)
This insurance plan targets the uninsured.
Coinsurance rates (meanings of cost control strategies for health care)
This refers to premium payments being shared by the company and employee.
To discourage turnover, most companies make life insurance forfeitable when employees depart from the company.
True (Since most life insurance premiums are paid entirely by the employer.)
The use of alternative work arrangements offers a way to meet rapidly changing economic conditions.
True (it reduces direct workforce costs (because there are no legally required benefits for non-employees and other benefits may not be offered) and permits easier expansion and contraction of the workforce in response to expansion and contraction of production/services (sales).)
The money to pay for Social Security benefits comes from _____.
contributions made by employees
It is important to note that for every dollar that an employee pays as his or her share of social security, there is a matching amount paid by the _____.
employer
In most states, unemployment insurance is financed by _____.
employers
The extra amount of unemployment compensation paid by a company depends on its ____ ____
experience rating
Health care delivery through _____ enable employees to choose any health care provider.
indemnity plans
Life insurance coverage would typically be a group term insurance policy with a face value of _____.
one to two times an employee's annual salary
A ____-____-____ plan merges the benefits of Health Maintenance Organizations and Preferred Provider Organizations and allows individuals to select which plan to avail treatment from at the time that services are required.
point-of-service
The 1993 Family and Medical Leave Act applies to _____.
all employers having 50 or more employees
The unemployment benefits of an unemployed worker are paid for by the _____.
firm or firms most recently employing that currently unemployed worker
The Health Insurance Portability and Accountability Act (HIPAA) of 1996 is designed to _____.
minimize an employer's ability to deny coverage for a preexisting condition
Which of the following categories of benefits fall under Social Security?
-Old age or disability benefits -Lump-sum death payments -Benefits for dependents of retired or disabled workers -Benefits for surviving family members of a deceased worker
What are the benefits that are given to employees under workers' compensation?
-Survivor death benefits -Medical care required to treat job-related injuries or illnesses
According to the 1993 Family and Medical Leave Act, all eligible employees are entitled to _____ of unpaid leave for stated family or medical reasons.
12 weeks per year
The Pension Protection Act of 2006 defines pension plans less than _____ as 'at risk' plans.
70% funded
Which of the following relieves an employer's liability in the event that a wound caused before employment combines with a wound caused during work to result in a disability greater than that caused by the latter alone?
Second-injury funds
Benefits that are willingly provided by employers to an employee's unmarried partner are known as ____ ____ ____
domestic partner benefits
Lorenzo and Sophia, an unmarried couple, have been living together for over four years. Lorenzo's employer, a major investment bank, has been providing certain benefits to Sophia. In this scenario, the benefits received by Sophia are called _____.
domestic partner benefits
Workers are covered by unemployment insurance regardless of whether they are unemployed through faults of their own.
False (must be determined to be unemployed through no fault of their own)
Johanna, an accountant at an auditing firm, consults a doctor about a preexisting inflammatory condition of the skin. After the consultation, the doctor prescribes medication and instructs Johanna to follow the treatment regimen. The doctor also makes Johanna sign a HIPAA (Health Insurance Portability and Accountability Act) document. The HIPAA document is most likely to benefit Johanna by _____.
prohibiting discrimination against Johanna on the basis of her health-related status
____-____ ____ offers a proportion of one's salary (about 60% on average) for temporary disability due to sickness or injury.
short-term disability
The dental equivalent of Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) is the ____ ____ ____
standard delivery system
The Pension Protection Act of 2006 was meant to safeguard the retirement income of employees and to _____.
transfer some responsibility for retirement savings from the employer to the employee
The length of time an employee must work for an employer before he or she is entitled to employer payments made into a pension plan is referred to as ____
vesting
Identify the ways in which employers can reduce the costs associated with unemployment insurance.
-By auditing compliance of terminated employees with unemployment insurance (UI) requirements -By auditing pre-layoff behavior of employees -By having a well-designed human resource planning system
Which of the following cost control strategies for health care are considered to be less extreme?
-Point-of-service plans -Consumer-directed health care plans -Health Maintenance Organizations -Preferred Provider Organizations
Profit-sharing plans can be considered defined contribution plans if _____.
the distribution of profits to employees is delayed until retirement
Which of the following are cost control strategies for health care that involve changes in the design or the administration of health insurance policies?
-Deductibles -Using intranet technology to allow employees access to online benefit information -Auditing of hospital charges for accuracy -Defining maximum payout schedules
As part of a health promotion initiative, StatexPro, a business analytics company, provides a special annual travel allowance up to $500 to employees who cycle to work on a daily basis. StatexPro's initiative is an example of a cost control strategy for health care that _____.
links incentives to healthy behavior
For workers to be covered by unemployment insurance, they must satisfy the state requirements for wages earned or time worked during a specific time period referred to as ____ ____
base period
Coordination of benefits (meanings of cost control strategies for health care)
This ensures no double payment when coverage exists under the employee's plan and a spouse's plan.
Which of the following can be attributed to the relatively modest increase in dental care costs?
-An excess supply of dentists -Stringent cost control strategies
In the context of vesting, which of the following conditions are included in the Economic Growth and Tax Relief Reconciliation Act of 2001?
-Full vesting after three years -20 percent vesting after two years and 20 percent each year thereafter
How many quarters of coverage will insure any worker for life?
Forty quarters
Identify a true statement about workers' compensation.
It is a form of no-fault insurance.
Who pays for the majority of legal insurance premiums?
The employee
A ____ ____ ____ directs an employer to provide a particular amount of retirement pension, which is represented as either a fixed dollar or a percentage-of-earnings amount that increases with the seniority of the employee in the organization.
defined benefit plan
A(n) ____ ____ ____ (ESOP) plan is a defined contribution plan in which a company makes a tax-deductible contribution of stock shares or cash to a trust.
employee stock ownership (plan)
Which of the following can be used as a tax-favored retirement savings plan?
An individual retirement account
Which of the following firms is using a cost control strategy to reduce health care costs by linking incentives to healthy behaviors?
The Fitness Quo, a fitness center that charges employees $500 more in health premiums if they fail to attend their biannual health checkups
Before 1930, who was responsible for health care coverage in the United States?
The family
What is the biggest concern for individuals who receive health insurance under the Consolidated Omnibus Budget Reconciliation Act (COBRA)?
The relatively brief qualifying period
How do companies use defined benefit plans to cut cost?
They purchase annuities with insurance companies.
How do Consumer Driven Health Plans and High Deductible Plans help cut health care costs?
They shift much of the burden of purchasing health care over to employees.
Medicare (national health insurance plans)
This insurance plan covers the elderly.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted by Congress in 1985 so that current and former employees and their spouses and dependents can avail _____.
a temporary extension of group health insurance when coverage is lost due to qualifying events