MHC Chapter 13 Practice

Medicare provides a wide range of health services to people ________ or over. A) 55 B) 59 C) 60 D) 62 E) 65

Answer: D Explanation: The Social Security system also administers the Medicare program, which provides health services to people age 65 or older.

Which of the following provides lower rates for the employer or employee and includes all employees regardless of health, physical condition, or length of employment? A) workers' compensation insurance B) group life insurance C) health savings accounts D) disability insurance E) pension plans

Answer: B Explanation: In addition to hospitalization and medical benefits, most employers provide group life insurance plans. Employees can usually obtain lower rates in a group plan. And group plans usually accept all employees—including new, nonprobationary ones—regardless of health or physical condition.

For individuals born in 1960 or later, the full retirement age for non-discounted social security benefits is ________. A) 55 B) 62 C) 65 D) 67 E) 70

Answer: D Explanation: "Full retirement age" for non-discounted social security benefits traditionally was 65—the usual age for retirement. It is now 67 for those born in 1960 or later.

COBRA requires most private employers to continue to make health benefits available to terminated or retired employees and their families for a period of time, generally ________ months. A) 3 B) 6 C) 12 D) 18 E) 24

Answer: D Explanation: COBRA—Consolidated Omnibus Budget Reconciliation Act—requires most private employers to continue to make health benefits available to separated employees and their families for a time, generally 18 months after separation.

The Consolidated Omnibus Budget Reconciliation Act ________. A) requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits, including sick leave and disability benefits, health and medical insurance B) prohibits an employer's health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay C) limits the ability of health plans to set annual or lifetime maximums on mental and nervous disorder benefits D) requires that most private employers continue to make health benefits available to terminated or retired employees and their families for a period of time E) sets minimum requirements for protecting individuals' health-care data accessibility and confidentiality

Answer: D Explanation: COBRA—Consolidated Omnibus Budget Reconciliation Act—requires most private employers to continue to make health benefits available to separated employees and their families for a time, generally 18 months after separation. The former employee must pay for the coverage.

All of the following characterize cash balance plans EXCEPT ________. A) favors younger employees B) considered hybrid pension plans C) offers portability and predictable benefits D) employees earn interest on contributed amounts E) employers contribute percentage of employees' current pay

Answer: A Explanation: Cash balance plans favor older rather than younger employees because older employees usually have higher incomes. They are hybrid plans because they combine the portability of defined contribution plans and the predictable benefits of defined benefit plans.

Which of the following terms refers to benefits for time not worked such as unemployment insurance, vacation and holiday pay, and sick pay? A) supplemental pay benefits B) employee assistance C) financial incentives D) premium benefits E) merit pay

Answer: A Explanation: Pay for time not worked—also called supplemental pay benefits—is the most costly benefit. Common time-off-with-pay periods include holidays, vacations, jury duty, funeral leave, military duty, personal days, sick leave, sabbatical leave, maternity leave, and unemployment insurance payments for laid-off or terminated employees.

________ are groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee. A) PPOs B) HMOs C) DMOs D) ADDs E) Hospitals

Answer: A Explanation: Preferred provider organizations (PPOs) are a cross between HMOs and the traditional doctor-patient arrangement: They are "groups of health care providers that contract with employers, insurance companies, or third-party payers to provide medical care services at a reduced fee."

Which of the following is a popular workers' compensation cost-control measure that involves coordinating the medical care and health insurance coverage for each injured employee? A) nurse management B) case management C) health maintenance D) supplemental payments E) medical rehabilitation

Answer: B Explanation: Case management is a popular cost-control option. It is "the treatment of injured workers on a case-by-case basis by an assigned manager, usually a registered nurse, who coordinates with the physician and health plan to determine which care settings are the most effective for quality care and cost."

Taxes on employee wages are shared equally by employees and employers and apply to all earnings up to ________. A) $46,500 B) $63,700 C) $87,900 D) $106,800 E) $124,300

Answer: C Explanation: As of 2009, the maximum amount of earnings subject to Social Security tax was $106,800. Employer and employee each paid 7.65%.

________ seek to enable employees to balance their job and family responsibilities. A) Sick leave B) Pension plans C) Pay plans D) Work-life benefits E) Benefit management systems

Answer: D Explanation: Family-friendly or work-life benefits such as child care and fitness facilities are attempts by firms to help employees balance work and family responsibilities.

Which of the following benefits is NOT classified as a type of family-friendly benefit? A) sick leave B) subsidized child care C) elder care services D) on-site fitness facilities E) flexible work schedules

Answer: A Explanation: Family-friendly benefits include subsidized child care, on-site fitness facilities, elder care services, and flexible work schedules. Sick leave is useful when a child is ill; however, sick leave is a standard aspect of a job and not necessarily family-friendly.

Which of the following conditions must be met for an injured employee to earn workers' compensation from his or her employer? A) The employee was injured while on the job. B) The employee suffered the injury through no fault of his or her own. C) The employee worked for a minimum of 1250 hours during the past twelve months. D) The employee worked full-time for the employer for a minimum of twelve months. E) The employee received adequate job training to understand the position's requirements.

Answer: A Explanation: For workers' compensation to cover an injury or work-related illness, one must only prove that it arose while the worker was on the job. It does not matter that he or she may have been at fault; if the person was on the job when the injury occurred, he or she is entitled to workers' compensation.

Orion is a business software firm based in Atlanta that employs over 400 people. Orion has traditionally provided legislatively required benefits for its employees including Social Security, workers' compensation, and unemployment insurance. In addition, Orion offers employees health and dental insurance. Orion employees work Monday through Friday on a 9 to 5 schedule. Orion's top executives are considering the idea of adding a flexible benefits plan and implementing a flexible work schedule. Which of the following, if true, undermines the argument that Orion should offer its employees a cafeteria plan? A) A survey of Orion employees indicates that the majority of employees are very satisfied with the firm's current benefit offerings. B) Orion experiences very few workers' compensation claims each year as compared to similarly sized businesses in the Atlanta area. C) Orion employee surveys indicate that most employees are interested in either 401 (k) plans or Roth IRAs as methods of saving for retirement. D) Absenteeism is a problem among Orion employees, and in most cases the problem is due to inadequate child care. E) Orion uses an employee leasing firm to handle recruiting, hiring, and benefits administration.

Answer: A Explanation: If Orion's employees are satisfied with the type of benefits offered by the firm, then there is no need to change to a cafeteria plan. Cafeteria plans are useful when employees want more choice and variety in their benefits. Workers' compensation, retirement savings, child care, and employee leasing are irrelevant issues.

Which of the following provides pay to an employee when he or she is out of work because of illness? A) sick leave B) health insurance C) severance pay D) supplemental pay E) workers' compensation

Answer: A Explanation: Sick leave provides pay to employees when they're out of work due to illness. Most sick leave policies grant full pay for a specified number of sick days—usually up to about 12 per year.

Elizabeth works at an auto firm, which recently shut down for five weeks to change machinery. However, during the shutdown, Elizabeth was able to maintain her standard of living because of the firm's ________. A) supplemental unemployment benefits B) workers' compensation insurance C) supplemental health benefits D) disability insurance E) severance pay

Answer: A Explanation: Supplemental unemployment benefits are cash payments that supplement the employee's unemployment compensation, to help the person maintain his or her standard of living while out of work. They generally cover three contingencies: layoffs, reduced workweeks, and facility relocations.

All of the following are characteristic of 401(k) plans EXCEPT ________. A) categorized as a defined contribution plan B) deduction replaces Social Security tax C) pretax salary deductions invested D) administered by investment firms E) considered a savings and thrift plan

Answer: B Explanation: A 401(k) plan is a defined contribution plan and a savings and thrift plan. Employees invest by making pretax salary deductions, and the plans are usually administered by investment firms. A 401(k) contribution does not replace the Social Security tax.

Individualized plans allowed by employers to accommodate employee preferences for benefits is known by which of the following terms? A) variable pay plan B) cafeteria benefits plan C) matching plan D) executive perquisite plan E) life expectancy plan

Answer: B Explanation: A cafeteria plan is one in which the employer gives each employee a benefits fund budget, and lets the person spend it on the benefits he or she prefers.

Which of the following is an example of a compressed workweek? A) Maxwell works from 7 am to 3 pm Monday-Friday. B) Shannon works from 7 am to 5 pm Monday-Thursday. C) Tom works from 11 am to 7 pm five days per week. D) Amy works from 9 pm to 5 am five days per week. E) Bob works from 12 pm to 6 pm Monday-Sunday.

Answer: B Explanation: A compressed workweek involves working fewer but longer days each week, so working four 10-hour days is an example of a compressed workweek. Flextime is a work schedule in which employees' workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work.

How is the Social Security program funded? A) sale of government bonds B) tax on employee wages C) interest earned on foreign loans D) lottery ticket sales E) sales tax on luxury goods

Answer: B Explanation: A tax on the employee's wages, shared equally by employees and employers, funds Social Security (technically, "Federal Old Age and Survivor's Insurance"). As of 2009, the maximum amount of earnings subject to Social Security tax was $106,800.

Orion is a business software firm based in Atlanta that employs over 400 people. Orion has traditionally provided legislatively required benefits for its employees including Social Security, workers' compensation, and unemployment insurance. In addition, Orion offers employees health and dental insurance. Orion employees work Monday through Friday on a 9 to 5 schedule. Orion's top executives are considering the idea of adding a flexible benefits plan and implementing a flexible work schedule. Which of the following, if true, best supports the argument that Orion should offer its employees a cafeteria plan? A) Orion lacks the resources to join a low-cost health insurance plan, so the firm belongs to a pool with other businesses. B) Some Orion employees have indicated that they would like vision insurance, while others have no interest in dental insurance. C) In the past, Orion's rates for life, health, and dental insurance have been reasonable, and the firm has managed to keep deductibles low. D) Orion offers its employees a PPO health insurance plan, but employees have expressed interest in an HMO plan. E) Orion outsources its employee benefits program, so employees go through the plan's administrator when filing claims.

Answer: B Explanation: Cafeteria plans enable employees to choose the benefits they need. If some workers want vision while others want dental, then a cafeteria plan would be appropriate. Joining an insurance pool and outsourcing benefits administration are not relevant. Choices C and D are not directly relevant to whether or not a cafeteria plan is best for Orion.

Which of the following benefits is required by federal or state law? A) disability insurance B) workers' compensation C) personal leave D) health insurance E) pensions

Answer: B Explanation: Federal law requires that employers provide workers' compensation , but disability insurance, personal leave, health insurance, and pensions are optional for employers.

Orion is a business software firm based in Atlanta that employs over 400 people. Orion has traditionally provided legislatively required benefits for its employees including Social Security, workers' compensation, and unemployment insurance. In addition, Orion offers employees health and dental insurance. Orion employees work Monday through Friday on a 9 to 5 schedule. Orion's top executives are considering the idea of adding a flexible benefits plan and implementing a flexible work schedule. Which of the following, if true, best supports Orion's decision to offer flextime to its employees? A) Orion is facing financial difficulties and may need to implement layoffs. B) Orion's single-parent employees are frequently late when arriving to work. C) Orion allows some of its employees to telecommute at least one day each week. D) Many Orion employees must conduct business while traveling to different locations. E) Orion employs a large number of part-time employees, most of whom are near retirement age.

Answer: B Explanation: Flextime allows workers to shift their work schedules slightly. Single parents who are late because of child care responsibilities would likely be more punctual if they could arrange their schedules around school or daycare hours. Work sharing applies to Choice A, while workplace flexibility applies to Choice D.

Which of the following is a prepaid health care system that provides medical services for employees who pay a nominal fee? A) PPO B) HMO C) DMO D) HOC E) ESOP

Answer: B Explanation: Many employers offer membership in a health maintenance organization (HMO) as a hospital/medical insurance option. The HMO is a medical organization consisting of specialists (surgeons, psychiatrists, and so on), often operating out of a health care center. It provides routine medical services to employees who pay a nominal fee.

All of the following are the most likely reasons that mental health costs are rising EXCEPT ________. A) increased drug abuse within society B) more mental health referrals by specialists C) higher alcoholism rates among employees D) mental health claims triggering health care claims E) laws requiring employers to offer mental health benefits

Answer: B Explanation: Mental health costs are rising. Reasons include widespread drug and alcohol problems, an increase in states that require employers to offer minimum mental health benefits, and the fact that mental health claims tend to trigger other health care claims. Referrals are less likely to explain the increased costs.

Eric has worked full-time for a large manufacturing company for over three years. Eric and his wife have recently adopted a baby, and Eric wants to take time off from work to care for the child. Which of the following laws most likely applies to Eric's situation? A) Pregnancy Discrimination Act B) Family and Medical Leave Act C) Title VII of the Civil Rights Act D) Newborn Mother's Protection Act E) Health Insurance Portability and Accountability Act

Answer: B Explanation: Private employers of 50 or more employees must provide eligible employees (women or men) up to 12 weeks of unpaid leave for their own serious illness, the birth or adoption of a child, or the care of a seriously ill child, spouse, or parent.

Which of the following requires that pension rights be vested and protected by the Pension Benefits Guarantee Corporation? A) Economic Growth and Tax Relief Conciliation Act B) Employee Retirement Income Security Act C) Job Creation and Worker Assistance Act D) Health Insurance Portability and Accountability Act E) Social Security Act

Answer: B Explanation: Signed into law by President Ford in 1974, ERISA requires that pension rights be vested and protected by a government agency, the PBGC. It requires that employers have written pension plan documents and adhere to certain guidelines.

The Family and Medical Leave Act ________. A) provides guidelines regarding what rates of return employers should use in computing their pension plan values B) ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee's own serious health condition C) prohibits an employer's health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively-determined minimum stay D) limits the ability of health plans to set annual or lifetime maximums on mental and nervous disorder benefits E) sets minimum requirements for protecting individuals' health-care data accessibility and confidentiality

Answer: B Explanation: The FMLA of 1993 ensures that an employer must grant an employee up to 12 weeks of leave in a twelve-month period for the birth or care of a newborn child, placement of a child for adoption, to care for a spouse, child, or parent with a serious health condition, or to care for the employee's own serious health condition.

Which of the following requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any employee not able to work, with respect to all benefits? A) Family and Medical Leave Act B) Pregnancy Discrimination Act C) Comprehensive Omnibus Budget Reconciliation Act D) Health Insurance Portability and Accountability Act E) Americans with Disabilities Act

Answer: B Explanation: The Pregnancy Discrimination Act requires employers to treat women affected by pregnancy, childbirth, or related medical conditions the same as any other employees not able to work, with respect to all benefits. The FMLA allows employees to take medical leave for the birth of a child.

Malcolm is interviewing for a new job and he is evaluating the quality of the pension plans offered for each company he is considering. One company offers a pension plan in which the company will make all contributions to the plan and will base his pension benefit on a formula linked to his pay at the time of retirement and the number of years he was with the firm. This pension plan could be classified as ________. A) qualified, defined benefit B) non-contributory, defined benefit C) non-contributory, defined contribution D) contributory, qualified E) contributory, defined benefit

Answer: B Explanation: The employee contributes to the contributory pension plan, while the employer makes all contributions to non-contributory plans. With defined benefit pension plans, employees know ahead of time the pension benefits they will receive (the benefit is "defined" or specified by amount or formula). Defined contribution pension plans specify what contribution the employee and/or employer will make to the employee's retirement or savings fund. Therefore, Malcolm has a non-contributory, defined benefit pension plan.

Keith works as a construction foreman, and he is viewed as a reliable, competent employee. Keith was recently injured in a car accident while on vacation, and his injuries are so severe that he will not be able to return to work. Which of the following would most likely provide Keith with benefits? A) sick leave B) unemployment insurance C) workers' compensation insurance D) supplemental unemployment benefits E) group life insurance

Answer: B Explanation: Unemployment insurance provides benefits if a person is unable to work through no fault of his or her own. Workers' compensation is for on-the-job injuries, and supplemental unemployment benefits provide a guaranteed annual income when certain industries are forced to shut down temporarily.

Nonfinancial payments like health and life insurance, pensions, time off with pay, and child care facilities are examples of ________. A) variable pay B) competency-based incentives C) benefits D) salary E) bonuses

Answer: C Explanation: Benefits are indirect financial and nonfinancial payments employees receive for continuing their employment with the company. They include things like health and life insurance, pensions, time off with pay, and child-care assistance.

Which of the following requires that most private employers continue to make health benefits available to terminated or retired employees and their families for a period of time? A) FMLA B) ERISA C) COBRA D) OSHA E) ADA

Answer: C Explanation: COBRA—Consolidated Omnibus Budget Reconciliation Act—requires most private employers to continue to make health benefits available to separated employees and their families for a time, generally 18 months after separation. The former employee must pay for the coverage.

_______ provide services like financial counseling, child care referrals, elder care referrals, adoption assistance, mental health counseling, and life event planning. A) Social Security programs B) Pension plans C) Employee assistance programs D) Family-friendly benefits E) Benefit management systems

Answer: C Explanation: Employee assistance programs (EAPs) provide counseling and advisory services, such as personal legal and financial services, child and elder care referrals, adoption assistance, mental health counseling, and life event planning. EAPs are increasingly popular, with more than 60% of larger firms offering such programs.

Which of the following best explains why many businesses use employee leasing firms? A) Firms save money by hiring part-time or temporary workers. B) Investment opportunities are more plentiful and reliable. C) Small companies are able to get better insurance rates. D) Franchise owners can offer more flexible schedules. E) Small businesses must comply with federal laws.

Answer: C Explanation: Employee leasing firms (also called professional employer organizations or staff leasing firms) assume all or most of the employer's human resources chores. Insurance and benefits are usually the big attraction. Getting health and other insurance is a problem for smaller firms, and leasing firms enable them to join a larger pool.

To be eligible for leave under the Family and Medical Leave Act, an employee must have worked ________ hours during the past twelve consecutive months. A) 850 B) 1000 C) 1250 D) 1600 E) 1950

Answer: C Explanation: Employees are eligible if they have worked for the employer for at least one year and for 1,250 hours over the last 12 months.

Stephanie has opted to work from 7 am to 3 pm so that she can be home when her son finishes school in the afternoons. Her company must offer ________ for Stephanie to have this option. A) work sharing B) shift work C) flextime D) telecommuting E) compressed workweeks

Answer: C Explanation: Flextime is a work schedule in which employees' workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work. A compressed workweek involves working fewer but longer days each week.

Which of the following refers to a plan in which employees contribute a portion of their earnings to a fund and the employer typically matches the contribution in whole or part? A) flexible benefits plan B) group investment plan C) savings and thrift plan D) deferred profit-sharing plan E) employee stock ownership plan

Answer: C Explanation: In any savings and thrift plan, employees contribute a portion of their earnings to a fund, and the employer usually matches this contribution completely or in part.The 401(k) plan is one example of a savings and thrift plan.

Anne and Martha are both accountant supervisors at a large marketing firm. Anne works from 7:00 a.m. until 12:00 p.m. each day. Martha takes over the same position at 12:00 p.m. and works until 5:00 p.m. each day. Which of the following most likely describes this type of work arrangement? A) flextime B) telecommuting C) job sharing D) work sharing E) compressed workweek

Answer: C Explanation: Job sharing allows two or more people to share a single full-time job. Anne and Martha share a 40-hour-per-week job, with one working mornings and the other working afternoons. Work sharing refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs.

Which of the following terms refers to a one-time payment some employers provide when terminating an employee? A) merit pay B) annual bonus C) severance pay D) performance pay E) competency-based pay

Answer: C Explanation: Many employers provide severance pay, a one-time separation payment when terminating an employee. Severance pay is a humanitarian gesture, and it reduces the chances of litigation from disgruntled former employees is another reason.

Which health benefit is offered by almost all employers? A) vision insurance B) chiropractic insurance C) prescription drug coverage D) dependant life insurance E) health maintenance organization

Answer: C Explanation: Prescription drug coverage is offered by 96% of employers. Only 35% offer HMO and 58% offer life insurance for dependents. Chiropractic and vision insurance are popular, but less popular than prescription drug coverage.

What was the result of the American Recovery and Reinvestment Act of 2009? A) Unemployed citizens received COBRA coverage for free. B) Employers were no longer required to pay COBRA premiums. C) Employers were required to pay 65% of the COBRA premium. D) COBRA coverage was extended to employees dismissed for misconduct. E) COBRA coverage added dental and vision coverage to the health benefits.

Answer: C Explanation: The American Recovery and Reinvestment Act of 2009 made it easier for qualified employees who were involuntarily dismissed for any reason (other than gross misconduct) to sign up for COBRA. The employer pays 65% of the premium, and the former employee pays 35%.

Which of the following provides guidelines regarding what rates of return employers should use in computing their pension plan values? A) Employee Retirement Income Security Act B) Economic Growth and Tax Relief Conciliation Act C) Job Creation and Worker Assistance Act D) Social Security Act E) Equal Pay Act

Answer: C Explanation: The Job Creation and Worker Assistance Act provides guidelines regarding what rates of return employers should use in computing their pension plan values. ERISA requires that employers have written pension plan documents and adhere to certain guidelines.

In which of the following can employers and employees deposit pretax wages to pay for non-catastrophic medical expenses? A) health maintenance organizations B) health benefits funds C) health savings accounts D) employee pension plans E) deferred savings plans

Answer: C Explanation: The Medicare Modernization Act of 2003 allows employers to establish tax-free health savings accounts (HSA). After the employer, employee, or both deposit pretax (and thus tax sheltered) pay in the employees' HSAs, employees or their families can use their HSA funds to pay for "low dollar" (not catastrophic) medical expenses.

Which of the following best describes the purpose of the Newborn Mother's Protection Act? A) provide guidelines regarding what rates of return employers should use in computing their pension plan values B) guarantee pension plans and health insurance coverage for female employees who have recently given birth C) prohibit employer health plans from using incentives to encourage employees to leave the hospital after childbirth sooner than legally required D) prevent employers from discriminating against women affected by pregnancy or childbirth in respect to benefits coverage E) set minimum requirements for accessing the health records of female employees

Answer: C Explanation: The Newborn Mother's Protection Act of 1996 prohibits employers' health plans from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively determined minimum stay.

Jenny must contribute at least 5% of her annual salary to her pension plan, and her employer contributes a set amount as well. She is given choices regarding how the money is invested. When she retires, the amount she has available will depend on how much she invested herself, and the rate of return on the investments she chose. This pension plan could be classified as ________. A) qualified, defined benefit B) non-contributory, defined benefit C) contributory, defined contribution D) contributory, non-qualified E) contributory, defined benefit

Answer: C Explanation: The employee contributes to the contributory pension plan, while the employer makes all contributions to non-contributory plans. With defined benefit pension plans, employees know ahead of time the pension benefits they will receive (the benefit is "defined" or specified by amount or formula). Defined contribution pension plans specify what contribution the employee and/or employer will make to the employee's retirement or savings fund. Therefore, Jenny has a contributory, defined contribution plan.

A plan that contains a formula for determining retirement benefits is known as a ________. A) defined contribution pension plan B) employee stock ownership plan C) defined benefit pension plan D) cash balance plan E) 401(k) plan

Answer: C Explanation: With defined benefit pension plans, employees know ahead of time the pension benefits they will receive (the benefit is "defined" or specified by amount or formula). In contrast, defined contribution pension plans specify what contribution the employee and/or employer will make to the employee's retirement or savings fund.

All of the following are preventive services offered by employers as part of their wellness programs EXCEPT ________. A) anti-smoking incentives B) low-cost immunizations C) stress management seminars D) case management services E) on-site primary care

Answer: D Explanation: Anti-smoking programs, immunizations, on-site health care services, and stress management seminars are all wellness programs offered by employers to prevent employee health problems. Case management is a method used by employers to save money in workers' compensation claims.

All of the following are health care cost-control methods used by employers EXCEPT ________. A) requiring employees to pay high premiums B) offering disease prevention programs C) auditing medical claims for errors D) requiring disability insurance E) encouraging medical tourism

Answer: D Explanation: Auditing claims, encouraging medical tourism, and increasing wellness programs are ways that employers try to control health care costs. Employers are also requiring employees to pay higher premiums and co-payments than in the past. Requiring disability insurance is less likely to reduce health care costs.

The indirect financial and nonfinancial payments employees receive for continuing their employment with a company are called ________. A) reimbursement B) compensation C) salary D) benefits E) remuneration

Answer: D Explanation: Benefits—indirect financial and nonfinancial payments employees receive for continuing their employment with the company—are an important part of just about everyone's compensation. They include things like health and life insurance, pensions, time off with pay, and child-care assistance.

Which of the following is NOT an employer cost associated with granting leave to employees under the Family and Medical Leave Act? A) cost to recruit replacement workers B) cost of paying temporary workers C) cost to train replacement workers D) pay for time not worked to employee E) lower productivity of replacement workers

Answer: D Explanation: FMLA leaves are usually unpaid, but they're not costless. The costs associated with hiring temporary replacements, training them, and compensating for their lower productivity can be considerable.

Which of the following occupations is commonly subjected to compressed workweeks? A) engineer B) attorney C) teacher D) pilot E) manager

Answer: D Explanation: Occupations like pilot, nurse, doctor, and firefighter typically involve compressed workweek schedules, which means working fewer days but longer each day.

When an employer makes all of the contributions to the pension plan, the pension plan is classified as ________. A) qualified B) non-qualified C) defined contribution D) non-contributory E) defined benefit

Answer: D Explanation: Pension plans are classified in three ways: contributory versus non-contributory plans, qualified versus non-qualified plans, and defined contribution versus defined benefit plans. The employee contributes to the contributory pension plan, while the employer makes all contributions to non-contributory plans.

Which of the following provides a fixed sum when employees reach a predetermined retirement age or can no longer work due to disability? A) 401(k) plan B) workers' compensation C) Social Security D) pension plan E) group life insurance

Answer: D Explanation: Pension plans are financial programs that provide income to individuals in their retirement. Pension plans provide a fixed sum when employees reach a predetermined retirement age or when they can no longer work due to disability.

What is the maximum number of weeks of unpaid leave that an employee may take under the Family and Medical Leave Act? A) four B) six C) ten D) twelve E) sixteen

Answer: D Explanation: Private employers of 50 or more employees must provide eligible employees (women or men) up to 12 weeks of unpaid leave for their own serious illness, the birth or adoption of a child, or the care of a seriously ill child, spouse, or parent.

Orion is a business software firm based in Atlanta that employs over 400 people. Orion has traditionally provided legislatively required benefits for its employees including Social Security, workers' compensation, and unemployment insurance. In addition, Orion offers employees health and dental insurance. Orion employees work Monday through Friday on a 9 to 5 schedule. Orion's top executives are considering the idea of adding a flexible benefits plan and implementing a flexible work schedule. All of the following questions are relevant to Orion's decision to offer flextime and job sharing options to its employees EXCEPT ________. A) How many of Orion's retirement-age employees are interested in working on a part-time basis? B) What do surveys indicate regarding overall job satisfaction among Orion employees? C) How would the productivity level of Orion's employees most likely change? D) How many Orion employees currently care for their aging parents? E) What is the average rate of employee absenteeism at Orion?

Answer: D Explanation: Retirement-age employees would most likely be interested in job sharing. Job satisfaction, productivity, and absenteeism are important issues to consider if going to a flexible work schedule. Flexible benefits rather than flexible schedules are applicable to elder care issues.

Social Security offers all of the following EXCEPT ________. A) income for retirees 62 or older who are insured under the Social Security Act B) survivor's benefits for those insured under the Social Security Act C) disability payments to employees who become totally disabled D) tax refunds for retirees who are 55 and older E) Medicare program administration

Answer: D Explanation: SS provides an income if you retire at age 62 or thereafter and are insured under the Social Security Act. Survivor's benefits provide monthly payments to your dependents regardless of your age at death, again assuming you are insured under the Social Security Act. There are also disability payments to employees who become disabled totally if they meet certain requirements. The Social Security system also administers the Medicare program, but tax refunds are not part of the Social Security system.

Orion is a business software firm based in Atlanta that employs over 400 people. Orion has traditionally provided legislatively required benefits for its employees including Social Security, workers' compensation, and unemployment insurance. In addition, Orion offers employees health and dental insurance. Orion employees work Monday through Friday on a 9 to 5 schedule. Orion's top executives are considering the idea of adding a flexible benefits plan and implementing a flexible work schedule. All of the following questions are relevant to Orion's decision to add a cafeteria plan EXCEPT ________. A) How satisfied are Orion's employees with the current benefits plan? B) What benefits are available to employees at Orion's main competitors? C) What costs would Orion incur for switching to a cafeteria benefits plan? D) How would a cafeteria plan alter Orion employees' Social Security benefits? E) What effect would a cafeteria plan have on the coverage that Orion employees receive?

Answer: D Explanation: Social Security is required, so it is irrelevant to a decision about a cafeteria plan. Employee attitudes about the current plan, costs, and changes in coverage are important issues to consider. For recruiting and employee retention purposes, Orion should be aware of what competitors offer.

All of the following benefits are required by federal or state law EXCEPT ________. A) social security B) workers' compensation C) unemployment insurance D) disability insurance E) maternity leave

Answer: D Explanation: Social Security, workers' compensation, and unemployment insurance are required by federal and/or state laws. Maternity leave is covered under the Family Medical Leave Act. Disability insurance is not required.

Which of the following sets minimum mental health care benefits? A) Civil Rights Act B) Employee Mental Health Act C) Americans with Disabilities Act D) Mental Health Parity Act E) American Recovery and Reinvestment Act

Answer: D Explanation: The Mental Health Parity Act of 1996 (as amended in 2008) sets minimum mental health care benefits; it also prohibits employer group health plans from adopting mental health benefits limitations without comparable limitations on medical and surgical benefits

Which of the following represents the largest proportion of all reported disabilities? A) disabling injuries B) respiratory diseases C) cardiovascular diseases D) mental illness E) cancer

Answer: D Explanation: The World Health Organization estimates that more than 34 million people in the United States between the ages of 18 and 64 suffer from mental illness. Mental illnesses represent about 24% of all reported disabilities, more than disabling injuries, respiratory diseases, cardiovascular diseases, and cancer combined.

Curt works at a computer firm that is experiencing financial difficulties. In an attempt to save money and prevent layoffs, the firm is enforcing a temporary reduction in work hours for Curt's division. Curt now works 35 hours a week instead of 40. Which of the following most likely describes this situation? A) flextime B) telecommuting C) job sharing D) work sharing E) compressed workweek

Answer: D Explanation: Work sharing refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs. Job sharing allows two or more people to share a single full-time job. Flextime is a work schedule in which employees' workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work.

Which of the following provides income and medical benefits to work-related accident victims or their dependents? A) severance pay B) sick leave C) family and medical leave D) workers' compensation E) health insurance benefits

Answer: D Explanation: Workers' compensation laws aim to provide sure, prompt income and medical benefits to work-related accident victims or their dependents, regardless of fault. Severance pay is given to dismissed employees.

Which of the following is LEAST likely to explain the growing percentage of part-time workers? A) economic recession B) phased retirement programs C) desire to balance work and family D) women in the workforce E) minimum wage increases

Answer: E Explanation: About 19 million people work part-time. The recession, more phased retirement, a desire to better balance work and family life, and more women in the workforce help explain this phenomenon. Increases in the minimum wage are less likely to explain the increase of part-time employees.

A plan in which the employer's contribution to employees' retirement savings funds is specified is known as a ________. A) portable plan B) default investment plan C) Social Security pension plan D) defined benefit pension plan E) defined contribution pension plan

Answer: E Explanation: Defined contribution pension plans specify what contribution the employee and/or employer will make to the employee's retirement or savings fund. With defined benefit pension plans, employees know ahead of time the pension benefits they will receive (the benefit is "defined" or specified by amount or formula).

All of the following are typical reasons that employers provide severance pay when downsizing EXCEPT ________. A) reducing litigation chances B) ensuring good public relations C) reassuring remaining employees D) showing respect for dismissed employees E) adhering to federal government requirements

Answer: E Explanation: Employers are not required to provide severance pay. It is a humanitarian gesture and good public relations. It also reduces the chances of litigation from disgruntled former employees and helps reassure employees who stay on after the employer downsizes its workforce.

All of the following are true statements regarding the application of the Family and Medical Leave Act EXCEPT ________. A) employers may require employees to provide advance notice and medical certification B) eligible employees must have worked for the employer for at least one year C) employees must be employed at job sites with at least 50 employees D) up to 12 weeks must be granted in a twelve-month period E) employees may take leave on an intermittent basis

Answer: E Explanation: Employers may require employees to provide advance notice and medical certification. Employees are eligible if they have worked for the employer for at least one year and if the employer has at least 50 workers on site. Up to 12 weeks must be granted, although the time may be taken intermittently.

Who contributes funds for workers' compensation benefits? A) state governments B) federal government C) medical providers D) insurance providers E) employers

Answer: E Explanation: Employers must cary workers' compensation insurance, which is the source of workers' compensation benefits. State and federal governments do not contribute to workers' compensation funds. Medical and insurance providers do not contribute.

Employers must provide employees who have work-related injuries with all of the following EXCEPT ________. A) cash benefits B) medical services C) hospital services D) surgical services E) time off with full pay

Answer: E Explanation: Employers must provide cash benefits and medical, surgical, and hospital services. Time-off with pay is not an aspect of workers' compensation claims.

The primary difference between health maintenance organizations and preferred provider organizations is that ________. A) PPOs are less costly than HMOs B) HMOs are more flexible than PPOs C) HMOs offer mental health services while PPOs do not D) HMOs allow patients to choose from a list of doctors without gatekeeper doctor approval E) PPOs allow patients to choose from a list of doctors without gatekeeper doctor approval

Answer: E Explanation: Unlike HMOs, PPOs let employees select providers (such as doctors) from a relatively wide list, and see them in their offices, often without gatekeeper doctor approval. The providers agree to provide discounts and submit to certain utilization controls, such as on the number of diagnostic tests they can order. Both HMOs and PPOs offer mental health services.