Ch. 14

Under the Patient Protection and Affordable Care Act, organizations that have at least 50 full-time employees (or an equivalent number of full- and part-time employees) must offer health care coverage or pay a penalty. In 2020 the penalty amounted to ______.

$2,570 annually for every full-time employee after the first 30

According to federal law, employees are entitled to _____ weeks of unpaid family leave.

12

On average, out of every dollar spent on employee compensation, how much of it goes to benefits?

30 cents

Under COBRA, how long must employers allow employees to retain their health care insurance after a "qualifying event"?

36 months

The Age Discrimination in Employment Act (ADEA) outlawed employment practices that discriminate against people over the age of ______.

40

Carlo's employer allows him to deposit a portion of his pay into a savings plan that is tax deferred. He will use this money to help send his son to college. Carlo is using a _____ savings plan.

529

Short-term disability provides benefits for what time period?

6 months or less

Cafeteria-Style Plan

A benefits plan that offers employees a set of alternatives from which they can choose the types and amounts of benefits they want.

Unemployment Insurance

A federally mandated program to minimize the hardships of unemployment through payments to unemployed workers, help in finding new jobs, and incentives to stabilize employment.

Employee Wellness Program (EWP)

A set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks.

Employee Benefits

Compensation in forms other than cash.

After a layoff or other "qualifying event," employers are required to allow employees to extend their health care coverage at group rates for as long as three years. The legislation that mandates this coverage is the _____.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Which person would be eligible for unemployment benefits?

Drake was laid-off from his job and is actively seeking work.

What acronym refers to a set of communications, activities, and facilities designed to change health-related behaviors in ways that reduce health risks?

EWP

Flexible Spending Account

Employee-controlled pretax earnings set aside to pay for certain eligible expenses, such as health care expenses, during the same year.

Why do organizations now pay a growing share of compensation in the form of benefits?

Employers can often get a better deal on programs than the individual employee. Employees are not taxed on most benefits but are on cash compensation. Employers are required by law to pay certain benefits.

How are workers' compensation benefits typically funded?

Employers purchase coverage from insurance companies.

True or false: Most tuition reimbursement programs will cover tuition for any type of college- or graduate-level course.

False

True or false: Spousal benefits only apply to a spouse of the opposite sex.

False

Which of the following is the most flexible approach to paid time off?

Give employees a bank of paid time off.

What steps would help an organization choose which benefits to offer employees?

Monitor the benefits to determine if they are achieving the objectives. Ask employees how much they care about each benefit. Write down what the organization wants the benefits package to accomplish.

What is a characteristic of a accountable care organization?

Providers agree to get paid based on results.

Summary Plan Description

Report that describes a pension plan's funding, eligibility requirements, risks, and other details.

Noncontributory Plan

Retirement plan funded entirely by contributions from the employer.

True or false: Because of the way income is taxed, benefits can be more favorable to employees than cash compensation.

True

In which type of retirement plan does an employee's account earn a predetermined interest rate?

a cash balance plan

A defined-benefit retirement plan guarantees:

a specific level of retirement income.

Which refers to a network of health care providers that practice value-based care and they agree to be paid based on results?

accountable care organization

FASB standards affect the __________ department of a company.

accounting

Dan enjoys the employee wellness program at his office because there is a certified trainer on site at the fitness center who tailors his exercise program to his needs. What type of employee wellness program does Dan's company provide?

active

An employee with a preferred provider organization (PPO) health care plan would pay a smaller share of the cost of health services when using _____ health care provider.

an in-network

Paid vacation time and health insurance are both types of employee _____.

benefits

A plan that allows employees to choose what they want from a list of available benefits is called a _____ plan.

cafeteria-style

What three elements are associated with a consumer-driven health plan?

can carry over unused amount medical savings account high deductible

Which type of plan consists of individual accounts where all contributions come from the employer?

cash balance

A 529 savings plan is used for _____.

college savings

The government raises Social Security payments each year to adjust for inflation in the _____.

consumer price index

A typical objective most companies use when selecting employee benefits is _____.

controlling health care costs

A ______ sets up an individual account for each employee and specifies the size of the investment into that account, rather than the amount to be paid out upon retirement.

defined-contribution plan

Under some circumstances, an adult who is not a relative or spouse, is financially interdependent, and lives permanently with another adult can be legally defined as a _____ partner

domestic

After retiring, workers are paid Social Security benefits according to their age and _____.

earnings history

When employees receive compensation that is not cash, the compensation is referred to as _____.

employee benefits

Workers' compensation is funded by ______.

employers

If Kenneth wants to benefit from his company health insurance, he is allowed to visit only doctors who are in the company's network of providers. This type of coverage is known as a _____.

health maintenance organization

Employers can obtain competitive information about other employers' benefit packages through which of the following?

hiring private consultants the Bureau of Labor Statistics

How is Social Security funded?

jointly, by employers and employees

Vesting rights are based on an employee's _____.

length of service

Benefits that are classified as _____ plans offer various tax advantages.

qualified

A summary plan description must be provided to an employee within _____ days.

90

Preferred Provider Organization (PPO)

A health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers.

Health Maintenance Organization (HMO)

A health care plan that requires patients to receive their medical care from the HMO's health care professionals, who are often paid a flat salary, and provides all services on a prepaid basis.

True or false: Defined-contribution plans are more risky for the employer.

False

Which federal law requires employers with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption?

Family and Medical Leave Act

Pension Benefit Guarantee Corporation (PBGC)

Federal agency that insures retirement benefits and guarantees retirees a basic benefit if the employer experiences financial difficulties.

Family and Medical Leave Act (FMLA)

Federal law requiring organizations with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption; to care for a seriously ill family member or for an employee's own serious illness; or to take care of urgent needs that arise when a spouse, child, or parent in the National Guard or Reserve is called to active duty.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law that requires employers to permit employees or their dependents to extend their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff, reduction in hours, or the employee's death.

High-deductible Health Plans (HDHPs)

Health care plans that provide incentives for employees to make decisions that help lower health care costs.

Patient Protection and Affordable Care Act

Health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit.

What is the purpose of a summary plan description?

It describes a pension plan's funding, eligibility requirements, and risks.

Which of the following is not a workers' compensation benefit?

Paid vacation days

Defined-Benefit Plan

Pension plan that guarantees a specified level of retirement income.

Which type of health care plan contracts with health care professionals to offer services at lower rates?

Preferred provider organization (PPO)

Defined-Contribution Plan

Retirement plan in which the employer sets up an individual account for each employee and specifies the size of the investment into that account.

Who bears the risk in a defined contribution pension plan?

The employee

Social Security benefits may be reduced if a worker is earning wages above a maximum dollar figure known as the _____.

exempt amount

The amount of unemployment tax paid by each employer is calculated according to the employer's _____.

experience rating

Consumer-driven health plans (CDHPs) aim to lower the cost of health coverage by:

featuring high deductibles and medical savings accounts. educating employees about health topics so they will be healthier and need less health care. involving patients in health care decisions.

If a beneficiary earns more than the exempt amount, that person's benefit pay is ______.

reduced

The benefits available to domestic partners do not have the same _____ as those received by spouses.

tax advantages

What is an advantage of a qualified plan in retirement benefits?

tax-free earnings on the money in the retirement fund

Employees value benefits because they expect that benefits ______.

will help them remain financially secure

State programs that provide benefits to workers who suffer work-related injuries or sickness are called _____ laws.

workers' compensation

Which federal law makes it illegal to discriminate against those over 40 because of their age?

Age Discrimination in Employment Act

Employee Retirement Income Security Act (ERISA)

Federal law that increased the responsibility of pension plan trustees to protect retirees, established certain rights related to vesting and portability, and created the Pension Benefit Guarantee Corporation.

In terms of child care benefits, which requires the least amount of involvement by the organization?

Give employees information about the cost and quality of available child care.

Vesting Rights

Guarantee that when employees become participants in a pension plan and work a specified number of years, they will receive a pension at retirement age, regardless of whether they remained with the employer.

Why should employers tell their workers the details about what is included in their benefits packages?

Health insurance and retirement plans are complex and difficult for most employees to fully understand. Employees often fail to understand the value of their benefits. Highly desirable employees will be more apt to work for a company that offers valuable benefits that are easy to understand.

Long-Term Disability Insurance

Insurance that pays a percentage of a disabled employee's salary after an initial period and potentially for the rest of the employee's life.

Short-Term Disability Insurance

Insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less.

What federal legislation includes incentives and penalties to encourage organizations to provide health insurance for their employees?

Patient Protection and Affordable Care Act

Which statements characterize a health maintenance organization (HMO)?

Patients are allowed to see only medical personnel who are affiliated with the HMO. Physicians work on salary instead of being paid a fee for each service. The patient pays nothing at the time of service, because premiums cover all visits and procedures in advance.

Which act requires that employers treat pregnancy as it would any other disability?

Pregnancy Discrimination Act

Cash Balance Plan

Retirement plan in which the employer sets up an individual account for each employee and contributes a percentage of the employee's salary; the account earns interest at a predefined rate.

Unemployment insurance was established as a result of the ______.

Social Security Act

Workers' Compensation

State programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors.

Social Security

The federal Old Age, Survivors, Disability, and Health Insurance (OASDHI) program, which combines old age (retirement) insurance, survivor's insurance, disability insurance, hospital insurance (Medicare Part A), and medical insurance (Medicare Part B) for older individuals.

Experience Rating

The number of employees a company has laid off in the past and the cost of providing them with unemployment benefits.

In the United States the amount of sick leave given to employees is often based on the Blank______.

employee's length of service

Cafeteria-style fringe benefit plans are attractive to many firms because ______.

employees are able to choose benefits that meet their own needs they provide a known dollar amount to employees toward whichever benefits the employee chooses they are more equitable

When considering employee benefits, it has been found that

employees have a hard time understanding the cost and value of their benefits.

Company pensions are designed to encourage Blank______.

employees to work for a company for a long time

If the money in a flexible spending account is not spent within the year, the money goes to the _____.

employer

After his son was born, John took three weeks of unpaid leave from his company. He returned to his regular full-paying job after the three weeks. Which type of family-friendly benefit did John use?

family leave

Which U.S. employees do not receive Social Security benefits?

federal workers railroad workers state workers

Isaac is able to set aside $2,500 tax free each year out of his earnings to pay for eligible medical expenses. This is an example of a _____ account.

flexible spending

Jeremy's company gave everyone a paid holiday on the Friday before Labor Day so they could have a long weekend. This type of additional paid holiday is called a _____ holiday.

floating

Which benefits are provided to more than 70% of full-time employees?

health insurance

What type of insurance pays a percentage of a disabled employee's salary after an initial period and potentially for the rest of the employee's life?

long-term disability insurance

A _____ care program attempts to reduce the number of unnecessary medical procedures by involving the insurer in decisions about health care.

managed

Krystle sometimes feels frustrated with the medical insurance her company provides. Before a hospital admission, she has to contact the insurer. If representatives of the company believe the hospital stay is not necessary, they might suggest she use home health care. Krystle's company gives the insurer a role in health care. What type of health care does this demonstrate?

managed care

To be classified as a qualified plan for tax purposes, a pension plan _____.

must be available for lower-level employees, not only the owners and top managers

What is the legal minimum of paid days off required for employees of U.S. companies?

no minimum

Retirement plans funded entirely by the employer are referred to as _____.

noncontributory plans

The highest level of child care benefits from an employer occur when the employer provides _____.

on-site child care

A(n) _____ employee wellness program would provide health education and fitness facilities but no formal support to use the program.

passive

Which strategy can be legally adopted by organizations looking to restructure the workforce to minimize the expense of benefits?

paying existing workers overtime instead of adding employees

Social Security is funded through ______.

payroll taxes on employees and employers

An employer sets up a _____ fund to invest the contributions to a defined-benefit plan.

pension

Which of the following are types of defined-contribution plans?

profit-sharing plan employee stock ownership plan money purchase plan

A report that describes a pension plan's funding, eligibility requirements, risks, and other details is called a(n) ______.

summary plan description

What elements are part of the OASDHI program, otherwise known as Social Security?

survivor's insurance medical insurance hospital insurance

A good source for free, credible cost information about competitors' benefits packages is ______.

the Bureau of Labor Statistics

An employer's experience rating is a measurement used to determine ______.

the size of the unemployment insurance tax an employer must pay

Which of the following are conditions for an unemployed worker to be eligible for benefits under unemployment insurance?

to be currently looking for work to have worked for a specific amount of time at a job to be ready to work

What are some of the goals of unemployment insurance?

to help unemployed workers secure new work to financially support unemployed workers during unemployment to encourage employers to retain employees and not lay them off

Why does the government offer two types of vesting schedules for employers and their pension plans?

to prevent companies from firing employees before they are fully vested in the pension plan

Some companies provide _____ reimbursement programs to encourage employees to take classes to improve knowledge and skills related to their career.

tuition

Companies should explain their benefits packages to employees so they will _____.

understand what their benefits are worth

The Family and Medical Leave Act (FMLA) provides ______.

up to 12 weeks of leave for serious illness

Workers whose contributions are ___ have satisfied the requirements to be paid a pension when they retire, even if they did not remain with the employer until that time.

vested

Which of the following is not typically covered as part of basic medical insurance coverage?

vision care