Compensation Administration - Chapter 12

Trumbrella Corp. is a pharmaceutical company. One of its employees reports that he has suffered an on-the-job injury caused by the slippery factory floor that resulted in severe damage to his backbone. When Trumbrella initiates its claims processing, it should first: A) determine whether the accident actually happened. B) determine if the employee is eligible for any benefit. C) calculate the payment required to be paid to the employee. D) contact the insurance companies to enquire about the possibility of a joint payment.

A) determine whether the accident actually happened.

The first issue in setting up a benefits package is: A) finding out who should be protected or benefited. B) figuring out how much choice should employees have among benefits. C) determining how benefits should be financed. D) choosing legally defensible benefits.

A) finding out who should be protected or benefited.

In the context of cost containment, which of the following best describes the practice of "copay"? A) Controlling costs through policies such as seeking competitive bids for program delivery B) Requiring that employees pay a fixed or percentage amount for coverage C) Negotiating the lowest possible fees by providers D) Limiting disability income payments to some maximum percentage of income

B) Requiring that employees pay a fixed or percentage amount for coverage

Which of the following benefits is NOT mandated by either the state or federal government? A) Workers' compensation B) Work/life balance C) Social security D) Unemployment insurance

B) Work/life balance

________ allows employees who resign or are laid off through no fault of their own to continue receiving health coverage under their employer's plan at a cost borne by the employee. A) The Maintenance Act (1973) B) The Fair Labor Standards Act (1938) C) The Tax reforms of 1982 D) The Consolidated Omnibus Budget Reconciliation Act (1984)

D) The Consolidated Omnibus Budget Reconciliation Act (1984)

Which of the following requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship? A) The Maintenance Act (1973) B) The Fair Labor Standards Act (1938) C) The Consolidated Omnibus Budget Reconciliation Act (1984) D) The Patient Protection and Affordable Care Act (2010)

D) The Patient Protection and Affordable Care Act (2010)

If a benefit forecast suggests future cost containment may be difficult, the benefit should: A) be completely paid for by employees. B) be offered on a noncontributory basis. C) not be used. D) be offered to employees only on a cost-sharing basis.

D) be offered to employees only on a cost-sharing basis.

Various studies have found that only two specific benefits curtailed employee turnover, namely ________ and ________. A) vacation days; dental plans B) profit-sharing plans; life insurance C) retirement benefits; paid vacations D) pensions; medical coverage

D) pensions; medical coverage

The ________ requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship. A) Patient Protection and Affordable Care Act B) Family Medical Leave Act C) Maintenance Act D) Consolidated Omnibus Budget Reconciliation Act

A) Patient Protection and Affordable Care Act

One of the most preferred benefits is A) stock plans. B) profit sharing. C) shorter working hours. D) early retirement.

A) stock plans.

The most widely used benefit survey is conducted by: A) the U.S. Chamber of Commerce. B) Watson Wyatt. C) the Society for Human Resource Management. D) the American Compensation Association.

A) the U.S. Chamber of Commerce.

In an attempt to reduce the employee benefits cost to the company, GrindStop Corp. restricts the number of visits to the dentists covered in the dental plan to two per year for each employee. Which of the following cost-containment strategies is being used by GrindStop? A) Copay B) Benefit limitations C) Administrative cost containment D) Wellness programs

B) Benefit limitations

The typical employee can recall ________ percent of the benefits he or she receives. A) almost 50 B) less than 15 C) over 30 D) 40

B) less than 15

How many weeks of leave does the Family Medical Leave Act (1993) mandate for all workers at companies that employ 50 or more people? A) 4 weeks B) 8 weeks C) 12 weeks D) 16 weeks

C) 12 weeks

DrenchFort Corp. is a small company that pays high wages. As its wages are high, it does not provide any benefits. Recently, it has noticed that its employee turnover has increased, so it decides to provide benefits to retain employees. Which of the following benefits is most likely to reduce turnover? A) Counseling services B) An early retirement plan C) Medical coverage D) A profit-sharing plan

C) Medical coverage

Which of the following is NOT a disadvantage of flexible benefit programs? A) Administrative burdens and expenses increase. B) Adverse selection of benefits by employees results in increase in costs. C) New benefits are highly difficult to introduce. D) Flexible benefits are subject to nondiscrimination requirements in Section 125 of the Internal Revenue Code.

C) New benefits are highly difficult to introduce.

Which of the following is an advantage of flexible benefit plans? A) They require no expenditure from the employers. B) They decrease the administrative burdens of employers. C) They ensure that employees pick only those benefits that they will use, thereby reducing costs. D) They increase the involvement of employees in choosing benefit plans.

D) They increase the involvement of employees in choosing benefit plans.

All of the following are advantages of flexible benefits EXCEPT: A) containment of benefit costs. B) increased understanding of benefits by employees. C) reduced expense of introducing new benefits. D) decreased administrative expenses.

D) decreased administrative expenses.

Surveys show that the most highly valued employee benefit is: A) dental coverage. B) life insurance. C) paid vacation and holidays. D) medical insurance.

D) medical insurance.

The biggest cost-containment strategy in recent years is the movement to: A) benefit limitations. B) HMOs. C) outsourcing. D) high deductibles

C) outsourcing.

A benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called a ________ plan. A) select choice B) no-deductible C) flexible benefit D) flat dollar benefit

C) flexible benefit

All of the following factors are reasons for the growth of benefits EXCEPT: A) foreign lawsuits. B) unions. C) cost effectiveness of benefits. D) government impetus.

A) foreign lawsuits.

A survey shows that most employers are responding to increased benefit costs by A) requiring employees to pay higher deductibles and copays. B) laying off employees. C) dropping health care plans. D) relying on the Patient Protection and Affordable Care Act

A) requiring employees to pay higher deductibles and copays.

Which of the following companies uses probationary periods as a cost-containment measure? A) Alpha Corp., which combines the benefits offered for couples who work within the organization B) DLG Corp., which excludes its new recruits from benefit coverage until they complete a year C) Kimberly Corp., which requires employees in the lowest salary quartile to pay for 20 percent of their benefits D) Amethyst Corp., which limits its employees to coverage for only two dentist visits every six months

B) DLG Corp., which excludes its new recruits from benefit coverage until they complete a year

Which of the following statements is true of employee benefits? A) Employers can substitute insurance benefits for job security. B) Group insurance has relatively easy qualification standards. C) Most employee benefits are taxable. D) Many group-based benefits are obtained at a higher rate than could be obtained by employees acting on their own.

B) Group insurance has relatively easy qualification standards.

Limiting the liability for an employee's extended hospital stay costs to $200,000 is a cost-containment measure known as: A) dual coverage. B) benefit ceiling. C) coinsurance. D) deductible.

B) benefit ceiling.