Management 461 Ch. 12

_____ allows employees who have resigned or have been 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. Health Maintenance Act (1973) FLSA (1938) The tax reform of 1982 COBRA (1984)

COBRA (1984)

According to available evidence, companies can successfully remain nonunion by offering the same benefits as those provided by unionized firms.

False

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

Group insurance benefits has relatively easy qualification standards

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

New benefits are more difficult to introduce

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

Patient Protection and Affordable Care Act

No strong data exist linking benefits level and employee productivity.

True

Which of the following benefits is NOT mandated by state or federal legislation? Workers' compensation Work/life balance Social security Unemployment insurance

Work/life balance

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

a flexible benefit

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

be offered to employees only on a cost-sharing basis

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

decreased administrative expenses

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

finding out who should be protected or benefited

The typical employee can recall _____ percent of the benefits he or she receives. almost 50 less than 15 over 30 40

less than 15

Surveys show that the most highly valued benefit is: dental coverage. life insurance. paid vacation and holidays. medical insurance.

medical insurance

The biggest cost-containment strategy in recent years is the movement to: benefit limitations. HMOs. outsourcing. higher deductibles.

outsourcing

All of the following are cost-containment practices designed to reduce benefit costs EXCEPT: probationary periods. provision of skills development training. copay. seeking competitive bids for benefit delivery.

provision of skills development training

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

requiring employees to pay higher deductibles and copays

One of the most preferred benefits is _____. stock plans profit sharing shorter working hours early retirement

stock plans

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

the U.S. Chamber of Commerce

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

12 weeks

In 1959, benefits were approximately _____ percent of payroll and in 2010 it was approximately _____ percent of payroll. 30; 50 20; 38 25; 30 30; 60

25; 30

_____ is the most frequently used medium for communicating employee benefits. A notice board A seminar An employee benefit handbook A meeting with the chief executive officer

An employment benefit handbook

Which of the following is NOT part of the cost-centered approach for deciding to provide a benefit? Checking compliance Evaluating competitiveness of current benefits Examining employee preferences Basing benefits on historical costs

Bashing benefits on historical costs

As part of the efforts to bring down 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. Which of the following cost-containment strategies is used by GrindStop? Copay Benefit limitation Administrative cost containment Wellness program

Benefit limitation

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

DLG Corp. excludes its new recruits from benefit coverage until they complete a year

Today, benefits make up about 25 percent of payroll costs.

False

_____ are NOT used for determining employee benefit preferences. Demographic data Product market share data Employee surveys Cafeteria-style plans

Product market share data

Which of the following is an advantage of flexible benefit plans? They require no expenditure from the employers. They decrease the administrative burdens for employers. They decrease the costs as employees pick only those benefits they will use resulting in the subsequent high benefit utilization. They increase the involvement of employees in choosing benefit plans.

They increase the involvement of employees in choosing benefit plans

The only two benefits shown to reduce turnover are pensions and medical coverage.

True

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

foreign lawsuits

Various studies have found that only two specific benefits curtailed employee turnover: _____ and _____. vacation days; dental plans profit-sharing plans; life insurance retirement benefits; paid vacations pensions; medical coverage

pensions; medical coverage

All employee benefits provided by employers are taxable.

False

Employees' preferences of various benefits can be predicted accurately from demographic data.

False

Employers prefer the noncontributory approach to financing benefits because this allows greater control of costs.

False

Flexible benefit plans eliminate the involvement of employees.

False

Pension costs are of no concern to employers as the government handles the pension costs.

False

The Employment Retirement Income Security Act (1974) requires employers to offer some form of pension.

False

The Family Medical Leave Act of 1993 mandates 20 weeks of leave for all workers at companies that employ 10 or more people.

False

The favorable tax status granted to many benefits is safe from the threat of recurrent tax reform proposals.

False

A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.

True

Benefits can be an effective tool to attract and retain employees when the benefits address the needs of a target group.

True

By limiting liability for an employee's hospital stay costs to $200,000, an employer is using a cost-containment measure known as: dual coverage. benefit ceiling. coinsurance. deductible.

benefit ceiling

Trumbrella Corp. is a pharmaceuticals company. One of its employees reports that he had an on-the-job injury caused by slippery factory floor that broke his back. When Trumbrella initiates its claims processing, it should first: determine whether the accident happened. determine if the employee is eligible for any benefit. calculate the payment required to be paid to the employee. contact the insurance companies to enquire about the possibility of a joint payment.

determine whether the accident happened

A recent survey shows employees ranking employee benefits _____ in explaining job satisfaction. first second third last

second

Employees prefer using their company's intranet for accessing their benefits information as they do not need to complete lengthy paperwork.

True

One of the best strategies for determining external equity is to conduct a benefit survey.

True

If the future cost containment of a benefit may be a problem, the benefit should be offered on a noncontributory basis.

False

A major reason for the proliferating cost of benefit programs is the narrow focus of benefit administrators.

True

Cost pressure related to increasing diversity of the workforce is one of the reasons companies are offering flexible benefit plans.

True