Ch 18
(TRUE or FALSE?) According to the workers' compensation laws, employers pay specified benefits for economic losses (no pain & suffering). Select one: a. TRUE b. FALSE
TRUE
(TRUE or FALSE?) Under schedule rating, insurers can modify the workers' compensation rate for a particular employer within allowable ranges to reflect the underwriter's evaluation of the employer's expected claim costs. Select one: a. FALSE b. TRUE
TRUE
(TRUE or FALSE?) Under workers' compensation laws workers are not prohibited from suing fellow employees for monetary losses not covered by workers' compensation. Select one: a. FALSE b. TRUE
TRUE
(TRUE or FALSE?) Workers' compensation in the United States is governed by state law. Select one: a. TRUE b. FALSE
TRUE
(TRUE or FALSE?) Workers' compensation medical benefits have no deductible or coinsurance. Select one: a. TRUE b. FALSE
TRUE
(TRUE or FALSE?) Under workers' compensation laws workers are prohibited from suing fellow employees for monetary losses. Select one: a. FALSE b. TRUE
false
(TRUE or FALSE?) All states have monopoly state funds that compete with private insurers. Select one: a. FALSE b. TRUE
FALSE
(TRUE or FALSE?) Several states have oligopolistic state funds are government oligopolies that require workers' compensation insurance to be purchased from a federal government insurer. Select one: a. FALSE b. TRUE
FALSE
(TRUE or FALSE?) Workers' compensation (WC) laws imply that an employee must either purchase WC insurance or self-insure herself. Select one: a. TRUE b. FALSE
FALSE
(TRUE or FALSE?) Workers' compensation medical benefits have deductibles and coinsurance. Select one: a. FALSE b. TRUE
FALSE
Which of the following statement is incorrect? Select one: a. Allegations of illegal discrimination based on factors such as age, sex, race, and disability, and allegations of wrongful termination liability exposures cannot be insured with employment practices liability insurance. b. Most of the answers are correct. c. Prior to workers' compensation laws, worker injuries were handled by tort law. d. Permanent total disability is expected to continue until death or retirement age. e. Participation in workers' compensation is compulsory for most types of employment (Texas is an exception).
a. Allegations of illegal discrimination based on factors such as age, sex, race, and disability, and allegations of wrongful termination liability exposures cannot be insured with employment practices liability insurance.
Which of the following statement is incorrect? Select one: a. With the workers' compensation insurance, there are always deductibles or coinsurance payments before receiving the benefits. b. Most of the answers are correct. c. Workers' compensation in the United States is governed by state law. d. Compulsory workers' compensation (WC) laws imply that an employer must either purchase WC insurance or qualify as a self-insurer. e. Three main types of the workers' compensation benefits are medical, lost income (disability), and death (Survivor).
a. With the workers' compensation insurance, there are always deductibles or coinsurance payments before receiving the benefits.
Workers' compensation claim costs increased rapidly during the 1980s. All of the following factors are considered to have contributed to this growth except Select one: a. increases the number of managed medical care facilities b. none of the answers is correct c. increase in claims fraud d. expansion of the types of injuries eligible for compensation e. increases in the cost of medical care
a. increases the number of managed medical care facilities
Which of the following statement is correct? Select one: a. All the answers are incorrect. b. A typical workers' compensation benefit formula for total disability is equal to max(2/3 of wage, state's average wage). c. Workers' compensation laws require that employers only pay specified benefits for economic loss to injured employees if an employee is not at fault or was not negligent. d. With the workers' compensation insurance, none of the states use monopolistic state funds and therefore there is a need for residual market. e. Only a few states have a "second injury fund" that allows insurers and self-insured employers that pay for losses for a worker who has a consequent second injury.
b. A typical workers' compensation benefit formula for total disability is equal to max(2/3 of wage, state's average wage).
Which of the following statement is correct? Select one: a. All the answers are incorrect. b. Americans with Disabilities Act (ADA) makes it illegal to discriminate against qualified workers with disabilities. c. With the workers' compensation insurance in the residual market, none of the states randomly assign employers who cannot obtain coverage in private market to insurers operating in the state, and the private insurers in turn does not form a pooling arrangement using several insurance firms in the residual market and later the cost is shared among all insurers based on the insurer's market share. d. Under workers' compensation laws employees can sue their employers for damages under tort law. Incorrect e. Workers' compensation in the United States is governed by federal law.
b. Americans with Disabilities Act (ADA) makes it illegal to discriminate against qualified workers with disabilities.
Which of the following institutions or acts is not directly related to the workers' compensation insurance? Select one: a. National Council on Compensation Insurance (NCCI) b. Employee Retirement Income Security Act (ERISA) c. Occupational Safety and Health Act (OSHA) d. none of the answers is correct e. American with Disabilities Act (ADA)
b. Employee Retirement Income Security Act (ERISA)
Why do insurers commonly use "experience rating" plans for workers' compensation insurance? Select one: a. because insurers can apply adverse selection to sort out risky employers b. because insurers provides incentive to employers to reduce or prevent accidents within their control c. because insurers use financial ratings of employers to approximate their riskiness d. because insurers can have experience to rate better over time e. none of the answers is correct
b. because insurers provides incentive to employers to reduce or prevent accidents within their control
Aside from liability for worker injury, there are other liability exposures related to the activity of being an employer. Which of the following is not one of these exposures? Select one: a. sexual harassment lawsuit b. negligent marketing lawsuit c. racial discrimination lawsuit d. wrongful termination lawsuit e. none of the answers is correct
b. negligent marketing lawsuit
Under workers' compensation laws, injured workers who are unable to work can typically receive benefits equal to: Select one: a. 100% of the state's average weekly wage b. 100% of their pre-injury wage c. 2/3 of their pre-injury wage, capped at 100% of the state's average wage d. none of the answers is correct e. 3/4 of their pre-injury wage, capped at 100% of the state's average wage
c. 2/3 of their pre-injury wage, capped at 100% of the state's average wage
Which of the following statement is correct? Select one: a. Temporary partial disability is expected to continue until death or retirement age. b. All the answers are incorrect. c. In the U.S., historically workers' compensation issues were covered under (1) Tort liability laws during 1800s, (2) Employer liability laws between 1880 - 1920s, and (3) Workers' compensation laws after 1920s. d. Workers' compensation in the United States is governed by federal law. e. Under schedule rating, insurers cannot modify the workers' compensation rate for a particular employer within allowable ranges.
c. In the U.S., historically workers' compensation issues were covered under (1) Tort liability laws during 1800s, (2) Employer liability laws between 1880 - 1920s, and (3) Workers' compensation laws after 1920s.
Which of the following statement is incorrect? Select one: a. With workers' compensation (WC) insurance, all states mandate that the experience rating should be applied by the insurers for setting the WC premiums for each employer. b. Workers' compensation medical benefits have no deductible or coinsurance. c. Under workers' compensation, permanent total disability is defined as a disability where the injured employee can still work, but his or her earnings capacity is reduced. d. Most of the answers are correct. e. Exclusive remedy under workers' compensation insurance means employees cannot sue employers under tort law but an employee can sue other parties (e.g., product liability suits).
c. Under workers' compensation, permanent total disability is defined as a disability where the injured employee can still work, but his or her earnings capacity is reduced.
The economic rationale for workers' compensation laws must consider the effects workers' compensation laws have on all of the following except: Select one: a. none of the answers is correct b. worker safety c. employee turnover d. administrative costs e. compensation for economic loss to workers and possibly other parties
c. employee turnover
The original rationale for second injury funds was to Select one: a. hold a workers' employer responsible for funding second injury costs b. eliminate second injury lawsuits c. increase employment opportunities for workers who have sustained some type of earlier and permanent injury d. none of the answers is correct e. reduce the incentive of insurers to investigate questionable claims
c. increase employment opportunities for workers who have sustained some type of earlier and permanent injury
Workers' compensation benefits are generally payable for: Select one: a. all of the answers are correct. b. none of the answers is correct c. injuries and occupational diseases that arise out of and during the course of employment. d. any injury that occurs on the way to work. e. all stress related illnesses
c. injuries and occupational diseases that arise out of and during the course of employment.
Which of the following statement is correct? Select one: a. Participation in workers' compensation is voluntary for most types of employment (in Texas, it is compulsory). b. All the answers are incorrect. c. Workers' compensation is voluntary (in Texas, it is compulsory). d. Occupational Safety and Health Act (OSHA) provides safety regulations and inspections in workplaces. e. With the workers' compensation insurance, there are always deductibles or coinsurance payments before receiving the benefits.
d. Occupational Safety and Health Act (OSHA) provides safety regulations and inspections in workplaces.
During 1800s, under the tort liability laws, the U.S. employers had defenses of: Select one: a. none of the answers is correct b. assumption of risk, fellow-servant rule, and comparative negligence c. assumption of risk, contributory negligence, and comparative negligence d. assumption of risk, contributory negligence, and fellow-servant rule e. fellow-servant rule, contributory negligence, and comparative negligence
d. assumption of risk, contributory negligence, and fellow-servant rule
Which of the following statement is correct? Select one: a. Unlike most insurance benefits, workers' compensation disability benefits are not subject to a moral hazard problem. b. In a typical workers' compensation insurance, permanent total disability benefits always continue after the injured worker reach retirement age. c. All the answers are incorrect. d. With the workers' compensation insurance, none of the states use a competitive state fund as a residual market where the state fund is a monopoly. e. Americans with Disabilities Act (ADA) makes it illegal to discriminate against qualified workers with disabilities.
e. Americans with Disabilities Act (ADA) makes it illegal to discriminate against qualified workers with disabilities.
Which of the following statement is incorrect? Select one: a. With the workers' compensation insurance in the residual market, some states randomly assign employers who cannot obtain coverage in private market to insurers operating in the state, and the private insurers in turn form a pooling arrangement using several insurance firms in the residual market and later the cost is shared among all insurers based on the insurer's market share. b. If an employer cannot find coverage for workers' compensation in the voluntary market can obtain coverage in the residual market. c. Most of the answers are correct. d. Under schedule rating, insurers can modify the workers' compensation rate for a particular employer within allowable ranges to reflect the underwriter's evaluation of the employer's expected claim costs. e. Exclusive remedy under workers' compensation insurance means employees can sue employers under tort law.
e. Exclusive remedy under workers' compensation insurance means employees can sue employers under tort law.
Which of the following statement is incorrect? Select one: a. Like most insurance benefits, workers' compensation disability benefits are subject to a moral hazard problem. b. Most of the answers are correct. c. In the U.S., historically workers' compensation issues were covered under (1) Tort liability laws during 1800s, (2) Employer liability laws between 1880 - 1920s, and (3) Workers' compensation laws after 1920s. d. In general, only large employers can satisfy the requirements of the workers' compensation self-insurance option but most of the self-insurers, in case, purchase excess coverage. e. Workers' compensation insurance does not pay for: (1) a flat amount of payment for burial costs, and (2) workers' compensation benefits to surviving spouses and eligible children.
e. Workers' compensation insurance does not pay for: (1) a flat amount of payment for burial costs, and (2) workers' compensation benefits to surviving spouses and eligible children.
Which of the following is not one of the main types of workers' compensation benefits? Select one: a. death benefits b. payment of medical expenses c. payment for lost income associated with permanent or partial disability d. none of the answers is correct e. pain and suffering
e. pain and suffering
