HRM Chapter 13—Managing Employee Benefits
Why do workers who do not have health insurance cause the health insurance rates to rise for employers who provide insurance for their workers? a. Health care providers pass the cost of serving uninsured people on to employers in the form of higher prices for their services. b. Health care costs for uninsured patients are pro-rated among insurance companies operating in the state based on the number of individuals the companies insure, thus increasing insurance companies costs. c. Workers who do not have health insurance do not receive basic health care, making them sicker. When they eventually get jobs with insurance, they have very high usage of medical services for which their insurance pays. d. Workers without health insurance tend to contract contagious illnesses, including drug-resistant tuberculosis. Consequently, insured workers and their families, who would otherwise remain healthy, catch these illnesses and require more medical care.
a. Health care providers pass the cost of serving uninsured people on to employers in the form of higher prices for their services.
Megatherium Industries had a generous defined-benefit pension plan for retirees for the last 50 years. Now, because of declines in the stock market, the investments in the pension plan are not generating enough revenue to fund the plan. Which of the following statement is TRUE? a. Megatherium will probably have to make up the shortfall in the pension fund. b. Megatherium must decrease the amount of pension payments to retirees to the level that is financially-sound based on the amount of money in the pension fund. c. The federal government will step in and make up the shortfall as long as there has been no malfeasance on the part of the company. d. Megatherium can suspend pension payments until the pension fund has recovered.
a. Megatherium will probably have to make up the shortfall in the pension fund.
____ refers to a feature that allows employees to move their pension benefits from one employer to another. a. Portability b. Mobility c. Vesting d. Transferability
a. Portability
Gertie is an HR consultant who has been hired to advise a medium-sized company on how to use HR technology to make benefits administration less expensive. Gertie is amazed to find that the company's present HR system is entirely pencil-and-paper. In Gertie's discussions with the HR manager, she indicates that the greatest increase in use of technology by other companies is in a. Web-based benefits enrollment. b. conducting employee surveys. c. monitoring usage of health benefits. d. calculating and monitoring paid-time-off.
a. Web-based benefits enrollment.
As the director of compensation for a multi-location retailer, Jeff is reviewing the design of his company's benefits. He must answer all of the following questions EXCEPT a. Which of the mandatory benefits can be dropped with the least negative impact on employee attitudes? b. How much total compensation should be offered to employees? c. What is the firm receiving in return for each benefit provided? d. How flexible should the package of benefits be?
a. Which of the mandatory benefits can be dropped with the least negative impact on employee attitudes?
Which of the following individuals would NOT receive benefits from the Social Security system? a. a 47-year-old person who has become unemployed through no fault of his/her own. b. a 25 year-old person who was in a car accident and is now paralyzed and unable to hold a job. c. the 70-year-old widower of a woman who was a dentist for 30 years. d. a physical therapist who has stopped working at the age of 69.
a. a 47-year-old person who has become unemployed through no fault of his/her own.
Clarice wants to invest in a retirement plan that will allow her to pay the tax on her contributions in the current year. This will reduce the gains that will be taxed when she withdraws the funds when she retires. Clarice should invest in a. a Roth IRA. b. a defined-benefits plan. c. a 403(b). d. a tax-deferred annuity.
a. a Roth IRA.
Wanda has medical insurance through her employer. Whenever she visits the physical therapist for a knee injury, she is charged $25. Her employer's insurance covers the rest of the $150 fee. This is an example of a. a co-payment. b. first-dollar coverage. c. managed care. d. an HMO.
a. a co-payment.
A 401(k) plan is an agreement in which a. a percentage of an employee's pay is withheld and invested in a tax-deferred account. b. an employee can pre-pay taxes on future pension income. c. individualized pension plans are established for self-employed people. d. the benefits of the pension plan are guaranteed by the government.
a. a percentage of an employee's pay is withheld and invested in a tax-deferred account.
The Family and Medical Leave Act requires that eligible employees be permitted to take leave for each of the following except: a. caring for a brother or sister with a serious health condition. b. adoption of a child. c. caring for a parent with a serious health condition. d. serious health condition of the employee.
a. caring for a brother or sister with a serious health condition.
A system in which the employer makes contributions to each employee and the employee decides how to use this to cover his/her health-related expenses is called a/an ____ plan. a. consumer-driven health b. contributory health insurance c. self-directed health d. individual HMO
a. consumer-driven health
All of the following are requirements of the Employee Retirement Income Security Act (ERISA) EXCEPT a. employers may offer retirement plans to certain classes of employees as a tool to aid retention of top-performing employees. b. pension plans must meet minimum funding requirements. c. employers must pay termination insurance to ensure employee pensions will be there even if the company goes out of business. d. accrued benefits in the pension plan must be given to employees when they retire or leave.
a. employers may offer retirement plans to certain classes of employees as a tool to aid retention of top-performing employees.
A plan that allows employees to contribute pre-tax dollars to buy additional benefits is called a a. flexible spending account. b. health reimbursement arrangement. c. tax-deferred benefit option. d. cafeteria-style plan.
a. flexible spending account.
Which of the following benefits are NOT mandated by federal legislation? a. health insurance b. unemployment compensation insurance c. continuation of health insurance after layoff d. workers' compensation insurance
a. health insurance
Claudia has become vested in her pension plan. This means that a. if Claudia is laid off, she will receive not only the amount of money she has paid into her pension plan but also the funds that her employer contributed. b. if Claudia leaves this employer and takes an opportunity with another company, she can transfer her pension fund balances to that new employer's plan. c. if Claudia remains with her present employer until retirement, she will receive the maximum amount of pension available under the plan. d. Claudia can take the funds she and her employer have invested in the pension plan and move them to a 401(k) or an IRA.
a. if Claudia is laid off, she will receive not only the amount of money she has paid into her pension plan but also the funds that her employer contributed.
Common ways that benefits can impact organizational performance include all of the following EXCEPT a. minimizing grievances and complaints. b. reducing turnover. c. increasing employee job satisfaction d. improving recruiting success.
a. minimizing grievances and complaints.
Which of the following is NOT a typical offering of a company child-care benefit? a. providing paid family leave. b. sick-child programs jointly offered with hospitals c. after-school programs, jointly offered with a school system d. subsidized day care
a. providing paid family leave.
A typical abuse-control measure to keep employees from taking excessive time off around holidays is to a. require employees to work the first and last scheduled workdays around the holiday. b. allow only employees with significant seniority (e.g., five years) to combine holidays with vacation days to extend the employees' time off. c. pay employees time-and-a-half for working the days immediately following and preceding a holiday. d. allow employees to "bank" holidays and take the days off at less busy times of year.
a. require employees to work the first and last scheduled workdays around the holiday.
The Pension Protection Act of 2006 a. requires employers to increase funding to cover unfunded liabilities. b. mandates that retirees cannot be discriminated against on the basis of previous union membership. c. allows employers to "cash out" faltering pension plans, by making one-time cash payments to retirees who can then invest the funds as individuals. d. requires employers with excessive unfunded pension liabilities to give control of the pension fund to the Department of Labor.
a. requires employers to increase funding to cover unfunded liabilities.
During long-lasting economic declines, a. state unemployment compensation funds often become exhausted. b. the number of weeks of unemployment offered to out-of-work individuals has to be cut to conserve the funds. c. employers are often forced to stop their contributions to unemployment compensation funds because of financial losses. d. the weekly payments to each individual recipient are reduced.
a. state unemployment compensation funds often become exhausted.
To be eligible for workers' compensation, the worker must a. suffer a work-related injury or illness. b. have purchased workers' compensation insurance. c. not be totally or partially responsible for the accident or injury. d. prove that the accident was caused by employer negligence.
a. suffer a work-related injury or illness.
To prevent employees from making inappropriate benefits choices in a flexible benefits plan it is recommended that a. the employees be required to select a core set of benefits. b. the HR department counsel employees in wise benefit selection. c. benefit flexibility be tied to employee seniority. d. hourly employees not be offered flexible benefits.
a. the employees be required to select a core set of benefits.
A long-time assembly line worker, Ed, and his wife have divorced. Under COBRA rules, who must HR notify of their opportunities for extended health benefits? a. only Ed's wife b. Ed's wife and Ed's dependent children c. Ed's wife, his dependent children, and Ed's dependent elderly parents d. No one, since this is a divorce and not Ed's death.
b. Ed's wife and Ed's dependent children
Which of the following statements is TRUE? a. Anti-discrimination laws require that part-time employees must receive benefits if the company offers full-time employees benefits. b. Employers are required to provide part-time employees government-mandated benefits, but other benefits are voluntary for the employer. c. Part-time employees are typically not interested in benefits because they are usually covered by a spouse's or parents' insurance policies. d. Most employers provide part-time employees pro-rated medical benefits, but no time-off benefits because these employees already work a reduced schedule.
b. Employers are required to provide part-time employees government-mandated benefits, but other benefits are voluntary for the employer.
Charlene, the director of compensation, wishes to estimate the administrative costs of the current benefits program, so that she can use that as a basis for evaluating alternative administrative methods. One of the most useful calculations Charlene can make is a. HR compensation and benefits staff salaries divided by total expenditures on benefits. b. HR staff time spent on benefit issues multiplied by their pay and benefits costs per hour. c. the multiyear pattern of benefits as a percentage of payroll. d. benefits costs by employee group.
b. HR staff time spent on benefit issues multiplied by their pay and benefits costs per hour.
What is the principle requirement of the Worker Adjustment and Retraining Notification Act (WARN) of 1988? a. Employers must give severance pay to workers who permanently lose their jobs. b. Most employers must give 60 days' notice if a mass layoff or facility closing is to occur. c. Workers must be given the opportunity to relocate if the company is moving the plant. d. Workers under age 50 are entitled to a retraining allowance if their jobs are eliminated.
b. Most employers must give 60 days' notice if a mass layoff or facility closing is to occur.
What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to health care? a. Employers with more than 50 employees must provide medical insurance for all full-time employees. b. Most employers with 20 or more employees must offer extended health-care coverage to employees after they leave the organization. c. Employees on COBRA pay 2% more for health insurance than they paid before going on the COBRA plan. d. Employers offering medical insurance cannot exclude pre-existing conditions from coverage.
b. Most employers with 20 or more employees must offer extended health-care coverage to employees after they leave the organization.
Mark has four children under the age of 15. His wife has had a serious health problem that will keep her from working for the next few years. Mark's employer, Megatherium Industries, has moved to a new health insurance plan which involves Megatherium making contributions to an account to which Mark can also make pre-tax contributions. Mark can spend the money in this account on health insurance. The insurance has an $11,600 deductible for Mark's family, so he will be out of pocket over $11,000 before his health insurance coverage starts paying for his family's care. Mark's annual pre-tax salary is $80,000. Which of the following statements is TRUE? a. This plan is illegal under federal laws requiring family health insurance be no more than 10% of the employee's annual salary. b. This is a typical Health Savings Account which is an effective way for Megatherium to reduce its overall health insurance expenditures. c. This is a flexible spending account under Section 125 of the Internal Revenue Code.. d. Megatherium is using an HMO.
b. This is a typical Health Savings Account which is an effective way for Megatherium to reduce its overall health insurance expenditures.
When promoting family-friendly benefits to top management, the director of HR's most accurate argument for their effectiveness is in a. recruiting top quality candidates. b. aiding employee retention. c. increasing productivity of employees with families. d. reducing the number of complaints, grievances, and lawsuits by employees with families.
b. aiding employee retention.
The main difference between health savings accounts (HSAs) and health reimbursement accounts (HRAs) is that a. unused funds in HSAs cannot be rolled over to the next year by the employee. b. all funds in HRAs are contributed by employers. c. there are no deductibles under HSA plans, whereas HRA plans have high deductibles. d. HSA funds can only be applied to certain "qualified medical expenses," whereas there are fewer restrictions in HRAs.
b. all funds in HRAs are contributed by employers.
In the U.S., Japan, Germany, France and other countries, ____ is/are placing significant financial pressures on government-provided retirement security plans. a. a high birth rate b. an aging population c. increasing standards for quality-of-life in old age d. the trend for older workers to work past traditional retirement age
b. an aging population
What is workers' compensation? a. payments provided to employees who are laid off for financial reasons b. benefits provided to persons injured on the job c. lawsuit judgments awarded to workers injured on the job d. the employee's total pay package: wages plus benefits
b. benefits provided to persons injured on the job
Angela, who lives in Alabama, recently turned down an attractive job offer as director of marketing from a firm in Oregon because it would not provide assistance in finding a job for her husband or assistance in buying a new home in Oregon, where house prices are much higher than in Alabama. It appears that the Oregon firm a. has an entitlement benefits philosophy. b. does not have a relocation assistance program. c. does not offer benefits for domestic partners. d. is discriminating against women.
b. does not have a relocation assistance program.
Of all the benefits paid by employers, on average ____ make up the largest proportion of costs. a. paid leaves, including sick leave b. health insurance c. retirement plans d. long-term disability
b. health insurance
For the typical employer, the largest proportion of the benefits dollar is spent on a. legally required benefits. b. insurance payments. c. retirement plans. d. paid rest periods.
b. insurance payments.
A ____ is a health-care provider that contracts with an employer or an employer group to provide health-care services to employees at a competitive rate. a. contractual medical organization (CMO) b. preferred provider organization (PPO) c. public/private health organization (PPH) d. health maintenance organization (HMO)
b. preferred provider organization (PPO)
"Cost sharing" benefits plans a. involve employers sharing the costs of employee health insurance with government programs such as Medicare and Medicaid. b. require employees to pay a larger proportion of their health benefits costs. c. require insurance companies to share the profits they make with employers who purchase their health insurance plans which results in lower costs for employers. d. will be illegal in 2012 because they have been held to be "kickback" schemes.
b. require employees to pay a larger proportion of their health benefits costs.
The FMLA defines a _______ as one requiring in-patient, hospital, hospice, or residential medical care or continuing physician care. a. medical leave event b. serious health condition c. life threatening illness d. covered health-related event
b. serious health condition
A "personal statement of benefits" a. is the annual benefits report from employers to employees required by ERISA. b. shows each employee how much his/her benefits are worth in dollars. c. is a tool that allows employees to choose the type of benefits that best fits their personal needs. d. is given to an employee upon termination so that he/she is knowledgeable about COBRA, severance pay, unemployment compensation, and other continuing benefits.
b. shows each employee how much his/her benefits are worth in dollars.
In most developed countries, ____ provide/s most health and retirement benefits for citizens. a. employers b. the government c. non-governmental organizations, such as charities d. workers' unions
b. the government
Betty is interviewing for a job with two different firms in the same industry and city. The job description and salary are identical. In one company the job will be unionized. The other company is non-union. Betty can expect that a. the non-union firm will have more generous benefits. b. the unionized firm will have more generous benefits. c. the benefits will be the same at both companies, since benefits are typically based on salary level. d. the unionized firm will likely offer no benefits, because these firms are encountering severe cost-pressures due to global competition.
b. the unionized firm will have more generous benefits.
The director of HR for MCTF Industries is measuring the effectiveness of the benefits at MCTF. She will need to calculate all of the following measures EXCEPT a. benefits as a percentage of payroll over multiple years. b. total cost of benefits compared with total cost of benefits of its main competitors. c. benefits costs per employee group. d. health care costs per participating employee.
b. total cost of benefits compared with total cost of benefits of its main competitors.
Maxine is a single mother with an entry-level management job. She needs to consider her 3-year-old child's future welfare if she should die before her child is self-supporting. Maxine has learned that her company offers group life insurance at the typical level of coverage most companies offer. Maxine will be ____, because the typical level of coverage is ____. a. somewhat disappointed, 10 years of annual salary b. very disappointed, one-and-one-half years of annual salary. c. pleased, 20 years of annual salary. d. pleased, full annual salary until the dependent is 18.
b. very disappointed, one-and-one-half years of annual salary.
In the U.S., pension plans established and funded by employers are a. mandatory for employers with over 100 employees. b. voluntary on the part of employers. c. are on solid financial footing and retirees with pensions can rely on benefits being paid out. d. not valued by older employees because most prefer higher wages to a pension plan.
b. voluntary on the part of employers.
The Family and Medical Leave Act of 1993, requires that employers allow eligible employees to take a total of _________ during any _________ period. a. 12 weeks' paid leave; 12-month b. 24 weeks' paid leave; 24-month c. 12 weeks' unpaid leave; 12-month d. 24 weeks' unpaid leave; 24-month
c. 12 weeks' unpaid leave; 12-month
Which of the following individuals is NOT qualified to receive unemployment compensation? a. An individual who was laid off for financial reasons. b. An individual who was fired for poor productivity. c. An individual who would like to work but who has not applied for any jobs in the last two weeks. d. An individual who has been unsuccessfully looking for work for six months.
c. An individual who would like to work but who has not applied for any jobs in the last two weeks.
Because women live longer than men do a. ERISA allows pension plans to require women to contribute at higher rates to get the same benefits as men. b. ERISA allows pension plans to pay women smaller annual pensions because women will draw on the pension for more years than men will. c. ERISA requires pension plan administrators to use the same "unisex" mortality tables for calculating men's and women's pensions. d. ERISA requires pension plan administrators to offer different choices of pension plans to men and to women so individuals can choose the plan best suited to their anticipated length of retirement.
c. ERISA requires pension plan administrators to use the same "unisex" mortality tables for calculating men's and women's pensions.
Which of the following statements is TRUE? a. Most U.S. citizens over 55 have at least $250,000 in savings and investments. b. Most U.S. workers have pensions through their employers which will help support them in retirement. c. Employers with fewer than 100 workers do not typically offer retirement benefits for their workers. d. U.S. citizens are extremely sensitive to any changes in the federally-provided benefits offered by Social Security.
c. Employers with fewer than 100 workers do not typically offer retirement benefits for their workers.
Glen is excited because his new employer has a stock purchase plan. This means that a. the employer will include grants of stock to Glen as part of his annual performance-based compensation increase. b. Glen will be able to buy company stock below market price and immediately resell it at market rates. c. Glen's employer will match the money that Glen uses to buy company stock at discounted rates. d. Glen's employer provides financial counseling that includes investing advice.
c. Glen's employer will match the money that Glen uses to buy company stock at discounted rates.
Which of the following statements is TRUE about HMOs? a. One of the advantages of HMOs is that they provide care at all levels, from prevention, to maintenance, to treatment of illnesses, to hospitalization, and even to hospice care. b. HMOs are mainly used for preventative medicine and wellness. Employees who are actively ill must use a PPO or POS plan. c. HMOs charge the employer a flat rate per employee or per family. d. HMOs are effective in reducing employee use of health benefits.
c. HMOs charge the employer a flat rate per employee or per family.
Anne has applied for a job with a company that has a mini-medical plan. Anne is 27 years old, single, has no dependents, and is in robust health. Her family health history is excellent. Anne is an avid snow skier on advanced courses, parasailer and show jumping competitor. Which aspect of the plan would be of the MOST concern to her? a. Only 10 doctor visits per year are covered. b. Only a few prescription drugs are covered. c. Hospital coverage is very limited. d. The choice of physicians is restricted.
c. Hospital coverage is very limited.
Why do a relatively low percentage of men take paternity leave? a. Men who are not single parents are not covered in the Family and Medical Leave Act. b. Employers can deny FMLA leave if the employee is not replaceable. Men tend to hold jobs that are more critical than women do. c. It is not socially acceptable for men to stay home for child-related reasons. d. Only one parent per family can take FMLA leave, and most couples decide that the mother will be the one to take FMLA leave.
c. It is not socially acceptable for men to stay home for child-related reasons.
____ consists of approaches that monitor and reduce medical costs using restrictions and market system alternatives. a. Utilization review b. Medical review programs c. Managed care d. Medical option plans
c. Managed care
Which of the following statements is TRUE? a. Mini-medical plans are most appealing to large companies with a high proportion of women employees. b. These plans are popular with retirees who are working part-time because it supplements their Medicare coverage. c. Mini-medical plans are inexpensive for the employer because the services provided are minimal and capped at a low level. d. Mini-medical plans are becoming more popular because although they do not cover minor medical expenses, they do cover catastrophic illnesses or injuries.
c. Mini-medical plans are inexpensive for the employer because the services provided are minimal and capped at a low level.
George and Harriet are getting a divorce after 32 years of marriage. George has been a self-employed architect and does not have a pension plan. Harriet has worked for a car manufacturing company the entire marriage, and she has a generous pension plan. Under _____________ George may have rights to Harriet's pension plan. a. ERISA b. OEPA c. QDRO d. COBRA
c. QDRO (Qualified Domestic Relations Order)
How are Social Security benefits funded? a. an employer tax based on the employer's "experience rating" b. deductions from the employee's paycheck which are transferred to the federal government by the employer c. a federal tax on employee wages and salaries paid equally by employers and employees d. on a state-by-state basis through payroll deductions
c. a federal tax on employee wages and salaries paid equally by employers and employees
Hugo is 45 and has been laid off by his employer, which is moving his job as a customer service representative to a company in India. Hugo figures he will need to work at least 20 more years, and he has little money in savings set aside for retirement. Hugo wants to find a job with an employer with a defined-benefit pension plan. Which of the following employers would be MOST likely to have such a pension plan? a. a start-up wind-energy firm. b. a printing company with 63 employees c. a unionized manufacturing firm with 4,450 employees d. a world-famous restaurant in a popular U.S. vacation spot
c. a unionized manufacturing firm with 4,450 employees
Caveat Emptor Services, Inc., is a consulting firm that offers a service to employers that examines all medical work and charges. Caveat reviews the procedures done and the charges for the procedures. As necessary, Caveat obtains a second opinion about the medical procedures performed. Caveat is performing a. medical monitoring. b. reimbursement control. c. a utilization review. d. a medical services audit.
c. a utilization review.
A problem with flexible benefits plans is ____, a situation in which only higher-risk employees select certain benefits, such as health insurance, and lower-risk employees do not select these benefits. a. concentration of risk b. perceived invulnerability c. adverse selection d. the skewed distribution effect
c. adverse selection
The OWBPA sets forth some very specific conditions that must be met when older workers a. move from full-time to part-time status. b. are denied coverage under an employer's health insurance plan. c. are offered early retirement. d. apply for supplemental social security benefits.
c. are offered early retirement.
Colossus Solar Enterprises is moving its headquarters from Los Angeles to Austin. The HR department has been charged with retaining as many of the LA employees as possible by using relocation benefits. The following are all typical relocation benefits EXCEPT a. assistance in finding a job in Austin for the spouse of the employee transferring from LA. b. helping sell the employee's house in LA and buying a house in Austin. c. bonuses for LA employees accepting a transfer to Austin. d. use of a company expense account while the employee is on house or apartment hunting trips to Austin.
c. bonuses for LA employees accepting a transfer to Austin.
In a contributory pension plan, the money for pension benefits is paid by the a. federal government. b. employee through pre-tax deductions from his/her pay. c. both employees and employers. d. by the employer.
c. both employees and employers.
A pension plan in which retirement benefits are based on an accumulation of annual company contributions (as a percentage of the employee's pay) plus interest credited each year is called a ____ plan. a. contributory retirement b. self-funding c. cash balance d. defined-contribution
c. cash balance
Rapid increases in the costs of health benefits are having all of the following effects EXCEPT a. some employers are dropping health benefits for employees. b. employers requiring retirees to pay more for continued health benefits. c. causing employers to lobby for national, universal health insurance. d. employers substituting mini-health insurance plans for traditional health coverage.
c. causing employers to lobby for national, universal health insurance.
One of the main responsibilities that managers have regarding benefits administration is to a. monitor benefits usage of their subordinates. b. answer technical questions on benefits. c. coordinate the use of time-off benefits. d. assist employees in filing benefit claims.
c. coordinate the use of time-off benefits.
Flexible benefits plans have grown more popular because a. changes in the tax code no longer give a cost advantage to standardized benefit packages. b. the decreasing influence of unions in the workplace, which pressured employers to treat all workers the same. c. employee family and work situations are more variable than they were in the past. d. employees are more sophisticated about their needs and do not need the employer's paternalistic guidance necessary in the past.
c. employee family and work situations are more variable than they were in the past.
If HR experts suggest that a solution for "presenteeism" is employee health-and-wellness programs, this means that these HR experts attribute presenteeism to a. the need to reduce the amount of stress employees are subjected to in their jobs. b. the use of recreational drugs at work. c. employees coming to work when they are sick. d. inadequate employer-provided health insurance.
c. employees coming to work when they are sick.
As director of HR you are discussing cost pressures on the company with the CEO and the CFO. Two possible options are suggested: (1) eliminating raises for employees next year or (2) reducing the health benefits for employees. The CEO and CFO ask you which reduction will cause the most dissatisfaction among employees. You say that research has implied that a. employees will be just as upset with either loss of raises or reduced health benefits. b. employees will be more upset with loss of raises because cash raises can be spent in any manner, whereas health benefits may not even be used during the year. c. employees will be more upset with reduced health benefits than by the loss of pay raises. d. employees are so unaware of their health benefits, they won't even notice reductions, whereas elimination of raises is a "high-visibility" change.
c. employees will be more upset with reduced health benefits than by the loss of pay raises.
Marge is very upset that her employer has begun requiring employees on the health plan to make co-payments for doctor's visits, prescriptions, and other medical services. Marge feels this is unfair. Marge's employer's previous health care plan probably was a/an a. health maintenance organization. b. preferred provider plan. a. Health care providers pass the cost of serving uninsured people on to employers in the form of higher prices for their services. b. Health care costs for uninsured patients are pro-rated among insurance companies operating in the state based on the number of individuals the companies insure, thus increasing insurance companies costs. c. Workers who do not have health insurance do not receive basic health care, making them sicker. When they eventually get jobs with insurance, they have very high usage of medical services for which their insurance pays. d. Workers without health insurance tend to contract contagious illnesses, including drug-resistant tuberculosis. Consequently, insured workers and their families, who would otherwise remain healthy, catch these illnesses and require more medical care. c. first-dollar coverage plan. d. health utilization plan.
c. first-dollar coverage plan.
A group of employees has approached the HR manager with a request that the company sponsor a softball league. The HR manager thinks this is a good idea because a company softball team will a. improve employee productivity. b. decrease absenteeism. c. increase team spirit among employees. d. improve employee health and wellness.
c. increase team spirit among employees.
During summer vacation, Melinda worked as a "character" at a theme park. The job required her to wear a heavy costume over her body, including over her head. Melinda suffered heat stroke when the temperatures were over 95 degrees at the theme park. Her heat stroke was so severe that she suffered ill-effects for several months. Melinda was not well enough to enroll in school the for the fall semester and lost her college scholarship. Melinda received medical care through her employer's worker's compensation, which was fortunate, because Melinda did not have health insurance. Melinda a. can sue her employer for endangering her health by requiring her to wear the heavy costume in extreme temperatures. b. can sue her employer for loss of educational opportunity and for the amount of her scholarship. c. is prevented from suing her employer by the workers' compensation laws. d. cannot sue her employer because she accepted the medical care provided under workers' compensation rather than paying her medical expenses herself.
c. is prevented from suing her employer by the workers' compensation laws.
Roger's mother is in the early stages of Alzheimer's disease, and Roger's father also died of Alzheimer's. Roger, who is 55, is very concerned that he will develop this disease as well. Roger would be most pleased if his company offered a. an integrated disability management plan. b. employee wellness programs. c. long-term care insurance. d. flexible spending accounts.
c. long-term care insurance.
The Financial Accounting Standards Board (FASB) issued Rule 106 regarding accounting treatment of company liabilities for retiree health benefits because a. many firms were using the funds officially set aside for funding retiree health benefits for other purposes. b. a number of firms have set aside excessive amounts of funds for retiree health benefits and are using this as an accounting ruse to prop up their financial statements. c. many firms do not have enough money set aside to fund their retiree health benefits and this should be reflected in the company's financial statements. d. of massive corporate fraud involving funds set aside to fund retiree health benefits.
c. many firms do not have enough money set aside to fund their retiree health benefits and this should be reflected in the company's financial statements.
Megatherium Industries is experiencing a long-term slowdown in sales. Consequently, it needs to permanently lay off a number of its manufacturing hourly employees and also many operations managers. In order to buffer the impact of the layoff on these workers, Megatherium will voluntarily offer a security benefit known as ____ to its departing employees. a. unemployment insurance b. outplacement compensation c. severance pay d. COBRA benefits
c. severance pay
Mike is working for a growing video game design company. One of the reasons he took the job is that if he bought stock in the company, the company would match the amount he invested. Mike feels that this would allow him to benefit from the company's growth, over and above just getting his regular salary and other benefits. This kind of plan is called a/an ____ plan. a. employee-owner b. 401(k) c. stock purchase d. phantom stock
c. stock purchase
George, the director of HR, is writing the "Affidavit of Spousal Equivalence" that non-traditional couples will need to sign in order to receive domestic partner benefits. George will require the couples to make all the following affirmations EXCEPT a. each is the other's only spousal equivalent. b. they are not blood relatives. c. that their relationship is permanent. d. they are living together and jointly share responsibility for their common welfare and financial obligations.
c. that their relationship is permanent.
George has four children, all with poor vision and crooked teeth. George himself has high blood pressure and an over-active thyroid and takes many prescription medications. In addition, George's wife injured her spine in a sports accident and will require several operations. Consequently, George is looking for a job with an employer with generous benefits. Typically, it will be MOST DIFFICULT for George to find an employer with benefits to cover a. the spine surgery. b. the dental and orthodontia expenses. c. the glasses and contacts. d. the prescription drugs.
c. the glasses and contacts.
Which of the following individuals would NOT qualify for COBRA? All of these employers have more than 20 employees. a. the 16-year old daughter of an employee of a medical products company who died of a massive stroke while on company business b. the husband of an employee of a museum who has just taken early retirement c. the secretary of a church congregation who has been laid off because of declining church income d. an employee who quit a job with a movie theater chain
c. the secretary of a church congregation who has been laid off because of declining church income
A trend in healthcare insurance benefits is a. toward providing higher levels of benefits for higher-performing employees as a motivation tool. b. toward eliminating or reducing benefits for classes of employees who have poorer health. c. transferring more of the cost of health insurance to the employees from the employer. d. toward standardizing benefits to make benefits provision more cost-effective.
c. transferring more of the cost of health insurance to the employees from the employer.
Anna has been called to serve her tour of duty in Iraq as a reserve officer in the Marines. She is leaving for the war zone in 30 days. Which of the following statements is TRUE? a. Anna's employer is required by federal law to pay her the difference between her military pay and her civilian pay. b. Anna's employer is required to give her military leave. But, if Anna was only called for training, she would have to use personal vacation days rather than leave. c. Anna's employer can require her to use up her three weeks of paid vacation while she is deployed. d. Anna's employer is not required by law to continue her pay either in total or in part.
d. Anna's employer is not required by law to continue her pay either in total or in part.
Which of the following statements is TRUE regarding a 1986 amendment to the Age Discrimination in Employment Act (ADEA). a. Pension plans must be available to employees at the time and age that they choose to collect Social Security. b. Claudia has just turned 65. It would be legal for Claudia's employer to reduce her health care benefits since Claudia now qualifies for Medicare. c. Employers can no longer specify a "normal" retirement age. d. Bill is 78 and is working part-time for a "big box" home and garden store. The store manager cannot require Bill to retire.
d. Bill is 78 and is working part-time for a "big box" home and garden store. The store manager cannot require Bill to retire.
Which of the following statements about communication of benefits to employees is TRUE? a. Benefits plans are highly complex and legalistic. Consequently, all written information must be followed up with face-to-face meetings between HR staff and employees. b. Employees place such a low value on their benefits that they tend to ignore communication on this topic. c. The main point that should be stressed in benefits communication is that most benefits, such as health insurance, are voluntary on the part of the employer and can be eliminated at any time.. d. Employees need to be educated on the value of their benefits, the financial cost of benefit to their employer, and why their benefits are being changed.
d. Employees need to be educated on the value of their benefits, the financial cost of benefit to their employer, and why their benefits are being changed.
Which of the following statements is FALSE regarding FMLA. a. Employees without families who are required to pick up the slack for employees taking family leave can be resentful. b. Employers often do not understand FMLA requirements. c. Employees caring for a family member who is an injured veteran are eligible for 26 weeks leave. d. Fitness-for-duty tests are illegal for employees returning from FMLA leave for personal medical conditions.
d. Fitness-for-duty tests are illegal for employees returning from FMLA leave for personal medical conditions.
Karen is diabetic. She quit her job as an internal auditor with a bank and two months later found a job as the assistant CFO for a chain of grocery stores. The law that allows Karen to switch her health insurance plan from her former employer to her new employer to get new health insurance that covers her diabetes is a. ERISA b. FMLA c. COBRA d. HIPAA
d. HIPAA
Pfalz Bakeries, Inc., has experienced problems staffing its operations during the week of Mardi Gras, even though this is a busy and profitable time period for the company. Many employees schedule their vacations during Mardi Gras, but demand for king cakes peaks during this week. The HR manager feels it would have a negative impact on employee morale to ban any vacations during Mardi Gras week. Which of the following is the best option for the HR manager to maintain staffing levels and bakery sales? a. Require employees to work the last scheduled day before Mardi Gras and the first scheduled day after Mardi Gras. b. Give employees free king cakes every day during Mardi Gras week. c. Close down the bakery during Mardi Gras and give employees a week of unpaid vacation. d. Pay employees who work during Mardi Gras week time-and-one-half.
d. Pay employees who work during Mardi Gras week time-and-one-half.
____ is the right of employees to receive benefits from their pension plans if they remain with their employer a certain period of time. a. Qualifying b. Portability c. Entitling d. Vesting
d. Vesting
The most constructive way to view benefits is a. a cost to be minimized. b. a government-mandated burden. c. culturally necessary. d. a tool for competitive advantage.
d. a tool for competitive advantage.
A flexible benefits plan a. allows employees to contribute pre-tax dollars to buy additional benefits beyond the employer's basic package. b. continuously updates benefit options as employee needs and desires change. c. combines all time-off benefits into a total number of hours that employees can take off with pay. d. allows employees to select the benefits they prefer from groups of benefits established by the employer.
d. allows employees to select the benefits they prefer from groups of benefits established by the employer.
A key legal factor in early retirement plans is that they a. be announced 60 days in advance to allow employees to confer with financial advisors and not be pressured into making an immediate decision. b. be offered to both union and non-union employees if the company is unionized. c. be equivalent in amount to what the employee would have received if he/she had retired at 65. d. be voluntary.
d. be voluntary.
As director of HR of a company that does not presently use benefits administration software, you want to reduce the number of HR benefits staff. The first area of benefits administration to target would be a. calculating and monitoring employee paid-time-off and FMLA leaves. b. employee benefit education and communication. c. health benefits administration. d. benefits enrollment.
d. benefits enrollment.
How is workers' compensation usually funded? a. by a tax levied on employers by state governments based on the employer's average monthly number of employees b. by contributions to a pool of funds by organizations in the same industry which purchase insurance for the employers as a group c. through state value-added taxes on goods sold and manufactured d. by insurance purchased by employers from a private carrier or state insurance fund or by self-insurance
d. by insurance purchased by employers from a private carrier or state insurance fund or by self-insurance
In a/an ____ plan the employer makes an annual payment of a predetermined amount into an employee's pension account. The retiree's payout will vary depending on the investment returns of the pension account. a. ERISA b. defined-benefit c. non-contributory pension d. defined-contribution
d. defined-contribution
All of the following are ways to reduce an organization's health insurance costs EXCEPT a. programs to give employees financial incentives to lose weight and quit smoking. b. providing gym memberships to employees or exercise equipment at the workplace. c. employing utilization review of healthcare provider services and charges. d. eliminating coverage for psychiatric illnesses and treatment for addiction.
d. eliminating coverage for psychiatric illnesses and treatment for addiction.
Which of the following is NOT a COBRA qualifying event? a. employee moved from full-time with benefits to part-time without benefits b. death of employee c. employee and current spouse become divorced d. employee termination for insubordination
d. employee termination for insubordination
Gigantic MotorVehicles, Inc., has more retired employees than currently-employed workers. As part of its generous benefits plan in decades past, it provided all of its retirees with full medical benefits. Most of GMV's retirees are on fixed and limited incomes, and are barely making ends meet with savings, pension, and Social Security. In addition, many of the most elderly of the retirees, those over 80, have significant and expensive medical problems. Most of the retirees spent their entire careers with GMV, and actually took and kept these jobs just so that they could retire with good pensions and benefits. GMV has had disastrous financial performance over the past few years and has been cutting costs as much as possible without destroying the company's ability to perform. As HR director, your face all of the following issues EXCEPT a. cutting health benefits to retirees and facing lawsuits. b. the ethical dilemma of breaking the company's promises to people who are too old to have any other options for health care. c. facing negative press and damaging GMV's image by acting against the interests of elderly and loyal former employees. d. federal prosecution for cutting retiree's health benefits.
d. federal prosecution for cutting retiree's health benefits.
Paula, the director of employee development for an airline, is designing a tuition aid program for the employees. She wants to assess whether the program will have a good return on investment for the airline. To do so, she is building in a long-range assessment system that will measure all of the following EXCEPT a. employee satisfaction with the program. b. retention of employees who have used tuition aid. c. internal promotions of employees who have used tuition aid. d. grades earned by employees on tuition aid.
d. grades earned by employees on tuition aid.
The FMLA of 1993 provides that a. employees must be able to return to their former job following the leave. b. the FMLA leave "clock" begins after all vacation and personal days have been used. c. the leave must be taken as one 12-week block. d. health benefits must be continued during the leave at the same level and conditions.
d. health benefits must be continued during the leave at the same level and conditions.
A ____ is a managed care approach that provides health services to an organization's employees for a fixed period on a prepaid basis. a. contractual medical organization (CMO) b. preferred provider organization (PPO) c. public/private health organization (PPH) d. health maintenance organization (HMO)
d. health maintenance organization (HMO)
Employee benefits are a/an a. legal and ethical responsibility of employers. b. type of employer social activism. c. type of corporate charity. d. indirect reward for employees.
d. indirect reward for employees.
Those benefits which employers in the United States are required to provide by law are called ____ benefits. a. obligatory b. federal c. compulsory d. mandated
d. mandated
A program that combines sick leave, vacations, and holidays into a total number of hours or days that employees can take off with pay is called a/an ____ plan. a. consolidated time off b. European c. accumulated leave d. paid time-off
d. paid time-off
Long-term disability insurance a. is a mandatory security benefit for non-governmental employers with over 50 employees. b. allows employees to accrue sick leave for time-limited emergency needs. c. pays for long term care such as nursing home, assisted living, and home health-care for disabled persons. d. provides continuing income protection for employees who become are unable to work because they are disabled.
d. provides continuing income protection for employees who become are unable to work because they are disabled.
The Health Insurance Portability and Accountability Act (HIPAA) requires a. employers with more than 50 employees provide medical insurance for all full-time employees. b. employers to offer health coverage to contingent workers if the workers pay 102% of the employer's cost. c. that most employers offer extended health-care coverage to employees after they leave the organization. d. that most employees be able to switch their health insurance from one company to another to get new health coverage, regardless of pre-existing conditions
d. that most employees be able to switch their health insurance from one company to another to get new health coverage, regardless of pre-existing conditions
The most frequently outsourced benefits function is a. managing paid time off plans. b. education and tuition reimbursement programs. c. coordination of FMLA leave. d. the Employee Assistance Plan.
d. the Employee Assistance Plan.
What is the basis for determining the employer's cost of unemployment compensation? a. the type of business and industry and its known seasonal fluctuations in employment b. the number of covered employees c. the employer's total payroll cost d. the number of claims filed by former employees
d. the number of claims filed by former employees
For employers, the cost advantages of defined-contribution health plans include all of the following EXCEPT a. increases in health-care costs are shifted to employees. b. employees must control their own health-care usage. c. employer's contributions are limited to a set amount. d. unused funds in employee accounts roll back to the employer at the end of the year.
d. unused funds in employee accounts roll back to the employer at the end of the year.
___ is the generic term for programs providing employees with assistance in caring for aged relatives. a. Elder care b. Family care c. Care-giver respite d. A hospice program
a. Elder care
____ is the main federal legislation providing privacy rights regarding employee medical records. a. HIPAA b. COBRA c. ERISA d. FMLA
a. HIPAA
Clarence is 59 years old. His employer, Twentieth Century Motors, is offering an early retirement package for workers 58 years old and older. The early retirement package appears financially generous, but in order to receive it, Clarence will be required to sign a waiver that he will not in the future sue Twentieth Century Motors for age discrimination. Clarence's rights in this situation are protected by the a. OWBPA. b. COBRA c. ERISA d. WARN
a. OWBPA.
You are the director of benefits for a large, highly-profitable high-technology company widely respected as an employer-of choice. Organizational strategy requires that employees be world-class in their field. You are forming a committee to review the company's benefits design. The committee ought to focus on all of the following issues EXCEPT a. whether the company should offer high pay in lieu of health insurance. b. how flexible the package of benefits should be. c. what proportion of total compensation benefits should comprise. d. which mix of benefits will be most attractive to prospective employees.
a. whether the company should offer high pay in lieu of health insurance.
Which of the following statements is TRUE? Under federal law, employers must give employees a. severance pay. b. paid sick leave. c. time off to care for sick children and parents. d. medical insurance.
c. time off to care for sick children and parents.
Which of the following statements is FALSE about Health Savings Accounts? a. HSAs require participants to "use it or lose it" in that unused funds cannot be rolled over to the next year. b. Individual employees can set aside pre-tax dollars for medical care thus reducing the cost of healthcare by their tax rate. c. Both employers and employees can make contributions to HSAs. d. HSAs have high annual deductibles which must be paid by the employee participants..
a. HSAs require participants to "use it or lose it" in that unused funds cannot be rolled over to the next year.
____ are more risky from the point of view of retirees than are ____. a. Defined benefit, defined contribution b. Defined contribution, defined benefit c. Contributory plans, non-contributory plans d. Non-contributory plans, contributory plans
b. Defined contribution, defined benefit
ESOPs, 401(k) plans, and profit-sharing plans are all examples of a. pension plans. b. contributory plans. c. defined-benefit plans. d. cash-balance plans
b. contributory plans.
Clara is running a 102 degree fever and she suspects she has the flu. But, Clara comes to work, anyway. Clara has large unpaid balances on her credit cards, and she plans to take no sick leave this year so that at the end of the year, her employer will "buy back" her unused sick leave. Clara will thus be receiving a. sick leave rebates. b. paid time off. c. well-pay. d. FMLA pay.
c. well-pay.
Ambrose has been recently transferred from the Ohio headquarters of his firm to the European office. He is surprised to learn that instead of the 10 days of vacation per year he receives from his employer, his European colleagues get a. no discretionary vacation, only state holidays off. b. exactly the same amount of vacation he gets in the U.S., but no family leave. c. 20 days of vacation per year, double the Ohio office's practice. d. over 30 vacation days a year.
d. over 30 vacation days a year.
