Deck 10: Managing the Employee-Benefits System

Question 1

Benefits are considered "qualified" if the employee may exclude the cost from federal income tax.(Cafeteria Plans under Section 125)

Answer 1

True

Question 2

A summary of material modifications might include changes in plan eligibility rules.(Legal Considerations in Benefits Communication)

Answer 2

True

Question 3

Insurers may conduct concurrent utilization reviews shortly after hospital admission (Utilization Reviews)

Answer 3

True

Question 4

Premium-only payment systems refer to payment arrangements between managed care insurers and health care providers.(Types of Flexible Benefit Plan Arrangements)

Question 5

Utilization reviews are used to evaluate the quality of specific health-care services.(Utilization Reviews)

Question 6

Under cafeteria plans,employers grant employees the opportunity to accept or reject benefits such as day care benefits.(Employer Choice to Customize Benefits)

Question 7

Flexible premium accounts usually apply to expenses that exceed regular benefits limits.(Types of Flexible Benefit Plan Arrangements)

Question 8

After-tax contributions reduce the amount of annual income subject to income tax.(Employee Contributions)

Question 9

Modular plans extend a pre-established set of benefits such as health-care and retirement plans as a program core.(Core-Plus-Option Plans)

Question 10

Insurers use retrospective utilization reviews to determine that all treatment claims were legitimate.(Utilization Reviews)

Question 11

Pretax salary reduction plans allow employees reduced taxes on their salary.(Types of Flexible Benefit Plan Arrangements)

Question 12

Sponsors of utilization reviews hire medical doctors and registered nurses to carry out the review.(Utilization Reviews)

Question 13

Employers must supply employees with updated summary plan descriptions after every 4 years.(Legal Considerations in Benefits Communication)

Question 14

To more effectively communicate a benefits package to employees,more companies are having new employees meet one-on-one with benefits counselors.(The "Good Business Sense" of Benefits Communication)

Question 15

Waiting periods specify the maximum length of time an employee must remain employed before becoming eligible for benefits coverage.(Waiting Periods)

Question 16

If employees don't choose the maximum benefits limits in a core-plus-option cafeteria plan they lose the difference.(Types of Flexible Benefit Plan Arrangements)

Question 17

Employers use case management companies to ensure that all of their employees' medical needs are being met adequately.(Case Management)

Question 18

FSLA requires employers to provide employees with written summaries of the benefits plan's description and of material modifications.(Legal Considerations in Benefits Communication)

Question 19

Under the modular plan,employees contribute the cost difference between a more extensive benefits package and the lowest-cost package.(Modular Plans)

Question 20

Satisfying nondiscrimination rules permits plan participants to take tax deductions for qualified benefits.(Cafeteria Plans under Section 125)

Question 21

Some companies have adopted high-deductible workers' compensation plans,substantially lowering their premiums.(High-Deductible Plans)

Question 22

Longer waiting periods is one way companies try to reduce the cost of benefits.(Waiting Periods)

Question 23

The top reason companies outsource benefits functions is for the expertise.(Outsourcing the Benefits Function)

Question 24

Fee-for-service plans establish provider payment systems to control the costs of health care.(Provider Payment Systems)

Question 25

Case management is conducted by primary care physicians.(Case Management)

Question 26

ERISA sets forth legally required disclosure requirements.(Legal Considerations in Benefits Communication)

Question 27

Group meetings and audiovisual presentations provide the key features of benefits programs,conveying the "big picture" and helping potential employees compare benefits offerings with those offered by other companies they may be considering.(The "Good Business Sense" of Benefits Communication)

Question 28

Employers have been shifting health related costs to employees partly because of the economic downturn starting in the 2000s.(Employee Education)

Question 29

Pretax contributions do not reduce the amount of annual income subject to income tax.(Employee Contributions)

Question 30

It is possible to have a qualified Section 125 cafeteria plan for managers only.(Cafeteria Plans under Section 125)

Question 31

Mix-and-match plans allow employees to purchase any benefit but at only certain levels.(Types of Flexible Benefit Plan Arrangements)

Question 32

ERISA limits waiting periods before participation in employer-sponsored health-care programs to a maximum of 90 days.(Waiting Periods)

Question 33

A cafeteria plan is one example of a one-size-fits-all approach (A Comparison of Traditional Benefits Plans and Flexible Benefits Plans)

Question 34

Employers are obligated to distribute summary plan descriptions to employees and DOL within 90 days of the plan becoming subject to ERISA's reporting requirements.(Legal Considerations in Benefits Communication)

Question 35

In most companies,employers choose whether an employee will participate in wellness programs,thus initiating a lifestyle intervention.(Lifestyle Interventions)

Question 36

Employers must follow several guidelines to maintain a Section 125 cafeteria plan,specifically,the plan must be in writing.(Cafeteria Plans under Section 125)

Question 37

Pertaining to case management,serious health problems arising from injuries or illnesses may be acute (ongoing)or chronic (possibly life threatening).(Case Management)

Question 38

Under mix-and-match plans each flexible credit awarded to purchase benefits equals $10.(Types of Flexible Benefit Plan Arrangements)

Question 39

Outsourcing benefits administration can be very expensive in the short fun because most or all contract fees are due up front.(Outsourcing the Benefits Function)

Question 40

Summary plan descriptions are generally short and only present the "big picture" of a benefit plan.(Legal Considerations in Benefits Communication)

Question 41

This cafeteria plan allows employees to exclude allocated income from federal income tax to pay for the benefits.(Types of Flexible Benefit Plan Arrangements)

A)Core-plus-option plans
B)Modular plans
C)Pretax salary reduction plans
D)Mix-and-match plans

Question 42

Which of the following is not a feature of prospective reviews or precertification reviews? (Utilization Reviews)

A)Verifying a patient's coverage
B)Determining whether the health plan covers the treatment
C)Judging whether the proposed treatment is medically appropriate
D)Proceeding without a second surgical opinion

Question 43

Changes in benefits plans must be described and distributed to employees using one of these.(Legal Considerations in Benefits Communication)

A)Summary plan modifications
B)Summary plan changes
C)Summary of benefit changes
D)Summary of material modifications

Question 44

ERISA requires that material modification summaries must be sent to the Department of Labor within how many days after the end of the plan year in which the change occurred.(Legal Considerations in Benefits Communication)

A)210
B)180
C)90
D)120

Question 45

Flexible spending accounts and premium-only plans are versions of which cafeteria plan? (Types of Flexible Benefit Plan Arrangements)

A)Modular
B)Pretax salary reduction
C)Core-plus-option
D)Mix-and-match

Question 46

These are the 4 most common types of cafeteria plans.(Types of Flexible Benefit Plan Arrangements)

A)Premium-only,mix-and-match,core-plus-option,salary reduction
B)Salary reduction,modular,core-plus-option,mix-and-match
C)Material modification,mix-and-match,core-plus-option,modular
D)Mix-and-match,material modification,premium-only,salary reduction

Question 47

Which of following statements is true of outsourcing benefits functions? (Outsourcing the Benefits Function)

A)Outsourcing agreements are on a monthly basis.
B)Outsourcing refers to an employer transferring responsibility to a third-party provider to manage one or more benefits.
C)Outsourcing some or all benefits administration is decreasing.
D)Companies outsource roughly one-tenth of all their benefits functions.

Question 48

This type of utilization review judges whether additional inpatient hospitalization is medically necessary.(Utilization Reviews)

A)Prospective
B)Certification
C)Concurrent
D)Retrospective

Question 49

This cafeteria plan allows a single-mother employee to select a benefits package designed to meet the particular needs of single-mothers.(Types of Flexible Benefit Plan Arrangements)

A)Core-plus-option
B)Flexible spending account
C)Mix-and-match
D)Modular

Question 50

Under this provider payment system,managed care plans hold primary care physicians accountable for the cost of services rendered to each assigned patient.(Provider Payment Systems)

A)Full capitation
B)Full capitation plus
C)Partial capitation
D)Semi capitation

Question 51

If all employees are offered health insurance and retirement benefits,but then get to select the rest of their benefits package,then they're being offered what type of cafeteria plan? (Types of Flexible Benefit Plan Arrangements)

A)Core-plus-option
B)Mix-and-match
C)Modular
D)Flexible spending

Question 52

ERISA requires that employees receive a summary plan description within how many days of becoming a plan participant? (Legal Considerations in Benefits Communication)

A)120 days
B)60 days
C)90 days
D)30 days

Question 53

ERISA requires employers to distribute new summary plan descriptions to the Department of Labor within how many days.(Legal Considerations in Benefits Communication)

A)210
B)90
C)180
D)120

Question 54

These are the three types of utilization reviews.(Utilization Reviews)

A)Qualified,modified,nondiscriminatory
B)Prospective,concurrent,retrospective
C)Flexible,core-plus,mix-and-match
D)Precertification,prospective,retrospective

Question 55

This Section of the IRC permits an employer to offer employees the choice between taxable income or to allocate some of their income to purchase qualified benefits through a cafeteria plan.(Cafeteria Plans under Section 125)

A)125
B)152
C)127
D)172

Question 56

Under provider payment systems,agreements may include one or more cost saving features.Which of the following is not one of these cost saving features? (Provider Payment Systems)

A)Percentage discounts
B)Capped fee schedules
C)Partial capitation
D)Whole capitation

Question 57

Which of the following is not an ERISA requirement pertaining to employer-sponsored benefits plans? (Legal Considerations in Benefits Communication)

A)Written notices must be written for the "average" participant to understand.
B)The waiting period before participation in employer-sponsored health-care programs is limited to a maximum of 90 days.
C)Employers are obligated to distribute summary plan descriptions to employees within 120 days of the plan becoming subject to reporting and disclosure requirements.
D)Employees must receive a summary plan description within 90 days of becoming a plan participant.
Essay Questions

Question 58

Under this provider payment system,primary care physicians are paid a fixed dollar amount for each patient.(Provider Payment Systems)

A)Capped-fee schedule
B)Semi-capitation
C)Full capitation
D)Partial capitation

Question 59

Which of the following compares the nontaxable benefits provided to key employees to the nontaxable benefits provided to all employees? (Cafeteria Plans under Section 125)

A)Eligibility
B)Concentration
C)Concurrent reviews
D)Prospective reviews

Question 60

Which of the following statements concerning provider payment systems is NOT true?

A)Fee-for-service plans generally contain this feature to control the costs of health care.
B)Provider payment systems negotiate acceptable payment amounts to participating doctors,hospitals,and pharmacies for the duration of the contract.
C)A percentage discount reduces the amount of a health-care providers' usual charge.
D)A partial capitation system applies to primary care physicians.

Question 61

Describe outsourcing of benefits functions and provide reasons for outsourcing.(Outsourcing the Benefits Function)

Question 62

Explain why educating employees about the cost of health care is essential to controlling the rising costs of health-care programs.(Employee Education)

Question 63

Compare one-size-fits-all benefits with employee choice.(A One-Size-Fits-All Approach,Employer Choice to Customize Benefits)

Question 64

Briefly discuss the information that summary plan descriptions must provide.(Legal Considerations in Benefits Communication)

Question 65

Discuss the concept of "good business sense" of benefits communication.(The "Good Business Sense" of Benefits Communication)