Deck 9: Employee Benefits

Question 1

Which of the following statements about employee benefits is true?

A) Employee benefits of all types are mandated by law and are not discretionary.
B) Employee benefits are not part of a company's total compensation package.
C) Employee benefits are funded either by the government or the employer; not the employee.
D) Employee benefits of all types are discretionary and are not mandated by law.
E) Most employee benefits are not taxable.

Answer 1

Most employee benefits are not taxable.

Question 2

What is vesting of pension benefits?

A) It is the exclusion of new employees from benefits coverage until some term of employment is completed.
B) It is the reduction of benefits by any amount paid under a spouse's plan.
C) It is the negotiation some employers have with employees about wage concessions to reduce employer contributions to selected benefits.
D) It is a general strategy used to control medical benefit costs by promoting preventive health programs.
E) It occurs when employees become entitled to the employer-paid portion of pension benefits upon termination of employment.

Answer 2

It occurs when employees become entitled to the employer-paid portion of pension benefits upon termination of employment.

Question 3

Benefits administration involves three main functions: (1) communicating the benefits program, (2) claims processing, and (3) _____.

A) legal compliance
B) competitor assessment
C) cost containment
D) tracking employee usage
E) revising benefits

Answer 3

cost containment

Question 4

Which of the following is an employee benefit required by law?

A) breaks, vacation, and leaves
B) employee assistance plan
C) payments for vacation
D) employee stock ownership plan
E) severance pay plan

Question 5

Portability refers to _______.

A) moving life insurance benefits between spouses
B) reaching the service time necessary to be entitled to the employer's contributions to the pension plan
C) moving from short-term disability to long-term disability
D) moving from a defined benefit plan to a defined contribution plan
E) transferring one's pension from one employer to another

Question 6

Which of the following is one of the main reasons for increases in healthcare costs?

A) more new workers entering the workforce
B) increasing occurrence of repetitive stress injuries
C) the popularity of flexible benefit plans
D) the increasing number of retiring employees
E) rising drug utilization by an aging population

Question 7

Which of the following is a proactive way to reduce absenteeism and disability costs?

A) life insurance
B) medical insurance
C) flexible benefits
D) employee assistance programs
E) child care services and elder care

Question 8

A flexible benefit plan increases employee awareness of the true costs of benefits and therefore can decrease employee recognition of the value of the benefits the company offer

Question 9

Contributory costs feature the employee paying the full costs.

Question 10

Claims processing determines whether an employee is eligible for the benefit.

Question 11

A TFSA is a form of income security.

Question 12

Flexible benefits do not include required core benefits

Question 13

Discuss the four major administration issues that arise when setting up a benefits package.

Question 14

List the various cost-containment strategies available to employers.