Deck 21: Unemployment and Workers Compensation Insurance

Question 1

Experience rating of the unemployment program has which of the following effects?

A) Penalizes good employers that never fire employees
B) Encourages short-term layoffs and causes an unstable workforce
C) Charges employers more when the economy is weak, thus charging for poor experience when companies can least afford it
D) Provides funds to continue employment instead of dismissing employees

Answer 1

C

Question 2

Workers' compensation covers all of the following losses except:

A) medical expenses resulting from a job-related injury
B) rehabilitation expenses resulting from a job-related injury
C) lost wages during a disability that results from job-related injuries
D) medical expenses resulting from an at-home accident

Answer 2

D

Question 3

Which of the following was a common law defense used by employers prior to the enactment of workers' compensation laws?

A) Strict liability
B) Comparative negligence
C) Contributory negligence
D) stare decisis

Answer 3

C

Question 4

Unemployment benefits are usually available in which of the following situations?

A) Worker voluntarily quits to find a better job
B) Worker fired for theft
C) Worker is laid-off when employer becomes bankrupt
D) Worker is participating in a strike

Question 5

Which of the following does not influence a worker's eligibility for, and amount of, unemployment benefits?

A) Waiting period
B) Earnings record
C) Continuing interest in employment
D) Type of work performed

Question 6

Which of the following is not a requirement for receiving unemployment benefits?

A) Experience a waiting period before benefits are paid
B) Have an earnings record
C) Have a continuing interest in employment
D) The national unemployment percentage must exceed a certain level

Question 7

Which of the following is not an economic benefit to society of unemployment insurance?

A) Provides employers a liability-free way to discharge employees without cause
B) Provides spendable cash for dismissed employees
C) Abates the downward spiral of the economy because of reduced spending
D) Helps keep families together under hard economic times

Question 8

The exclusive remedy of workers' compensation law states that the:

A) compensation scheme for a work-related injury is the employee's choice
B) employer can sue employees for misconduct after compensation is paid
C) employee can only collect from the workers' compensation system for work-related injuries
D) worker must exclusively use the tort system to resolve liability claims against the employer

Question 9

Each of the following describes a condition under which an employee is injured on the job. Under which of these would the employer not have to provide workers' compensation benefits to the injured employee?

A) Employee falls asleep on the job
B) Employee is distracted by a fellow employee
C) Employee was late for work
D) Employee had several beers before work

Question 10

Which of the following is not a purpose of workers' compensation laws?

A) Give broad coverage to employees for work related injuries
B) Protect workers against lost earnings
C) Protect employers against the business interruption risk
D) Provide sufficient medical care for the injured worker

Question 11

If a state collects unemployment taxes, then federal unemployment taxes are offset by up to:

A) 50%
B) 70%
C) 90%
D) 100%

Question 12

Which one of the following is not a concern of the risk manager with respect to workers' compensation?

A) Health-related costs
B) Cumulative injury problems
C) The increasing frequency of litigation concerning compensation
D) The increasing use of the assumption of risk defense to deny workers' compensation claims

Question 13

Which of the following is paid for under most workers' compensation systems?

A) Injuries resulting from intoxication
B) Self-inflicted intentional injuries
C) Injuries resulting from willful failure to follow safety rules
D) Injuries occurring from "horse-play" on the job

Question 14

Choose the year closest to the enactment of unemployment insurance:

A) 1929
B) 1935
C) 1946
D) 1955

Question 15

The major change established by the passage of workers' compensation laws was to:

A) help lawyers obtain more business
B) substitute the employer's liability without fault for the common law doctrine of negligence
C) enable the employer to effectively defend itself in a liability suit
D) bar the employee from recovery for job related injuries

Question 16

Unemployment insurance is financed by a ________ on covered wages.

A) 7.65% federal tax on covered wages up to $7,000
B) 6% federal tax on covered wages up to $7,000
C) 5.4% federal tax on covered wages up to $87,000
D) 6% state tax on covered wages up to $7,000

Question 17

Government control over the money supply using interest rates to effect changes in the economy is called:

A) fiscal policy
B) monetary policy
C) tax policy
D) transfer payments

Question 18

What is the federal covered maximum wage for unemployment insurance taxation?

A) $700
B) $7,000
C) $70,000
D) $700,000

Question 19

Workers' compensation is likely to cover all the following except:

A) 100 percent of lost wages during disability
B) medical expenses
C) rehabilitation expenses
D) reasonable funeral expenses

Question 20

Which of the following is false concerning unemployment insurance?

A) It is experience-rated.
B) It originated in the Social Security Act of 1935.
C) It is paid for by both the employee and employer in the form of a wage-based tax.
D) It does not provide benefits to a worker who voluntarily quits a job.

Question 21

Which of the following statements about workers' compensation insurance is true?

A) The cost to employers has been increasing.
B) The premiums have been decreasing.
C) Insurers have been making high profits on this coverage.
D) None of the above

Question 22

All workers' compensation claims are reviewed by special courts.

Question 23

Workers' compensation insurance today is primarily a federal, rather than a state, program.

Question 24

Workers' compensation insurance covers both job-related injuries and occupational diseases.

Question 25

Intentionally self-inflicted injuries are usually, though not always, covered by workers' compensation insurance.

Question 26

Before workers' compensation laws, what legal defenses did employers use when they were sued by an employee injured at work? Briefly explain each of these defenses.

Question 27

Explain how a worker can be disqualified for unemployment benefits.

Question 28

Experience rating of workers' compensation insurance rewards employers with good safety records.

Question 29

The majority of workers' compensation coverage comes from state-operated insurance pools.

Question 30

Cumulative injuries refer to disabling illnesses that occur over time in a working career.

Question 31

What are the general types of benefits provided under workers' compensation?

Question 32

When state unemployment funds are inadequate to continue paying benefits to unemployed workers, the state can:

A) declare bankruptcy
B) levy additional taxes on an ad hoc basis, but no more than 10% in one year
C) do nothing other than file a claim under any private unemployment insurance it may have purchased
D) borrow from the federal government without paying interest

Question 33

From the employer's stand point, workers' compensation insurance may be seen as a substitute for other types of liability insurance.

Question 34

Explain the economic significance for the existence of unemployment insurance.

Question 35

List and explain briefly the purposes of the workers' compensation laws.

Question 36

Assumption of risk was a common defense used by employers prior to the enactment of workers' compensation laws.

Question 37

Unemployment insurance is both a state and a federal program.

Question 38

The states can finance deficits in their unemployment compensation programs with interest-free loans from the federal government.