Deck 13: Employee Benefits

Question 1

Where employee contributions completely fund the disability insurance plan, there is no federal tax.

Answer 1

True
Explanation: Where employee contributions completely fund the disability insurance plan, there is no federal tax. Benefits based on employer contributions are taxed.

Question 2

One of the objectives of the unemployment insurance program is to offset lost income during voluntary unemployment.

Answer 2

False
Explanation: The unemployment insurance program was established by the 1935 Social Security Act, and has four major objectives: (1)to offset lost income during involuntary unemployment, (2)to help unemployed workers find new jobs, (3)to provide an incentive for employers to stabilize employment, and (4)to preserve investments in worker skills by providing income during short-term layoffs (which allows workers to return to their employer rather than start over with another employer).

Question 3

In contrast to unemployment insurance benefits, disability benefits are tax-free.

Answer 3

True
Explanation: In contrast to unemployment insurance benefits, disability benefits are tax-free. The system is financed differently by different states, some having a single state fund, most allowing employers to purchase coverage from private insurance companies.

Question 4

The smaller the cost of a benefit category, the greater the opportunity for savings.

Question 5

Unlike workers in most western European countries, who have nationalized health systems, the majority of Americans receiving health insurance get it through their (or a family member's)employers.

Question 6

With the passage of the Americans with Disabilities Act, employers came under even greater pressure to deal effectively and fairly with workplace injuries.

Question 7

Social Security retirement benefits are no longer subject to an earnings test once retirement age is reached.

Question 8

Insurance risks can be more easily pooled in smaller groups.

Question 9

Beneficiaries do not get free coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Question 10

Private pension income remains the largest single component of an elderly person's overall retirement income.

Question 11

Fitness facility programs have two central goals: raising awareness levels of health-related issues and informing people on health-related topics.

Question 12

Part-time employees receive about the same benefits as full-time employees.

Question 13

Workers' compensation benefits exclude rehabilitative services.

Question 14

Activities such as preadmission testing and second surgical opinions focus on shifting, rather than reducing, costs.

Question 15

Defined contribution plans insulate employees from investment risks, which are borne by the company.

Question 16

The Consolidated Omnibus Budget Reconciliation Act (COBRA)requires that the beneficiary (whether the employee, spouse, or dependent)must have access to the same services as employees who have not lost their health insurance.

Question 17

Health insurance, like pensions, discourages employee turnover because not all employers provide health insurance benefits.

Question 18

In contrast to Social Security retirement benefits, unemployment benefits are taxed as ordinary income.

Question 19

Medical insurance and disability insurance programs are legally required.

Question 20

Economic theory tells us that people prefer a dollar in cash over a dollar's worth of any specific commodity because the cash can be used to purchase the commodity or something else.

Question 21

Workers are eligible for unemployment benefits if they:

A)voluntarily quit their job.
B)are out of work due to a labor dispute.
C)were discharged for willful misconduct.
D)have worked for at least one year.
E)are not actively seeking work.

Question 22

Which of the following is a unique aspect of benefits?

A)There is no question of legal compliance.
B)Organizations so typically offer them that they have become institutionalized.
C)It is less complex to understand the value of a dollar in a benefits package than in a salary.
D)Medical and retirement plans are not part of benefits.
E)Benefits, unlike direct compensation, are never mandated by law.

Question 23

_____ increases are provided as part of social security benefits for each year that the consumer price index increases.

A)Unemployment benefits
B)Cost-of-living
C)Disability benefits
D)Tuition
E)Retirement plan

Question 24

Which of the following was an amendment to the Social Security Act of 1935?

A)Descendant's insurance
B)Inability insurance
C)Estate insurance
D)Hospital insurance
E)Posterity insurance

Question 25

Which of the following is true about the Old Age, Survivors, Disability, and Health Insurance (OASDHI)program?

A)Only about 50% of U.S. employees are covered by the program.
B)Federal, state, and local government employees account for a high percentage of employees covered under this program.
C)There are no eligibility requirements to be met by an individual to receive benefits.
D)Old-age insurance benefits for fully insured workers begin at the age of 50.
E)High earners help subsidize benefit payments to low earners.

Question 26

Investment returns on qualified retirement funds are taxed.

Question 27

The _____ tax rate is the percentage of additional earnings that goes to taxes.

A)marginal
B)net
C)gross
D)incremental
E)maximum

Question 28

Which of the following is true about Social Security retirement benefits?

A)Benefits are subject to federal income tax.
B)An earnings test exists for those beneficiaries aged 50 and under.
C)Currently, an earnings test is required for those who have reached retirement age.
D)Benefits are entirely free from state income tax throughout the U.S.
E)An earnings test increases a person's incentive to retire.

Question 29

The state tax code requires that funds in the health care and dependent care accounts be earmarked in advance and spent during the plan year.

Question 30

Which of the following is true about social security as a benefits program?

A)It does not cover unemployment insurance.
B)It is the only plan that requires no employee to meet any eligibility criteria.
C)It covers mostly employees of railroad and federal, state, and local government employees.
D)It does not require minimum earnings to be fully insured.
E)It is entirely free from federal tax.

Question 31

Workers' compensation laws cover job-related _____.

A)pay raises
B)policy changes
C)quality linked incentives
D)injuries and death
E)tax benefits

Question 32

Increasing retiree health care costs (and the change in accounting standards)have led some companies to require white-collar employees and retirees to pay insurance premiums for the first time in history.

Question 33

Which of the following individuals is eligible for unemployment benefits?

A)Mark was discharged for willful misconduct.
B)Ricky is not actively seeking out work.
C)Marvin quit his job voluntarily.
D)Jane is right out of college and looking to start her career.
E)Mel lost her job due to outsourcing.

Question 34

The unemployment insurance program is financed largely through federal and state taxes on _____.

A)employees
B)employers
C)retired personnel
D)general public
E)employment agencies

Question 35

Which of the following is true about employee benefits?

A)Government involvement in benefits decisions is minimal.
B)Impact of legal regulations on benefits is greater than they are on direct compensation.
C)Understanding the value of a dollar in a benefits package is more complicated than understanding it in a salary.
D)The tax treatment of benefits programs is often less favorable for employees than the tax treatment of wages and salaries.
E)Employees are always aware of the benefits available to them as well as how to use them.

Question 36

The follow-up model is better than the physical fitness facility and health education programs in reducing risk factors.

Question 37

Which of the following is a reason for the growth of benefits as a method of employee compensation?

A)The tax treatment of benefits programs is less favorable for employees than the tax treatment of wages and salaries.
B)People prefer a dollar in cash over a dollar's worth of any specific commodity.
C)The legislations passed during the Great Depression were not conducive to benefits.
D)Benefits are covered by wage and price controls.
E)Groups of employees can typically receive a cost advantage over individuals.

Question 38

Flexible benefit plans are also known as the cafeteria-style plans.

Question 39

Which of the following is a major category of workers' compensation?

A)Sustainability income
B)Death of spouse benefits
C)Rehabilitative services
D)Housing care
E)Pension services

Question 40

Which of the following is a major objective of the unemployment insurance program?

A)To offset lost income during voluntary unemployment
B)To help those currently working to find new jobs in other fields
C)To provide an incentive for employees to stabilize employment
D)To make up for lost income during a labor dispute
E)To help employers find the right talent for reaching their business goals

Question 41

Which of the following is true about vesting rights?

A)It includes the right to a pension prior to retirement age.
B)Employers may choose to vest employees after five years.
C)The right to a pension remains only if the vested employee is with the employer until retirement.
D)Transferring employees as a means of avoiding pension obligations is allowed.
E)Multiemployer pension plans do not take into consideration vesting.

Question 42

Which one of the following is true about workers' compensation?

A)Worker compensation benefits focuses primarily on dealing with the increasing cost of living.
B)Unlike before, injuries that are self-inflicted and stem from intoxication are now covered as well.
C)Housing plans and pension services are included in worker compensation.
D)Self-funding of disability income by employers is restricted in most states.
E)Disability benefits that are part of workers' compensation are tax free.

Question 43

Which of the following increased the fiduciary responsibilities of pension plan trustees and established vesting rights and portability provisions?

A)Affordable Care Act
B)Social Security Act
C)Employee Retirement Income Security Act
D)Consolidated Omnibus Budget Reconciliation Act
E)National Labor Relations Act

Question 44

The _____ requires defined contribution plans holding publicly traded securities to provide employees with at least three investment options other than employer securities.

A)Pensions Act of 2008
B)Health Insurance Portability and Accountability Act of 1996
C)Consolidated Omnibus Budget Reconciliation Act of 1985
D)Employee Retirement Income Security Act of 1974
E)Pension Protection Act of 2006

Question 45

Which of the following is true about defined contribution plans?

A)They shift the investment risk to the employer.
B)They present greater administrative challenges to employers.
C)They promise a specific benefit level for employees upon retirement.
D)They are preferred more in smaller companies than larger ones.
E)They have become less common.

Question 46

Which of the following affects the amount of income that will be available to an employee upon retirement in defined contribution plans?

A)The number of times an employee shifted jobs
B)The number of employees covered in the plan
C)The size of the organization
D)The level of job performance
E)The age at which investments are made

Question 47

The _____ requires employers to permit employees to extend their health insurance coverage at group rates for up to 36 months following a qualifying event, such as a layoff.

A)Affordable Care Act (ACA)
B)Americans with Disabilities Act (ADA)
C)Employee Retirement Income Security Act (ERISA)
D)Consolidated Omnibus Budget Reconciliation Act (COBRA)
E)Equal Employment Opportunity Commission (EEOC)

Question 48

Defined contribution plans made it the responsibility of the _____ to make wise investment decisions for their retirement plans.

A)insurance companies
B)employer
C)Pension Benefit Guaranty Corporation (PBGC)
D)employee
E)U.S. Department of Labor

Question 49

According to the Employee Retirement Income Security Act (ERISA), the rights of employees to a pension upon retirement are known as _____.

A)vesting rights
B)portability rights
C)transfer rights
D)fiduciary rights
E)funding rights

Question 50

_____ plans permit employees to defer compensation on a pretax basis.

A)Supplemental benefit
B)Section 401(k)
C)Money purchase
D)Specified retirement benefit
E)Profit sharing

Question 51

Which of the following provides 12 weeks of unpaid absence from work to care for a seriously ill child, spouse, or parent if the organization has at least 50 employees living within a 75-mile radius?

A)Child and Family Services Improvement and Innovation Act
B)Child and Family Services Act
C)Child Support Recovery Act
D)Family and Medical Leave Act
E)Affordable Care Act

Question 52

Which of the following is true about private group insurance?

A)Concern for employee security explains the prevalence of employer-sponsored insurance plans.
B)Disability insurance programs are mandatory in all high-risk occupations.
C)Medical insurance programs are mandatory in all organizations.
D)Individuals have more bargaining power when negotiating over prices.
E)Group insurance rates are typically higher than individual rates because of economies of scale.

Question 53

_____ guarantees to pay employees a basic retirement benefit in the event that financial difficulties force a company to terminate or reduce employee pension benefits.

A)Employee Benefits Security Administration
B)Pension Benefit Guaranty Corporation
C)Employees' Compensation Appeals Board
D)Bureau of Labor Statistics
E)Equal Employment Opportunity Commission

Question 54

_____ plans do not promise a specific benefit level for employees upon retirement.

A)Defined benefit
B)Term benefit
C)Defined contribution
D)Flexi benefit
E)Cash balance

Question 55

Group insurance rates are typically lower than individual rates because:

A)risks cannot be pooled together in group insurance.
B)group insurance does not cover permanent disabilities.
C)of economies of scale.
D)it is exempt from taxes.
E)group insurance lacks guaranteed coverage.

Question 56

Which of the following is true of Consolidated Omnibus Budget Reconciliation Act (COBRA)?

A)It requires employers to extend coverage for 36 months after termination due to gross misconduct.
B)It requires employees to reduce the hours that lead to a gain of health insurance.
C)The beneficiaries of employees who still have their health insurance have access to the same services.
D)The beneficiaries of the employees get free coverage even if the employee has lost access to his health insurance.
E)The beneficiaries receive the advantage of purchasing coverage at the individual rate.

Question 57

Which of the following is true of the cost to the employer for workers' compensation?

A)The premium for high-risk occupations is lesser than the premium for low-risk occupations.
B)The premium is the same no matter which state the firm is located in if the injury is the same.
C)The compensation mostly covers minor injuries such as sprains and strains than dramatic injuries.
D)The compensation does not cover the cost for rehabilitation services.
E)The experience rating system primarily induces employees to take precautions at work.

Question 58

The workers' compensation cost to an employer is based on the:

A)type of competition faced.
B)employer's profitability.
C)employee's profitability.
D)employer's experience rating.
E)employee's experience rating.

Question 59

Which of the following statements is true about the Pension Benefit Guaranty Corporation (PBGC)?

A)It was created by the Consolidated Omnibus Budget Reconciliation Act (COBRA)of 1985.
B)It guarantees a complete pension benefit replacement.
C)It does not guarantee healthcare benefits.
D)It is not funded by an annual contribution per plan participant.
E)It allows payouts to be adjusted for cost-of-living changes.

Question 60

Which of the following is the largest single component of the elderly's overall retirement income?

A)Old age insurance
B)Private pensions
C)Earnings from assets
D)Disability insurance
E)Medical insurance

Question 61

Which of the following is true of the different methods used for benefits communication?

A)Web-based tools are not effective for personalized communications to individual employees.
B)Web-based tools have increased the need for benefits-related jobs in an organization.
C)Effective use of traditional approaches, like booklets, can have a large effect on employee awareness.
D)Written benefits will reach all working citizens as they are all literate.
E)Cafeteria plans limit employees' awareness and appreciation of what the employer provides.

Question 62

Which of the following is an example of a Pareto group?

A)20% of the employees, who account for 75% of the health care costs
B)10% of the employees, who account for 25% of the health care costs
C)50% of the employees, who account for 50% of the health care costs
D)80% of the employees, who account for 20% of the health care costs
E)60% of the employees, who account for 80% of the health care costs

Question 63

The Pregnancy Discrimination Act of 1978 requires employers to:

A)offer disability plans with pregnancy-related coverage.
B)treat pregnancy as they would any other disability when they do offer disability plans.
C)provide up to eight weeks of paid leave to the mother upon the birth of a child.
D)provide up to six weeks of unpaid leave to the father upon the birth of a child.
E)bear all the medical expenses related to the birth of their employee's child.

Question 64

Survey information on competitors' benefits packages and information on benefits costs are available from the _____.

A)public consultants
B)Pension Benefit Guaranty Corporation (PBGC)
C)Bureau of Labor Statistics (BLS)
D)Legal Information Institute (LII)
E)unemployment offices

Question 65

An organization introduces active employee wellness programs. Which of the following is likely to happen as a result of this?

A)More focus on physical exercise rather than on awareness issues
B)More health education programs designed to inform employees on health-related topics
C)Decrease in the number of counselors who handle one-on-one outreach programs
D)Increased focus on awareness and opportunity as well as support and reinforcement
E)Introduction of a center for physical fitness for employees to use anytime

Question 66

Which of the following benefits involve the highest of costs?

A)Legally required benefits
B)Medical and other insurance
C)Retirement and savings plans
D)Payments for time not worked
E)Supplemental pay

Question 67

Which of the following is true of passive employee wellness programs (EWPs)?

A)They have larger outreach programs aimed at individuals.
B)They provide ongoing support to employees motivate them to use the available resources.
C)Health education programs are an example of passive EWPs.
D)It does not include structural changes like having a fitness facility for employees.
E)It includes tailored programs with counselors guiding individuals.

Question 68

Which of the following media is most widely used by organizations to communicate benefit plans?

A)Enrollment materials (online or paper)
B)Group employee benefits communications with your vendor
C)Social media
D)Newsletters (online or paper)
E)Direct mail to home/residence

Question 69

Benefit plans that permit employees to choose the types and amounts of benefits they want are called _____.

A)defined benefit plans
B)flex-plans
C)standard benefits package
D)flexible spending accounts
E)traditional benefit plans

Question 70

Which one of the following is an active wellness program?

A)Raising awareness of health-related issues
B)Counselors providing tailored programs
C)Centers for physical fitness
D)Athletic trainers present in company gyms
E)Informing people on health-related topics

Question 71

Which of the following is a characteristic of a health maintenance organization (HMO)?

A)Exclusion of outpatient care
B)Provision of benefits on a reimbursement basis
C)Payment of physicians on a flat salary basis
D)Payment of physicians on a fee-for-service basis
E)Physicians paid depending on the number of patients seen

Question 72

In which of the following ways may staffing practices change in response to benefit cost controls?

A)Increase in benefits cost per hour by having employees work more hours with fixed benefits costs
B)Organizations having their employees classified as contractors rather than employees
C)Growth in the number of full-time workers
D)Rehiring previously laid off employees
E)Giving temporary workers pay for time not spent working

Question 73

In which of the following ways do PPOs differ from HMOs?

A)HMOs provide benefits on a prepaid basis.
B)PPOs focus on preventive measures and outpatient care.
C)PPOs aim at providing high quality health services at high costs.
D)HMOs contract with employees rather than employees.
E)Physicians are paid on a flat salary basis in PPOs.

Question 74

Which of the following media is least used by organizations to communicate benefit plans?

A)Enrollment materials (online or paper)
B)Group employee benefits communications with the benefits vendor
C)Group employee benefits communications with an organizational representative
D)One-to-one employee benefits counseling with an organizational representative
E)Direct mail to home/residence

Question 75

Employee wellness programs primarily aim at:

A)providing treatment for ailing employees.
B)managing health-care costs by helping employees in need.
C)providing rehabilitation services.
D)managing insurance-related queries from employees.
E)changing health-related behaviors both on and off work time.

Question 76

Which of the following is true of active wellness programs?

A)It includes the outreach and follow-up model.
B)It includes health education programs.
C)It includes fitness facility.
D)It does not include counselors help guide individuals.
E)It assumes that employee behavior change requires only awareness and not reinforcement.

Question 77

Which of the following is a characteristic of Preferred Provider Organizations (PPOs)?

A)They contract with employees instead of employers.
B)They do not make contracts with insurance companies.
C)They provide benefits on prepaid basis.
D)Employees often are required to use the preferred providers.
E)Employers may give incentives for employees to choose a participating physician.

Question 78

At the highest level of child care provision, firms provide employees with:

A)vouchers or discounts to buy products for their children.
B)child care at or near their worksites.
C)information about the costs of available child care.
D)home numbers of child care facilities in the area.
E)comprehensive information about the quality of available child care.

Question 79

Which of the following is true of Fair Labor Standards Act (FLSA)?

A)It requires exempt employees to be paid time-and-a-half for hours in excess of 40 per week.
B)It has led to Americans working lesser number of hours now as compared to earlier times due to rise in benefits.
C)It is more likely to cause employers to classify workers as independent contractors rather than employees.
D)It has led to part-time employees being more likely to receive benefits than full-time employees.
E)It increases the employer's obligation to provide legally required employee benefits.

Question 80

In the context of benefits, which of the following is true of the demographics of a workforce?

A)Younger employees are more concerned about medical coverage.
B)Younger employees are more concerned about life insurance.
C)Young, unmarried men often have more interest in benefits.
D)Young, unmarried women have less interest in high salary and wages.
E)Women of childbearing age care more about disability leave.