Deck 12: The Benefit Determination Process

Question 1

In 1959,benefits were approximately _____ percent of payroll and in 2008,the percent was _____.

A) 30,50
B) 20,38
C) 25,43
D) 30,60

Answer 1

C

Question 2

The total cost of employee benefits in the U.S.is _____ dollars.

A) two trillion
B) one trillion
C) five trillion
D) one billion

Answer 2

C

Question 3

The first issue in setting up a benefits package is:

A) who should be protected or benefited.
B) how much choice should employees have among benefits.
C) how should benefits be financed.
D) are benefits legally defensible.

Answer 3

A

Question 4

All of the following factors are reasons for the growth of benefits except:

A) foreign competition.
B) unions.
C) cost effectiveness of benefits.
D) government impetus.

Question 5

A _____ is an employer-provided subsidized basic medical plan with buy-up options.

A) full-defined contribution
B) menu-driven health-care plan
C) managed competition
D) health savings account

Question 6

_____ is not an example of an approach to customer-driven health care.

A) Tiered networks
B) Cafeteria plans
C) Managed competition
D) Full-defined contribution

Question 7

Advantages of employer sponsored life and health insurance include all of the following except:

A) favorable tax treatment.
B) lower rates.
C) employees can choose coverage levels.
D) easy qualifying standards.

Question 8

_____ is/are the primary reason why businesses adopt flexible benefit programs.

A) Cost savings
B) Increased employee understanding
C) Federal requirements under EEO laws
D) Maintaining external equity

Question 9

All of the following are advantages of flexible benefits except:

A) costs of benefits are contained.
B) employee understanding of benefits increases.
C) introduction of new benefits is less costly.
D) administrative expenses increase.

Question 10

A type of benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called _____ plan.

A) a select choice
B) a no-deductible
C) flexible benefit
D) flat dollar benefit

Question 11

In the _____ benefit package,a package is designed with the average employee in mind.

A) shared
B) standard
C) cafeteria-style
D) federal

Question 12

The typical employee can recall _____ percent of the benefits they receive.

A) almost 50
B) less than 15
C) over 30
D) 40

Question 13

For the past 15 years,health care costs have risen an average of nearly _____ percent per year.

A) 16
B) 3
C) 12
D) 6

Question 14

While approximately _____ percent of fulltime U.S.employees receive paid vacations and holidays,_____ percent of part time workers receive these benefits.

A) 80,60
B) 90,36
C) 70,50
D) 90,60

Question 15

Surveys show that the most highly valued benefit is:

A) dental plans.
B) a pension.
C) paid vacation and holidays.
D) medical insurance.

Question 16

Which of the following benefits is rated lowest by employees?

A) Long-term disability
B) Sick pay
C) Pensions
D) Dental insurance

Question 17

Which of the following is a major benefits planning and design issue?

A) Benefit adequacy
B) Competitiveness of benefits
C) Cost effectiveness
D) Diversity compliance

Question 18

Which of the following benefits are not mandated by state or federal legislation?

A) Workers' compensation
B) Pensions
C) Social security
D) Unemployment insurance

Question 19

Which of the following is not a benefit administration issue?

A) Benefit adequacy
B) Benefit financing
C) Degree of choice among benefits
D) Legal defensibility of benefits

Question 20

A study of the factors affecting MBA students' job choice showed _____ was ranked as least important.

A) geographic location
B) promotion opportunities
C) employee benefits
D) opportunity for advancement

Question 21

Alternatives to financing benefit plans include all of the following except:

A) contributory
B) 401K
C) noncontributory
D) employee financed

Question 22

All of the following are cost containment practices except:

A) probationary periods.
B) physical exams of all new hires.
C) copay.
D) seeking competitive bids for benefit delivery.

Question 23

Various studies have found that only two specific benefits curtailed employee turnover: _____ and _____.

A) vacation days;dental plans
B) profit-sharing plans;life insurance
C) retirement benefits;paid vacations
D) pensions;medical coverage

Question 24

The biggest trend in cost-containment is:

A) benefit limitations.
B) HMO's.
C) outsourcing.
D) higher deductibles.

Question 25

_____ is the most frequent method of benefit communication.

A) An orientation session
B) On-line benefits information
C) An employee benefit handbook
D) A meeting with supervisor

Question 26

_____ is/are not a method of determining employee benefit preferences.

A) Demographic data
B) Competitor pay surveys
C) Employee surveys
D) A supermarket plan

Question 27

One reason employee benefits may have value to employers is there is some evidence that _____ programs raise productivity by as much as 25%.

A) employee assistance
B) elder care
C) childcare
D) flexible benefits

Question 28

_____ allows employees who have resigned or were laid off to continue to purchase health insurance under their employer's plan.

A) Health Maintenance Act 1973
B) FLSA 1938
C) Tax reforms of 1982,1986
D) COBRA 1984

Question 29

_____ is/are one of the most preferred benefits.

A) Stock plans
B) Profit sharing
C) Shorter working hours
D) Early retirement

Question 30

_____ mandates 12 weeks of leave for all workers at companies that employ 50 or more people.

A) Health Maintenance Act 1973
B) FLSA 1938
C) FMLA 1993
D) COBRA 1984

Question 31

A major approach to increasing employee awareness of health care choices and cost is:

A) customer-driven health care.
B) cafeteria plans.
C) large deductibles.
D) large co-pays.

Question 32

The best way for companies to decide whether or not the company can afford a benefit is on a _____ basis.

A) package
B) first dollar deductible
C) discounted cost
D) cost-centered

Question 33

All of the following except _____ are factors affecting employer choices of components of a benefits package.

A) relationship to total compensation costs
B) legal requirements
C) equity
D) competitor offerings

Question 34

All of the following are advantages of managing benefits via the internet or intranet except:

A) employees have fewer interactions with HR staff.
B) benefit handbook cost is minimized.
C) benefit transactions costs are reduced.
D) fewer employee benefits staff are required.

Question 35

Which of the following would an employer be least likely to use if they sought to reduce benefit costs?

A) Dual coverage
B) Benefit ceiling
C) Coinsurance
D) Defined benefit plans

Question 36

The most widely used benefit survey is conducted by:

A) the U.S.Chamber of Commerce.
B) Watson-Wyatt.
C) the Society for Human Resource Management.
D) the American Compensation Association.

Question 37

Most employers say that their primary benefits objective is to:

A) obtain employee cooperation in controlling benefit costs.
B) increase employee knowledge of benefit costs.
C) encourage employee responsibility for their own financial security.
D) increase employee understanding of plan objectives.

Question 38

A customer-driven health care plan that offers employees a choice of medical plans that include systems of varying cost is the:

A) full-defined contribution.
B) health savings account.
C) managed competition.
D) tiered networks.

Question 39

Which of the following benefits has been found to increase productivity in organizations?

A) Child care
B) Employee stock options
C) Health care
D) Short- and long-term disability care

Question 40

Which of the following is not a part of the cost-centered approach for deciding to provide a benefit?

A) Checking compliance
B) Evaluating competitiveness of current benefits
C) Examining employee preferences
D) Basing benefits on historical costs

Question 41

While health care costs have risen rapidly during the past two decades,pension costs have been declining due to the strong stock market.

Question 42

Before World War II,hourly employees were given time off for holidays but without pay.

Question 43

If adverse selection occurs for one or more benefits in a flexible benefits plan,those benefits may be dropped from the plan.

Question 44

Cost pressure related to increasing diversity of the workforce is one of the reasons companies are offering flexible benefit plans.

Question 45

When future cost containment of a benefit may be a problem,the benefit should be offered on a noncontributory basis.

Question 46

Flexible benefits allow organizations to control benefit costs.

Question 47

The biggest current trend in health care is market-based or customer-driven.

Question 48

Flexible benefit plans are complex requiring many choices that lead to poor employee understanding of benefits.

Question 49

Most employers prefer to avoid providing benefits on a defined-level basis.

Question 50

Though employer provided benefits cost less due to group rates,they are taxed the same as wages and salaries.

Question 51

Employers prefer the noncontributory approach to financing benefits because this allows greater control of costs.

Question 52

The percent of employers willing to absorb rising benefit costs has remained about the same the past few years.

Question 53

The favorable tax status granted to many benefits is safe from the threat of recurrent tax reform proposals.

Question 54

Today,benefits are twenty-five percent of payroll costs.

Question 55

General Motors spends more than twice as much for employee health insurance as for the steel that goes into each car they produce.

Question 56

The average per hour cost of benefits is higher in state and local governments than in the private sector.

Question 57

According to a recent SHRM survey,pay is the top factor driving job satisfaction.

Question 58

Benefits can be an effective tool to attract and retain employees when benefits address needs of a target group.

Question 59

Employee benefits may be accurately described as a costly entitlement of the American workforce.

Question 60

For most benefits,providing a level of coverage is more costly to employers than providing a benefit at a specific cost level.

Question 61

Employees' preferences for various benefits can be predicted well from demographic data.

Question 62

List some examples of customer-driven healthcare benefits packages.

Question 63

The only two benefits shown to reduce turnover are pensions and medical coverage.

Question 64

What is the importance of the demographic approach in determining employee preferences?

Question 65

What is the "bandwagon" effect in benefits administration?

Question 66

Dual coverage is when a portion of insurance premiums is paid by the employee.

Question 67

What is the role of the government impetus in the development of employee benefits?

Question 68

Which are the four major administration issues regarding in setting up a benefit package?

Question 69

The Employment Retirement Income Security Act (1974)requires employers to offer some form of pension.

Question 70

Which if the most popular empirical method of identifying individual preferences in benefits packages?

Question 71

What can administrators do to control the increasing benefits costs?

Question 72

What are the major disadvantages of a flexible benefits package?

Question 73

What are some of the common cost-containment practices with regard to benefits administration?

Question 74

Illustrate the issue of communication of benefits to the employees.

Question 75

The ideal approach to determining employee benefit preferences is a flexible benefit plan.

Question 76

According to available evidence,a good strategy for a company to remain non-union is to offer the same benefits as those provided by unionized firms.

Question 77

The goal of employee benefits should be to keep turnover to near zero.

Question 78

The "bandwagon" effect is when an employer offers a new benefit offered by a competitor without careful consideration.

Question 79

Employees feel their benefits are very fair when they are given extensive communications about benefits but plan design is left to experts.

Question 80

Though commonly believed by managers,there is only anecdotal evidence supporting the belief that higher benefit levels increase employee retention.