Question 1

Union contracts have an impact on the number of paid holidays offered by organizations.

Accepted Answer

Union contracts often include provisions for paid holidays for unionized employees. These contracts will stipulate the specific holidays that are recognized and compensated, as well as the rate of holiday pay for hours worked on those days. Therefore, union contracts can impact the number of paid holidays offered by organizations.

Question 2

Defined contribution pension plans offer greater security to employees because these benefits are guaranteed by the Pension Benefit Guaranty Corporation (PBGC).

Accepted Answer

Defined contribution pension plans do not offer guarantees from the PBGC, as the benefits and contributions are not managed by the employer but rather by the employee through their chosen investment options.

Question 3

The federal government mandates a minimum of two weeks of severance pay for older employees who are asked to retire early.

Accepted Answer

There is no federal mandate for severance pay for any employee, regardless of age or reason for separation. Severance pay is typically negotiated as part of an employment agreement or offered voluntarily by an employer.

Question 4

In companies that provide defined benefit plans, if the funding is inadequate to pay the benefits promised, the employees must make up the shortfall.

Accepted Answer

If the funding is inadequate to pay the benefits promised in a defined benefit plan, it is the responsibility of the employer to make up the shortfall, not the employees.

Question 5

Both short-term and long-term disability insurance provide continuing income protection for employees who become disabled and are unable to work.

Accepted Answer

Both short-term and long-term disability insurance provide income protection for employees who become disabled and cannot work.

Question 6

401(k) plans are unattractive to employees because these plans require them to pay higher income taxes during working years.

Accepted Answer

401(k) plans are actually attractive to many employees because they allow for tax-deferred contributions, meaning taxes are not paid on the money contributed until it is withdrawn during retirement. This can lower the taxable income during working years and potentially result in a lower tax burden overall.

Question 7

The Patient Protection and Affordable Care Act requires companies with 50 or more employees (who work 30 hours a week or more) to provide health care coverage or pay a penalty.

Accepted Answer

This is an accurate statement regarding the requirements of the Patient Protection and Affordable Care Act. Companies with 50 or more employees who work 30 hours a week or more must provide health care coverage or pay a penalty.

Question 8

An employee who is out of work and actively looking for employment can receive up to 26 weeks of pay through unemployment compensation.

Accepted Answer

This varies by state and can range from 12 to 30 weeks, with some states offering additional weeks under certain circumstances such as high unemployment rates or natural disasters.

Question 9

Workers cannot be required to make financial contributions for coverage under workers' compensation programs.

Accepted Answer

Workers' compensation programs are funded by employers' contributions, not workers'. It is illegal for employers to require employees to contribute to the cost of workers' compensation insurance.

Question 10

Employers are mandated to pay time-and-a-half to hourly employees who must work on holidays.

Accepted Answer

Federal law in the United States does not require employers to pay hourly employees extra for working on holidays. Payment for holiday work is generally a matter of agreement between the employer and the employee (or the employee's representative).

Question 11

Copayments are the portion of medical expenses paid by an insured individual for medical treatment.

Accepted Answer

Copayments require the individual to pay a portion of their medical expenses, usually at the time of service, in addition to any amount covered by their insurance plan.

Question 12

Only employees who have worked at least 12 months and 1,250 hours in the previous year are eligible for leave under the Family and Medical Leave Act (FMLA).

Accepted Answer

According to the FMLA, employees who have worked at least 12 months and 1,250 hours in the previous year are eligible for leave.

Question 13

Paid-time-off (PTO) plans combine all sick leave, vacation time, and holidays into a total number of hours or days that employees can take off with pay.

Accepted Answer

PTO plans do combine sick leave, vacation time, and holidays into a total amount of hours/days that employees can take off with pay.

Question 14

Workers in the private sector are far more likely to have a defined benefit plan than are workers in the public sector.

Accepted Answer

Workers in the public sector are more likely to have a defined benefit plan than are workers in the private sector.

Question 15

The Employee Retirement Income Security Act (ERISA) requires pension plans to periodically provide participants with information about plan features (such as vesting), funding, and benefit accrual amounts.

Accepted Answer

ERISA does require pension plans to provide participants with information about plan features (such as vesting), funding, and benefit accrual amounts through various disclosures, such as the Summary Plan Description (SPD) and Summary Annual Report (SAR).

Question 16

Employees are more likely to stay with employers who provide child-care and elder-care benefits.

Accepted Answer

Studies have shown that employees with access to child-care and elder-care benefits are more likely to stay with their employer. These benefits help employees balance their work and family responsibilities, leading to greater job satisfaction and loyalty.

Question 17

As per the provisions of the Affordable Care Act, companies in the United States are prohibited from increasing the fixed copay amount, decreasing the percentage, or decreasing the dollar amount that employees share for costs.

Accepted Answer

The statement is incorrect. The Affordable Care Act does not prohibit companies from increasing fixed copay amounts or decreasing dollar amounts that employees share for costs. However, it does set limits on out-of-pocket maximums for both individual and family policies.

Question 18

Divorced spouses and dependent children of former or current employees are offered extended health care coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Accepted Answer

COBRA provides continuation of group health coverage for qualified beneficiaries, including divorced spouses and dependent children, for a limited period of time after a qualifying event such as divorce or the death of the covered employee.

Question 19

Family and Medical Leave Act (FMLA) leaves are typically paid.

Accepted Answer

FMLA leaves are typically unpaid, although some employers may offer paid leave as part of their employee benefits package.

Question 20

Spousal exclusion provisions limit access to a company's health plan when an employee's spouse works for another company that offers health insurance.

Accepted Answer

Spousal exclusion provisions are intended to prevent duplicate coverage and limit costs for companies by preventing employees from adding their working spouse to their health plan if their spouse is eligible for coverage through their own employer.

Quiz 12: Managing Employee Benefits