Question 1

The Pension Benefits Guarantee Corporation guarantees both defined benefit plans and defined contribution plans.

Accepted Answer

ERISA established the Pension Benefits Guarantee Corporation (PBGC)to oversee and insure a pension if a plan terminates without sufficient funds.The PBGC guarantees only defined benefit plans,not defined contribution plans.

Question 2

Since leaves associated with the Family and Medical Leave Act do not require employers to pay salaries,employers are not financially affected.

Accepted Answer

FMLA leaves are usually unpaid,but they're not costless.The costs associated with hiring temporary replacements,training them,and compensating for their lower productivity can be considerable.

Question 3

There is no limit to the amount an employee can contribute pre-tax into a 401(k)plan each year.

Accepted Answer

Employees deduct any amount up to the legal maximum.The IRS sets an annual dollar limit,which is currently about $15,000.

Question 4

The more flexible a work schedule,the greater the effectiveness of the program.

Accepted Answer

Studies have found that highly flexible programs are actually less effective than less flexible ones.

Question 5

Studies indicate that employee assistance programs most frequently provide help with personal mental health issues and family problems.

Accepted Answer

EAPs are increasingly popular,with more than 60% of larger firms offering such programs.One study found that personal mental health was the most common problem addressed by employee assistance programs,followed by family problems.

Question 6

Firms that subsidize day care centers are hoping to recruit employees,reduce absenteeism,decrease turnover,and improve morale.

Accepted Answer

By establishing subsidized day care,employers assumedly can benefit in several ways.These include improved recruiting results,lower absenteeism,improved morale,favorable publicity,and lower turnover.

Question 7

When employers offer domestic partner benefits to employees,it means that employees' same-sex domestic partners are eligible to receive the same benefits as do the husband,wife,or legal dependent of one of the firm's employees.

Accepted Answer

When employers provide domestic partner benefits to employees,it generally means that employees' same-sex or opposite-sex domestic partners are eligible to receive the same benefits (health care,life insurance,and so forth)as do the husband,wife,or legal dependent of one of the firm's employees.

Question 8

Providing employees with iPhones,laptops,or other tools they need to get their jobs done in any location is known as workplace flexibility.

Accepted Answer

Workplace flexibility means arming employees with the information technology tools they need to get their jobs done wherever they are.

Question 9

In most states,workers' compensation benefits have no time limit,so injured employees may receive monetary and medical compensation for the duration of their employment.

Accepted Answer

Most states have a time limit-such as 500 weeks-for which benefits can be paid.

Question 10

Social Security provides health benefits to terminated employees and their families for 18 months following the employee's separation from the firm.

Accepted Answer

COBRA provides health benefits to retired and terminated employees and their families for 18 months following the employee's separation from the firm.Social Security provides income for retirees.

Question 11

Disability insurance provides income protection for salary loss due to illness or accident.

Accepted Answer

Disability insurance provides income protection for salary loss due to illness or accident.Benefits usually range from 50% to 75% of the employee's base pay if he or she is disabled.

Question 12

If an employee is injured at work due to a blatant disregard for company safety policies,the company is not required to pay workers' compensation.

Accepted Answer

For workers' compensation to cover an injury or work-related illness,one must only prove that it arose while the worker was on the job.It does not matter that he or she may have been at fault.

Question 13

Employers are prohibited from inquiring about an applicant's past workers' compensation history by the Americans with Disabilities Act.

Accepted Answer

ADA provisions generally prohibit employers from inquiring about an applicant's workers' compensation history.

Question 14

A primary benefit of 401(k)plans is that payments made by employees into the plan are pretax,so the employee pays no tax on those dollars until after he or she retires or withdraws the money.

Accepted Answer

Payroll deductions for 401(k)plans are pretax,so the employee pays no tax on those dollars until after he or she retires (or removes the money from the 401(k)plan).

Question 15

In addition to the funds contributed by employers,each state also contributes to funds for workers' compensation.

Accepted Answer

Every state has its own workers' compensation law and commission,and some run their own insurance programs.However,most require employers to carry workers' compensation insurance with private,state-approved insurance companies.Neither the state nor the federal government contributes any funds for workers' compensation.

Question 16

Flextime for most employees typically involves 1 hour of leeway before 9 a.m.or after 5 p.m.

Accepted Answer

In practice,most employers hold fairly close to the traditional 9:00 a.m.to 5:00 p.m.workday.Therefore,the effect of flextime for most employees is to give them about 1 hour of leeway before 9:00 a.m.or after 5:00 p.m.

Question 17

The Medicare Modernization Act allows employers to establish tax-free health savings accounts.

Accepted Answer

The Medicare Modernization Act of 2003 allows employers to establish tax-free health savings accounts (HSA).The assumption is that this will motivate employees to utilize less expensive health care options,and thus avoid big deductibles.

Question 18

The Consolidated Omnibus Budget Reconciliation Act requires the government to provide health insurance to terminated or retired employees and their families through the Medicare system.

Accepted Answer

The Consolidated Omnibus Budget Reconciliation Act requires most private employers to continue to make health benefits available to separated employees and their families for a time,generally 18 months after separation.The former employee must pay for the coverage.

Question 19

When groups of employees accept a temporary reduction in work hours in order to prevent layoffs,the employees are job sharing.

Accepted Answer

Job sharing allows two or more people to share a single full-time job.Work sharing refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs.

Question 20

Portability makes it easy for employees who leave one firm to work for another firm to take their accumulated pension funds with them.

Accepted Answer

Portability-making it easier for employees who leave the firm prior to retirement to take their accumulated pension funds with them-is enhanced by switching from defined benefit to defined contribution plans.

Quiz 13: Benefits and Services