Deck 13: Managing Employee Benefits

Question 1

Which of the following statements is true of part-time employees?

A) Anti-discrimination laws enable part-time employees to receive the same benefits as full-time employees are offered.
B) Most employers in the United States do not provide any part-time employee benefits, except some paid time off.
C) Part-time employees typically make no effort to attain benefits because they are covered by their spouse's or parents' insurance policies.
D) Most employers provide part-time employees medical benefits, but no time-off benefits because these employees already work on a short schedule.

Answer 1

B

Question 2

Which of the following is a disadvantage of providing flexibility in benefit choice?

A) The flexible benefits plans do not cover higher-risk employees.
B) There is a risk that employees may choose an inappropriate benefits package.
C) The flexible benefits plans are typically discriminatory in nature.
D) There is a risk that these plans would increase the attrition rate.

Answer 2

B

Question 3

Every company is required to pay an unemployment tax that is based on the:

A) type of industry and its seasonal fluctuations in employment.
B) total number of employees covered under workers' compensation.
C) employer's total payroll cost.
D) number of claims filed by ex-employees.

Answer 3

D

Question 4

A flexible benefits plan typically:

A) allows employees to contribute a percentage of their basic pay to buy benefits in addition to the employer's basic package.
B) continuously updates the benefit options provided by an employer according to the demands and requirements of employees.
C) provides flexibility in choosing the time of the year when employees would like to make use of the benefits provided to them.
D) allows employees to select the benefits they prefer from options established by the employer.

Question 5

Employee benefits can be constructively viewed as a(n):

A) intangible plan that does not affect the costs borne by a company.
B) government-mandated instrument.
C) cultural necessity.
D) tool for competitive advantage.

Question 6

Jim, a 23 years old factory worker, was seriously injured when a hammer fell on his head while he was at his work station. Jim hadn't worn his safety helmet at the time of the accident even though the safety rules of the company necessitate the use of safety helmets at all times. Which of the following is true?

A) Jim can claim Social Security benefits.
B) Jim will not receive workers' compensation because he is responsible for the injury.
C) Jim will receive severance payment when he returns to work after his injuries are healed.
D) Jim will receive workers' compensation even though he is responsible for the injury.

Question 7

Workers' compensation programs are typically funded:

A) at the expense of the employer.
B) at the expense of all the stake holders.
C) by the value-added taxes levied by the federal government on specific goods.
D) by the contributions made to state governments by both employees and employers.

Question 8

What is the minimum retirement age for employees to receive maximum Social Security benefits?

A) 64
B) 65
C) 66
D) 67

Question 9

Which of the following best describes workers' compensation?

A) Compensation provided to workers after retirement
B) Benefits provided to persons injured on the job
C) Benefits provided to workers who survive terminal diseases
D) Total pay package that includes both basic wages and benefits

Question 10

Claudia, a legal assistant, has been vested by her employer after having worked with the employer for ten years. This implies that:

A) she will receive the amounts contributed by both the employer and herself when she retires.
B) she can transfer her entire pension fund balances to a new employer's plan if she moves to a new company.
C) she will receive the maximum amount of pension available under her company's retirement plan when she retires.
D) she will receive the funds her employer has contributed to the retirement plan only if she is a member of the company while retiring.

Question 11

A situation in which only higher-risk employees choose and use certain benefits under a flexible benefits plan provided by employers is referred to as _____.

A) concentration of risk
B) perceived vulnerability
C) adverse selection
D) skewed distribution effect

Question 12

Which of the following is a legally-required employee benefit that employers must provide?

A) Wellness programs
B) Unemployment compensation
C) Education assistance
D) Public-service leave

Question 13

In developed countries, _____ are far more likely to provide compulsory health plans for people, regardless of employment status.

A) privately owned organizations
B) governments
C) non-governmental organizations
D) unions

Question 14

Medicare is the health insurance program that was implemented by the government in 1965 to provide medical care primarily for:

A) disabled workers.
B) government employees.
C) people over the age of 65.
D) cancer patients.

Question 15

During times of widespread economic hardship:

A) employees who are not actively seeking employment become ineligible for unemployment compensation.
B) the government increases the number of weeks during which workers receive unemployment compensation.
C) employers stop contributing to unemployment compensation funds.
D) weekly payments as part of the unemployment compensation are reduced by half.

Question 16

Which of the following is a voluntary employee benefit that employers may provide in addition to legally required benefits?

A) Medical plans
B) Workers' compensation
C) Education assistance
D) Social security

Question 17

A problem with providing flexibility in benefit choice is that:

A) it does not cover higher-risk employees.
B) it increases the risk of adverse selection by employees.
C) it is typically discriminatory in nature.
D) it increases attrition rates.

Question 18

A vendor that provides administrative services to an organization is referred to as _____.

A) part-time employee.
B) whistle-blower.
C) mediator.
D) third-party administrator

Question 19

Which of the following is a disadvantage of Web-based benefits administration?

A) It can easily overwhelm employees.
B) It increases the expenses of benefits administration.
C) It usually leads to the involvement of a third-party administrator.
D) It limits the self-service options for employees.

Question 20

Cost sharing plans:

A) involve employers sharing the costs of government-mandated health insurance plans with the government.
B) require employees to pay a larger proportion of their health benefits costs.
C) require insurance firms to share profits with employers who purchase insurance plans.
D) allow employees to track their benefits balances as and when required.

Question 21

Preferred provider organizations (PPO) and health maintenance organizations (HMO) _____.

A) primarily aim at reducing health care costs paid by employees by putting the burden on the employers.
B) does not provide health care services to the private sector organizations.
C) increase the cost borne by companies providing health care benefits.
D) are the most common forms of managed care.

Question 22

Linda works in a company that pays for the medical insurances of all its employees. However, every time she visits her physician, she is charged $25. Her medical insurance covers the rest of the fee. This is an example of:

A) managed care.
B) consumer-driven health plan.
C) a copayment.
D) an HMO.

Question 23

Which of the following is one of the approaches taken by employers offering health care benefits to control and reduce their costs?

A) Decreasing deductibles and copayments
B) Decreasing high-deductible plans
C) Increasing employee contributions
D) Providing unlimited family coverage

Question 24

According to the 1986 amendment to the Age Discrimination in Employment Act (ADEA):

A) most employees cannot be forced to retire at a specific age.
B) workers should contribute to the defined benefit plans.
C) equal treatment should be given to older workers in severance situations.
D) employers can be sued by employees for age discrimination.

Question 25

A pension plan in which retirement benefits are based on the accumulation of annual company contributions plus interest credited each year is called a(n) _____ plan.

A) auto-enrollment
B) defined benefit
C) cash balance
D) defined contribution

Question 26

_____ typically consists of approaches that monitor and reduce medical costs through restrictions and market system alternatives.

A) Utilization review
B) Managed care
C) A medical review program
D) A medical option plan

Question 27

Meredith, the general manager of an IT firm, is planning to introduce certain new strategies to control and reduce the health care benefit costs to her company. Which of the following is most likely to be included in her list of strategies?

A) Decreasing copayments
B) Eliminating high-deductible plans
C) Switching to consumer-driven health plans
D) Avoiding managed care

Question 28

Which of the following is a provision of the Patient Protection and Affordable Care Act?

A) Requires firms with 30 or more employees to provide health care coverage
B) Requires only employers to contribute and maintain a minimum essential coverage
C) Extends dependent coverage up to age 26
D) Eliminates coverage for preventive services

Question 29

Hugo, an experienced electrician who has recently quit his job, wants to join a company that provides a defined benefit pension plan. Which of the following employers is Hugo most likely to join?

A) A start-up wind-energy firm
B) A printing company with 60 employees
C) A unionized public firm with 4,000 employees
D) A privately owned international multi-cuisine restaurant

Question 30

Karen, a diabetic patient, has quit her job as an internal auditor with a bank and has joined another company as the assistant CFO. Which of the following laws would enable Karen to switch her health insurance plan from her former employer to her new employer?

A) ERISA
B) FMLA
C) ADEA
D) HIPAA

Question 31

Which of the following is true of defined benefit retirement plans?

A) The investment risk is borne by the employee.
B) The amount of benefit paid at retirement is pre-determined.
C) They are most common in private sector and nonunionized workforces.
D) They typically do not guarantee benefits.

Question 32

A company that has been providing generous defined benefit pension plans to all its retirees for the past 50 years is now facing bankruptcy and is unable to pay the pension amount. Which of the following statements is true of the given scenario?

A) The PBGC will pay the retiree benefits from the solvency fund.
B) The company must decrease the amount of pension payments based on the available amount of money in the pension fund.
C) The employees will have to forfeit their pension benefits.
D) The company can suspend pension payments until the pension fund has been fully recovered.

Question 33

Glen, a line manager, is informed that his company would be introducing a stock purchase plan for employees. This implies that:

A) the employer will provide company stocks to employees as incentives.
B) Glen will be given a few company stocks for free, which he can later sell at the market rate.
C) Glen can buy shares in the company at a discount.
D) Glen would be provided financial counseling on the purchase and sale of stocks.

Question 34

Which of the following is true about the Older Workers Benefit Protection Act (OWBPA)?

A) It has set the maximum retirement age for employees to be eligible for retirements benefits at 60 years.
B) The Age Discrimination in Employment Act was enacted in 1990 as an amendment to the OWBPA.
C) It sets forth certain conditions that must be met when older workers are offered early retirement.
D) The Older Workers Benefit Protection Act did not cover employees in the government sector.

Question 35

What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to health care?

A) Employers with more than 50 employees must provide medical insurance for all full-time employees.
B) Most employers with 20 or more employees must offer extended health care coverage to certain groups of employees after they leave the organization.
C) Widowed or divorced spouses and dependent children of former or current employees need not be offered health care coverage.
D) Employees who are terminated need not be offered health care coverage.

Question 36

The Health Insurance Portability and Accountability Act (HIPAA):

A) requires employers with more than 50 employees to provide medical insurance for all full-time employees.
B) requires employers to offer health coverage to contingent workers if the workers pay 50% of the employer's cost.
C) states that employers must offer extended health care coverage to employees even after they leave the organization.
D) allows employees to switch health insurance from one company to another to get new health coverage, regardless of preexisting conditions.

Question 37

_____ is the federal law that ensures the privacy of employee medical records.

A) HIPAA
B) ADEA
C) ERISA
D) FMLA

Question 38

How do insurance plans offered by employers benefit employees even when employers do not pay any of the costs?

A) Companies that do not contribute to insurance costs must offer special benefits instead.
B) Employees are offered insurance plans at lower rates through group programs.
C) Employers, though they appear to have no costs, make some indirect legal contribution.
D) The amount paid by employees are tax-free only when employers make no contribution.

Question 39

In a _____, an employer makes contributions to help employees cover their health-related expenses.

A) consumer-driven health plan
B) cash balance plan
C) self-directed health plan
D) managed care plan

Question 40

Long-term disability insurance:

A) is a mandatory security benefit for non-governmental employers with over 50 employees.
B) typically covers those employees who are disabled, yet continue to work either full-time or part-time in the company.
C) typically pays for long term care such as nursing home, assisted living, and home health care for disabled persons.
D) typically provides continuing income protection for employees who become unable to work because they are disabled.

Question 41

Developed nations are far more likely to provide compulsory, government-sponsored health plans for all citizens.

Question 42

Which of the following statements is true of the Family and Medical Leave Act?

A) It requires that employers allow employees to take a maximum of 12 weeks of paid leave for caring for a spouse, child, or parent with a serious health condition.
B) It requires that employers allow employees to take a maximum of 12 weeks of unpaid, job-protected leave for foster care placement of a child.
C) It requires that employers allow employees to take a maximum of 12 weeks of unpaid leave during the birth of a child but not for the adoption of a child.
D) It requires that employers allow employees to take a maximum of 12 weeks of paid, job-protected leave babysitting their 5-7 year old children during their vacations.

Question 43

Clara, a receptionist, goes to work despite being sick to earn extra pay for not taking any sick leave. The extra pay she'll receive is called:

A) sick leave rebate.
B) benefit pay.
C) well pay.
D) sick-leave pay.

Question 44

Organizations rarely view benefits as an effective retention tool because employees generally have very little understanding of the benefits provided by their employers.

Question 45

A program that combines sick leave, vacations, and holidays into a total number of hours or days that employees can take off with pay is called a(n) _____ plan.

A) consolidated time off
B) flexible benefits
C) accumulated leave
D) paid time-off

Question 46

Legally required benefits make up more than half of the total cost of benefits.

Question 47

Dennis, the HR head of a company, is trying to convince the top management of the company to approve an elder-care assistance program. Which of the following, if true, would be a strong argument in favor of the program?

A) The program would exempt the company from other employee benefits.
B) The program would help in employee retention.
C) The program would be a contribution to the society.
D) The program would reduce the number of existing lawsuits against the company.

Question 48

Increasing the retirement age for employees is a strategy to keep the Social Security program insolvent.

Question 49

The Family and Medical Leave Act (FMLA) defines a _____ as one requiring in-patient, hospital, hospice, or residential medical care or continuing physician care.

A) medical leave event
B) serious health condition
C) life-threatening illness
D) qualifying event

Question 50

Andy has been asked to report at a war zone to serve as an officer in the army. Which of the following statements is true in the context of the given situation?

A) Andy's employer is required by federal law to pay him the difference between his military pay and his civilian pay.
B) Andy's employer is required to give him military leave. But, if Andy has been called for training, he should use his personal vacation days rather than take leave.
C) Andy's employer can require him to take three weeks of paid vacation while he is deployed.
D) Andy's employer is not required by law to continue to pay him either in total or in part.

Question 51

The Worker Adjustment and Retraining Notification Act (WARN) of 1988:

A) requires employers to give 20 days' notice of mass layoff or plant closings.
B) requires employers to give 30 days' notice of mass layoff or plant closings.
C) mandates the payment of severance pay to employees.
D) does not mandate the payment of severance pay to employees.

Question 52

The concept of no-fault insurance implies that an injured worker would not receive benefits if the accident was the employee's fault.

Question 53

In the U.S., part-time employees are most likely to receive health and life insurance benefits and paid time off and least likely to receive retirement benefits.

Question 54

Employees are generally more satisfied with an employer that provides fewer benefits but does a better job of explaining them.

Question 55

Which of the following is a typical abuse-control measure used by employers to keep employees from taking excessive time off around holidays?

A) Employees are required to work the first and last scheduled workdays around the holiday.
B) Only employees with significant seniority are allowed to combine holidays with vacation days to extend the time off.
C) Employees are paid extra for working the days immediately following and preceding a holiday.
D) Employees are allowed to "bank" holidays and take the banked days off during times when schedules are less busy.

Question 56

Why do a relatively low percentage of men take paternity leave?

A) Men who are not single parents are not covered in the Family and Medical Leave Act.
B) Employers can deny FMLA leave if the employee is not replaceable, and men tend to hold jobs that are more critical than women do.
C) It is not considered socially acceptable for men to stay home for child-related reasons.
D) Only one parent per family can take FMLA leave and they are usually taken by the mother.

Question 57

The United States is the only major developed nation that does not guarantee workers paid sick leave.

Question 58

Most benefits, except for paid time off, are taxed as income to employees.

Question 59

Increases in employer expenditures for benefits are growing faster than increases in wages for employees.

Question 60

The Family and Medical Leave Act of 1993 requires that employers allow eligible employees to take a maximum of _____ during any 12-month period.

A) 12 weeks of paid leave
B) 24 weeks of paid leave
C) 12 weeks of unpaid leave
D) 24 weeks of unpaid leave

Question 61

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

Question 62

Unpaid leaves of absence generally do not cost the firm much beyond continued benefits for the employee on leave.

Question 63

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

Question 64

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

Question 65

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

Question 66

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

Question 67

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

Question 68

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

Question 69

FMLA leave is typically paid and employers are also required to cover the workload for employees on family leave.

Question 70

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

Question 71

According to the Patient Protection and Affordable Care Act, enrollment in health coverage is mandatory for every citizen.

Question 72

Research has shown that absenteeism because of illness is lower when employees are not paid for sick time.

Question 73

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

Question 74

Long-term disability insurance provides continuing income protection for employees who become disabled and are unable to work.

Question 75

Violations of the Employee Retirement Income Security Act (ERISA) can lead to disqualification of a pension plan.

Question 76

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

Question 77

An employee would have limited access to a company's health plan if the employee's spouse works for another company that offers health insurance.

Question 78

Copayments are paid by insured individuals to cover their entire medical expenses.

Question 79

Copayments are costs that an insured pays for medical treatment.

Question 80

Divorced spouses and dependent children of former or current employees should be offered extended health care coverage under the COBRA.