Deck 12: Indirect Compensation: Employee Benefit Plans

Question 1

In providing health and cash payments to disabled workers and their families,workers' compensation is second in size only to the nation's pension fund.

Answer 1

False

Question 2

Disability coverage provides a supplemental one-time payment when death is accidental,or when employees are disabled.

Answer 2

False

Question 3

In an effort to reform the U.S.health-care system,Congress passed the Patient Protection and Affordable Care Act in 2010.

Answer 3

True

Question 4

An incentive for employers to begin and maintain pension plans is that the government defers taxes on the pension contributions and their earnings.

Question 5

A mature firm with well-established products and substantial market share will probably offer low base pay and benefits but high incentives.

Question 6

The perceived value of benefits rises when employers introduce choice through a flexible benefits package.

Question 7

Income-maintenance laws were enacted to provide employees and their families with income security in case of death,disability,unemployment,or retirement.

Question 8

In determining the competitiveness of benefits,senior management tends to focus mainly on value,while employees are more interested in cost.

Question 9

An aging population and an increase in obesity are part of the major factors driving increases in the cost of healthcare.

Question 10

The Patient Protection and Affordable Care Act of 2010 requires states to create and maintain health care exchanges in which health insurance providers compete for customers on equal terms.

Question 11

Pre-existing condition clauses are still common.

Question 12

Because U.S.employers pay most of the nation's health care premiums,over time such increases may make them less competitive in global markets.

Question 13

ERISA does not require employers to offer a pension plan.

Question 14

Companies on average pay approximately 40 of payroll on overall employee benefits and 20 percent on voluntary benefits.

Question 15

Although disability benefits traditionally were divided into salary continuation,short-term disability,and long-term disability,combined disability management programs now merge all three.

Question 16

Strategies to contain the high costs of health care are largely being ignored.

Question 17

Achieving cost competitiveness assures that employees will perceive the benefits program as valuable to them.

Question 18

Under COBRA,following a worker's death or divorce,the employee's family has the right to buy group-rate health insurance for as long as three years.

Question 19

To ensure covered workers will receive their accrued benefits even if they get fired,ERISA created the Pension Benefit Guaranty Corporation.

Question 20

LTD recipients typically receive no more than 60 percent of their base pay,until they begin receiving pension benefits.

Question 21

A recent MetLife survey showed that 73 percent of employees who were highly satisfied with their benefits are also satisfied with their ________?

A) Salaries
B) Jobs
C) Supervisors
D) Pensions

Question 22

States have the option to use state unemployment compensation resources to make full wage replacement available to parents who leave employment after the birth or adoption of a child.

Question 23

Which act covers private-sector employees over age 21 enrolled in noncontributory (100% employer-paid)retirement plans who have one year's service?

A) COBRA
B) HIPAA
C) ERISA
D) ADA

Question 24

Defined contribution plans do not appeal to employers.

Question 25

Generally,employees of nonagricultural,private-sector firms are entitled to benefits for work-related accidents and illnesses leading to temporary or permanent disabilities under:

A) workers' compensation.
B) ERISA.
C) the Social Security Act.
D) the Federal Unemployment Tax Act.

Question 26

The Age Discrimination in Employment Act has eliminated mandatory retirement at any age.

Question 27

A growing number of companies are giving employees direct access to information about their direct compensation,but not indirect compensation.

Question 28

Which of the following should be considered by firms when determining their overall benefit plan?

A) Are the type and level of benefits consistent with our long-term business plan
B) Are we meeting the needs of employees
C) What legal requirements must we satisfy
D) All of the above

Question 29

The benefits of this act are based on a percentage of average weekly earnings and are available for up to 26 weeks.

A) Administrative Procedure Act
B) Social Security Act
C) Balanced Budget Act
D) Federal Unemployment Tax Act

Question 30

Cash balance plans are portable when an employee leaves,but they do not vest any sooner than traditional pension plans.

Question 31

Which law offers full coverage for retirees,dependent survivors,and disabled persons insured by 40 quarters of payroll taxes on their past earnings or earnings of heads of households?

A) Federal Unemployment Tax Act
B) Social Security Act
C) Workers' compensation Act
D) Employee Retirement Income Security Act

Question 32

Which act extended the 1.45% Medicare payroll tax to all wages and self-employment income?

A) Balanced Budget Act
B) Administrative Procedure Act
C) Omnibus Budget Reconciliation Act
D) National Health Planning and Resources Development Act

Question 33

Regardless of whether a plan is a defined-benefit plan or defined-contribution plan,employees will not know what the purchasing power of their pension checks will be,because interest rates are variable.

Question 34

The doctrine of _____ holds that an individual must pay taxes on benefits with monetary value when he/she receives them.

A) antidiscrimination
B) constructive receipt
C) equal benefits taxation
D) tax shifting

Question 35

Every unemployed worker's benefits are "charged" against one or more companies; therefore the more money paid out on behalf of a firm,the higher is the unemployment insurance rate for that firm.

Question 36

National survey data now indicate that people are more attached and committed to organizations that offer family-friendly policies because they benefit personally from the policies.

Question 37

The anti-discrimination rule holds that employers can obtain tax advantages only for those benefits that do not discriminate in favor of:

A) white males.
B) stockholders.
C) highly compensated employees.
D) younger employees.

Question 38

Social Security is a pay-as-you-go system.Payroll taxes earned by current workers are distributed to pay benefits for those who are already retired.

Question 39

In determining the competitiveness of benefits,senior management tends to focus mainly on:

A) cost.
B) value.
C) security.
D) worth.

Question 40

The theory underlying the cafeteria benefits approach is simple: Instead of all workers at a company getting the same benefits,each worker can pick and choose among alternative options cafeteria style.

Question 41

The U.S.health insurance system is based primarily on group coverage provided by:

A) employees.
B) employers.
C) the government.
D) communities.

Question 42

When given a choice,employees are moving toward _____,even though they are more expensive,showing that they are willing to pay more for freedom of choice.

A) CDHPs
B) POSs
C) HMOs
D) PPOs

Question 43

Which of the following is NOT an area of payment covered by workers' compensation?

A) Payments to employers while injured workers are recovering
B) Payments to replace lost wages
C) Medical treatment and rehabilitation costs
D) Retraining to perform a different type of work

Question 44

Currently,_____ percent of states have workers' compensation laws.

A) 10
B) 50
C) 75
D) 100

Question 45

The law requiring companies with at least 20 employees to make medical coverage available at group insurance rates for up to 18 months after an employee leaves the job is:

A) ERISA.
B) HIPAA.
C) COBRA.
D) FMLA.

Question 46

Which of the following requires that health plans not disclose patient identifiers?

A) salary information
B) cost of insurance premiums
C) spousal information
D) protected health information

Question 47

In this type of managed care health insurance plan,in-network care comes from a specified group of physicians and hospitals,patients can pay extra to get care from outside the network,and there generally is no gatekeeper.

A) Flexible spending account
B) Preferred provider organization
C) Health reimbursement account
D) Health maintenance organization

Question 48

The 2010 plan intended to reform the U.S.healthcare system is called the:

A) Preferred Provider Organization Act
B) Health Maintenance Organization Act
C) Patient Protection and Affordable Care Act
D) Equal Pay Act

Question 49

This law provides that,following a worker's death or divorce,the employee's family has the right to buy group-rate health insurance for as long as three years.

A) Health Insurance Portability and Accountability Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Employee Retirement Income Security Act
D) Fair Labor Standards Act

Question 50

The "gatekeeper" in a "managed care" health insurance plan is the:

A) primary care physician.
B) insurance cost monitor.
C) the employee.
D) the HR representative.

Question 51

This type of insurance is usually yearly renewable term insurance and typical coverage is one to two times the employee's annual salary.

A) Common stock
B) Workers' compensation
C) Protected health
D) Group life

Question 52

Which act was enacted to protect the interests of employee-benefit-plan participants and their beneficiaries by requiring the disclosure to them of financial and other information concerning the plan?

A) Employee Retirement Income Security Act
B) Health Insurance Portability and Accountability Act
C) Consolidated Omnibus Budget Reconciliation Act
D) Family and Medical Leave Act

Question 53

In this type of managed care health insurance plan,there is no deductible,and the nominal fees generally range from $5 to $30 per visit depending on the service performed.

A) Preferred provider organization
B) Medical underwriting
C) Health maintenance organization
D) Point-of-service plan

Question 54

_____ programs typically provide a core of basic life coverage and then permit employees to choose greater coverage.

A) Flexible benefit
B) Defined-benefit
C) Defined-contribution
D) Point-of-service

Question 55

What is driving the increasing costs of healthcare?

A) Passage of the health care exchanges.
B) Aging population and an increase in obesity.
C) Increasing numbers of legal immigrants.
D) Rising cost of childcare.

Question 56

All state workers' compensation laws share all of the following features EXCEPT:

A) all job-related injuries and illnesses are covered.
B) coverage is provided regardless of who caused the injury.
C) a worker's loss is usually covered fully by the insurance program.
D) payments are usually made through an insurance program.

Question 57

An individual or group health plan that provides or pays the cost of medical care may not use or disclose:

A) An employers ability to deny coverage for a pre-existing condition.
B) Prohibiting discrimination.
C) Protected health information.
D) None of the above.

Question 58

Under COBRA,employers with at least how many employees must comply:

A) 60
B) 10
C) 49
D) 20

Question 59

Which of the following allows companies to make medical coverage available at group rates for as long as 18 months after the employee leaves?

A) COBRA
B) HIPAA
C) ERISA
D) ADA

Question 60

Money set aside by employers to cover _____ has become the nation's largest source of capital.

A) workers' compensation claims
B) employee benefits
C) year-end tax obligations
D) pension obligations

Question 61

Once viewed as an expense with little return,what type of policies are now endorsed by a growing number of executives as an investment that pays dividends in morale,productivity,and ability to attract and retain top-notch talent?

Question 62

_____ is not legally required,and,because of unemployment compensation,many firms do not offer it.

A) Retirement pay
B) Short-term disability
C) Severance pay
D) Cost shifting

Question 63

The average retiree gets about _____ percent of his/her retirement income from Social Security.

A) 12
B) 40
C) 67
D) 95

Question 64

Briefly explain the provisions of the Pension Protection Act (PPA)of 2006.

Question 65

Write a short note on the Pension Benefit Guaranty Corporation.

Question 66

Why do many companies offer domestic partner benefits,regardless of the employee's sexual orientation and marital status?

Question 67

Who are contributions to pension funds typically managed by?

Question 68

In 2010 PBGC paid about _____ in benefits owed to retirees and the surviving beneficiaries because their pension plans could not.

A) $1 million
B) $35 million
C) $2 billion
D) $5.5 billion

Question 69

Explain the purpose of the unemployment insurance system.

Question 70

Limiting medi-care payments to what Medicare would have paid for in the absences of a group health plan is another example of what is referred to as:

A) cost attainment
B) flag posting
C) cost shifting
D) early medical retirement benefits

Question 71

Which agency acts as an insurance company,collecting annual premiums from companies with defined-benefit plans that spell out specific payments upon retirement?

A) Federal Deposit Insurance Corporation
B) Employee Benefits Security Administration
C) Pension Benefit Guaranty Corporation
D) Federal Retirement Thrift Investment Board

Question 72

What is workers' compensation? Mention some common features that all state workers' compensation laws share.

Question 73

The methods for costing benefits include:

A) Annual cost of benefits for all employees
B) Cost per employees per year
C) Cents per hour
D) All of the above

Question 74

What is the broad objective of the design of compensation programs?

Question 75

Which of the following is not an approach widely used to express the cost of employee benefits and services?

A) National salary index
B) Cents per hour
C) Percentage of payroll
D) Cost per employee per year

Question 76

Describe some measures that firms have taken to gain tighter management control over the cost of health care.

Question 77

In regard to pensions,employees who have not worked at a company long enough to be _____ are not entitled to any benefits.

A) vested
B) promoted
C) given a performance review
D) join the union

Question 78

The type of private pension plan in which an employer promises to pay a retiree a stated pension is a:

A) defined-benefit plan.
B) defined-performance plan.
C) defined-retirement plan.
D) defined-contribution plan.

Question 79

The type of pension plan that offers all employees the same,steady annual credit toward an eventual pension is a(n):

A) equity-purchase plan.
B) cash-balance plan.
C) defined benefit plan.
D) profit sharing plan.

Question 80

Write a short note on the Consolidated Omnibus Budget Reconciliation Act of 1986.