Deck 12: The Benefit Determination Process

Question 1

A recent survey shows that the majority of employers are responding to increased benefit costs by______
A)requiring employees to pay higher deductibles and copays.
B)raising premiums.
C)dropping health care plans.
D)relying on the Patient Protection and Affordable Care Act

A) requiring employees to pay higher deductibles and copays.
B) raising premiums.
C) dropping health care plans.
D) relying on the Patient Protection and Affordable Care Act

Answer 1

A

Question 2

Tiered networks,managed competition and health savings accounts are all examples of choices for _____________

A) menu-driven health care.
B) flexible benefits.
C) cafeteria plans.
D) customer-driven health care.

Answer 2

D

Question 3

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

Answer 3

C

Question 4

Across five studies ranking preference for benefits,_________ had the lowest average rating.

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

Question 5

Which of the following is not a disadvantage of flexible benefit programs?

A) Administrative burdens and expenses increase.
B) Adverse selection.
C) New benefits are more difficult to introduce.
D) Flexible benefits are subject to nondiscrimination requirements in Section 125 of IRS code.

Question 6

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

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

Question 7

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

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

Question 8

In 1959,benefits were approximately _____ percent of payroll and in 2010,the percent was _____.

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

Question 9

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.

Question 10

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

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

Question 11

Which of the following is not a major benefits planning and design issue?

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

Question 12

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 13

Surveys show that the most highly valued benefit is:

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

Question 14

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 15

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 16

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 17

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 18

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 19

_____ 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 20

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 21

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 22

A recent survey shows employees ranking employee benefits __________ in explaining job satisfaction.

A) first
B) second
C) third
D) last

Question 23

The __________ act requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship.

A) Patient Protection and Affordable Care Act
B) Family and Medical Leave Act
C) Health Maintenance Organization Act
D) No act requires these actions.

Question 24

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

A) Child care
B) Employee stock options
C) Health care
D) No benefit has been found to increase productivity.

Question 25

A primary benefits objective of most employers 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 26

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

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

Question 27

_____ 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 28

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

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

Question 29

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 30

_____ 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 31

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 32

_____ 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 33

Employers prefer contributory benefits financing for all except which of the following?

A) more favorable tax treatment
B) A "free good," is less valuable to an employee.
C) Employees have little personal interest in controlling the costs of a free good.
D) It helps control benefit costs.

Question 34

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 35

_____ is/are one of the most preferred benefits.

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

Question 36

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 37

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 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

_____ 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 40

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 41

There is good evidence that a sound benefits program reduces turnover.

Question 42

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

Question 43

A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.

Question 44

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 45

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

Question 46

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 47

The biggest recent trend in health care is consumer-driven health care.

Question 48

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

Question 49

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

Question 50

The biggest trend in cost-containment is:

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

Question 51

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 52

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

Question 53

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

Question 54

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

Question 55

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

Question 56

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

Question 57

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

Question 58

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

Question 59

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

Question 60

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

Question 61

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

Question 62

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

Question 63

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 64

Most employers are pleased that 3 Americans in 10 stayed in a job they
wanted to leave simply because they could not give up their health-care coverage.

Question 65

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

Question 66

requires employers to offer some form of pension.

Question 67

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

Question 68

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

Question 69

One study suggests that benefits focusing on work/life balance lead to greater worker involvement in productivity initiatives.

Question 70

A major reason for the proliferating cost of benefit programs is the narrow focus of benefit administrators.

Question 71

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

Question 72

If adverse selection occurs for one or more benefits in a flexible benefits plan,the higher cost will likely lead to those benefits being dropped from the plan.

Question 73

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

Question 74

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

Question 75

Flexible benefits allow organizations to control benefit costs.

Question 76

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

Question 77

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

Question 78

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

Question 79

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

Question 80

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