Deck 12: Managing Employee Benefits

Question 1

Amber has been recently transferred from the Toronto headquarters of her firm to the European office. She is used to having 10 days of vacation per year from her employer. She is surprised to learn how much vacation per year her European colleagues get. Which of the following ranges is the most likely?

A)an average of 20 days of vacation per year-double the Canadian firm's practice
B)more than 30 vacation days a year
C)exactly the same amount of vacation as in Canada, but no family leave
D)no vacation, only statutory holidays off

Answer 1

B

Question 2

Canadian chief executives have identified their top health and productivity issues. Which of the following is one of these issues?

A)the velocity of change in the workplace
B)the impact of technology on workers
C)costs associated with worker health care and disability
D)mental health

Answer 2

C

Question 3

In most developed countries, which of the following provides health and retirement benefits for citizens?

A)employers
B)the government
C)workers
D)charities

Answer 3

B

Question 4

Which of these best defines employee benefits?

A)non-efficient employee compensation
B)employer social activism
C)pay-for-performance
D)indirect reward

Question 5

Which of the following statements accurately describes the relationship between part-time employees and benefits?

A)They must receive mandatory benefits, but are forbidden by law to receive voluntary benefits.
B)They usually receive pro-rated medical benefits, but no time-off benefits because they already work a reduced schedule.
C)They usually receive benefits that are lesser in amount than those received by full-time employees, assuming they receive any at all.
D)They must receive benefits if the company offers full-time employees benefits.

Question 6

When it comes to pension plans, what does the Canada or Quebec Pension Plan require self-employed workers to contribute?

A)the employee portion of the payments
B)both employee and employer portions of the payments
C)the employer portion of the payments
D)no portions; pay solely to self-administered RRSPs

Question 7

Some benefits employers in Canada are required to provide by law. Which of the following describes these benefits?

A)mandated
B)obligatory
C)regulated
D)compulsory

Question 8

Charlene, the director of compensation, wishes to estimate the administrative costs of the current benefits program so that she can use that as a basis for evaluating new administrative methods. Which of the following is a calculation Charlene needs to make?

A)HR staff time spent on benefit issues multiplied by their pay
B)benefits costs by employee group
C)the multi-year pattern of benefits as a percentage of payroll
D)benefits usage per full-time equivalent employee

Question 9

Which is a major advantage of benefits to employees?

A)Benefits are not reported to Revenue Canada.
B)Benefits are generally taxed at a lower rate than earned income.
C)Benefits are generally not taxed as income.
D)In provinces where income tax applies, benefits are calculated as a tax deduction.

Question 10

Who administers Employment Insurance?

A)the individual provinces
B)the WCB
C)the employers
D)the federal government

Question 11

In one type of retirement plan, the employer makes an annual payment to an employee's pension account. Which of the following types is it?

A)vested
B)non-contributory pension
C)defined contribution
D)defined benefits

Question 12

How are Canada or Quebec Pension Plan benefits funded?

A)an employer tax based on the employer's "experience rating"
B)a tax on employee wages and salaries paid equally by employers and employees
C)general tax revenues
D)deductions from the employee's paycheque which are paid to the federal government

Question 13

On average, which percentage of employers' payrolls do the costs of benefits represent?

A)60 percent
B)10 percent
C)40 percent
D)20 percent

Question 14

Tamika is an ambitious 22-year-old single woman who is on the job market for the first time after graduating with her bachelor's degree in business. She is a top-quality candidate for whom employers are competing. All other factors being equal, which sorts of benefits will the employer Tamika finds most attractive provide?

A)excellent retirement and pension benefits
B)portable, flexible benefits
C)medical and dental insurance
D)top-quality elder-care benefits

Question 15

Which of the following is NOT part of approaching benefits strategically?

A)cost control and measurement
B)benefits as a competitive advantage
C)mandatory benefit offerings
D)benefits design

Question 16

Which of the following do employers view as a strategic goal of benefits?

A)reducing employee absenteeism and turnover
B)minimizing the tax consequences for employees
C)providing the benefits that are mandated by government
D)cutting the per-employee compensation cost

Question 17

As the director of compensation for a multi-plant bakery, Jeff is reviewing his company's benefit design. Which question will he NOT be obliged to address?

A)Which mandatory benefit can be dropped with the least negative impact on employee attitudes?
B)What is the firm receiving in return for each benefit provided?
C)How flexible should the package of benefits be?
D)How much total compensation should be offered?

Question 18

Betty is interviewing for a job with two different firms. One is a promising start-up company; the other is a mature firm that has operated in her home community since 1953. The job description and salary are identical. Which of the following statements expresses what Betty can realistically expect?

A)The benefits will be the same at both companies since benefits are based on salary.
B)The start-up firm will have more generous benefits.
C)The mature firm will have more generous benefits.
D)The mature firm will likely offer no benefits because older firms are encountering cost pressures.

Question 19

Which of the following benefits does the Canada or Quebec Pension Plan NOT provide?

A)survivor
B)retirement
C)Old Age Security
D)disability

Question 20

According to Statistics Canada reports, which of the following is the largest cost component of health-care benefits?

A)life insurance
B)nursing care
C)dental care
D)prescription drugs

Question 21

Which of the following best determines eligibility to receive either Canada or Quebec Pension Plan benefits?

A)age 65 years or older
B)contribution to either or both of these plans over the years
C)employment in Canada for a minimum of five years
D)Canadian residency.

Question 22

Which of the following statements best explains what a SUB program is?

A)It allows businesses with seasonal subcontractors to provide some supplemental coverage instead of regular workers' compensation.
B)It is a payment beyond unemployment compensation that is made by employers to prevent lawsuits by laid-off employees.
C)It provides for severance pay in those cases where a unionized company closes down.
D)It is a benefit, negotiated by a union, requiring an employer to contribute to a fund that pays laid-off workers an amount over and above regular unemployment compensation.

Question 23

Which of the following benefits are NOT mandated by government legislation?

A)employment insurance
B)Old Age Security
C)workers' compensation
D)retirement plans

Question 24

Several of the benefits identified here are provided by Employment Insurance. Which benefits are NOT covered by it?

A)maternity benefits
B)compassionate care benefits
C)unemployment benefits
D)disability benefits

Question 25

Which employee amount is the basis for calculating Canada or Quebec Pension Plan contributions?

A)pensionable earnings
B)gross earnings
C)net earnings
D)taxable earnings

Question 26

The Old Age Security pension program provides a monthly retirement benefit. On which of the following is it based?

A)age and number of years worked
B)age and earnings during years worked
C)number of years worked and earnings during that time
D)age and time lived in Canada

Question 27

Which range of weeks shows the minimum to maximum number of weeks for which regular Employment Insurance benefits can be paid?

A)16-32
B)14-45
C)12-60
D)20-45

Question 28

Which of the following is the best explanation of Guaranteed Income Supplement?

A)a monthly benefit offered by provincial governments to low-income seniors
B)a benefit based on a person's age and years as a Canadian resident
C)taxable income in the hands of the recipient
D)an additional monthly benefit paid to seniors who receive the OAS

Question 29

Which is the basis for determining the number of weeks of basic Employment Insurance benefits that may be paid?

A)unemployment rate in the region and amount of insurable earnings accumulated during the qualifying period
B)number of days worked during the qualifying period and the unemployment rate in the region
C)unemployment rate in the region and the amount of insurable hours accumulated during the qualifying period
D)number of days worked and the amount of insurable earnings accumulated during the qualifying period

Question 30

What of the following is the basis for determining the employer's cost of unemployment compensation?

A)the number of claims filed by workers who leave
B)the type of business and its known seasonal fluctuations
C)the number of covered employees
D)the value of employee insurable earnings

Question 31

Under the terms of the Canada Health Act, there are two basic kinds of health institutions. Which of the following are they?

A)public and non-profit; federally run
B)public and for-profit; provincially run
C)private and non-profit; provincially run
D)private and for-profit; provincially run

Question 32

How is workers' compensation usually funded?

A)by employers who pay premiums to the WCB
B)through the Social Security Administration
C)by a tax levied on employers by provincial governments based on employer payroll size
D)by the federal government

Question 33

Which of the following is the best way to characterize Canada's health-care system?

A)available to all Canadians
B)guided by the Canada Medicare Act
C)administered by the federal government
D)privately funded by employees

Question 34

Which of the following provides a definition of workers' compensation?

A)the employee's total pay package: wages plus benefits
B)benefits provided to persons injured on the job
C)the pay and benefits package provided to employees who are laid off for financial reasons
D)law-suit judgments awarded to workers injured on the job

Question 35

Which criterion governs a worker's eligibility for workers' compensation?

A)being employed by a federally insured employer
B)being able to prove that the accident was caused by employer negligence
C)suffering a work-related injury or illness
D)not having contributed to the cause of the injury

Question 36

Which government-sponsored program is an employee non-contributory plan, funded solely through general tax revenues?

A)workers' compensation
B)Old Age Security
C)Employment Insurance
D)Canada or Quebec Pension Plan

Question 37

Workers' compensation is a mandatory insurance system pertaining to work-related injuries. Which of the following adjectives also applies?

A)no cost
B)guaranteed
C)co-coordinated
D)no-fault

Question 38

Which of the following industries is likely to have the highest workers' compensation premiums?

A)landscaping
B)logging
C)poultry farming
D)meat and fish processing

Question 39

To qualify for Canada or Quebec Pension Plan disability payments, a person must meet three of the following criteria. Which criterion is inapplicable?

A)has made enough contributions to the CPP/QPP
B)is prevented by the disability from working at any job on a regular basis
C)has a long-lasting disability
D)got the disability as the result of a workplace accident

Question 40

Various types of survivor benefits are available from the Canada or Quebec Pension Plan. Which of the following is NOT a recognized benefit?

A)the death benefit
B)the children's benefit
C)the funeral benefit
D)the survivor's pension

Question 41

An employer may administer a collection of individual RRSPs for its employees. Which of the following kinds of pension plans is it handling?

A)group RRSP
B)defined-contribution plan
C)defined-benefit plan
D)deferred RRSP plan

Question 42

The income security of future retirees is endangered by a number of factors; however, which of the following is NOT a concern?

A)the greater fragility of workplace pension plans
B)the limited scope of public pensions
C)the steady increase in the age of retirement
D)the shift to more precarious jobs

Question 43

Which of the following is a kind of retirement program where an employee is promised a pension amount based on age and service?

A)group RRSP
B)deferred profit-sharing plan
C)defined-benefit plan
D)deferred-contribution plan

Question 44

All jurisdictions agree on the age before which employees cannot be forced to retire. Which age?

A)age 60
B)age 70
C)age 65
D)at no specific age

Question 45

Which of the following accurately characterizes retirement benefits established and funded by employers and employees?

A)perception of lower value by older employees
B)voluntary on the part of employers regardless of the number of employees
C)regulated by provincial laws rather than federal legislation
D)mandatory for employers with more than 100 employees

Question 46

Employees have the right to receive benefits from their pension plans if they remain with their employer a certain period. Which of the following refers to this pension right?

A)vesting
B)qualifying
C)entitling
D)portability

Question 47

Hugo, 45, has been laid off by his employer who is moving his job as a customer service representative to a company in India. Hugo figures he will need to work at least 20 more years. So far, he has little money in savings set aside for retirement. Hugo wants to find a job at an employer that is likely to have a pension plan. Which of the following employers would be most likely to have a pension plan?

A)a unionized manufacturing firm with 4450 employees
B)a printing company with 63 employees
C)a world-famous restaurant in a popular vacation spot
D)a start-up pharmaceuticals research firm

Question 48

According to the textbook, how do many employees feel about their health-care benefits?

A)familiar with the benefits offered by their employers
B)grateful for the benefits they receive from the employer
C)likely to take them for granted
D)desperately concerned about losing their benefits

Question 49

Which of the following lists best outlines some of the services provided by provincial medicare?

A)cancer treatment, over-the-counter medications, and diagnostic services
B)diagnostic services, vaccinations for children, and treatment procedures
C)dental care, diagnostic services, and preventive services
D)over-the-counter medications, diagnostic services, and preventive services

Question 50

Which of the following is the type of employer-sponsored pension plan preferred by younger, shorter service employees?

A)defined-benefit plan
B)defined-contribution
C)group RRSP
D)deferred profit-sharing plan

Question 51

As director of benefits for a large manufacturing firm, you have been asked to research the negative effects of reducing or eliminating the health-care benefits the firm currently provides for its numerous retirees. You should address all the following issues in your report except one. Which is it?

A)resistance by retirees
B)ethical issues
C)government-mandated reinstatement of health care
D)potential lawsuits by retirees

Question 52

In one type of pension plan, all the funds for pension benefits are provided by the employer. Which of the following terms applies to this type of plan?

A)defined-benefit
B)vested
C)defined-contribution
D)non-contributory

Question 53

In a contributory pension plan, which of the following pays the money for pension benefits?

A)the employees through pre-tax deductions from pay
B)the employer
C)the federal government
D)the employees and the employer

Question 54

Once the vesting period has been reached, pension fund contributions by both the employer and the employee are locked in. In which of the following circumstances can they be withdrawn by the employee?

A)when age 60 is reached
B)when a disability has developed
C)on termination
D)on retirement

Question 55

Which of the following statements represents a major advantage of a deferred profit-sharing plan?

A)Employees are usually offered a choice in how the funds are invested.
B)The funds are secured from company revenues.
C)Contributions and any investment income earned remains tax sheltered until retirement.
D)Employees are guaranteed a fixed benefit upon retirement.

Question 56

Which of the following is NOT a factor that contributes to increases in the costs of employee health benefits?

A)increased use of services
B)double-digit inflation of drug plans
C)inefficient management of health plans
D)aging population

Question 57

Organizations are taking various initiatives to reduce retiree health-care benefits. Some are identified below; however, which possible action will organizations NOT be taking?

A)increasing the qualifying age for health benefits
B)capping health-care services
C)increasing deductibles and co-payments
D)reducing medical coverage

Question 58

Which of the following is a pension feature that allows employees to move their pension benefits from one employer to another?

A)mobility
B)vesting
C)portability
D)transferability

Question 59

From the point of view of retirees, which of the following kinds of pension plans are associated with risk?

A)defined-contribution
B)non-contributory plans
C)contributory plans
D)defined-benefit

Question 60

As a result of employee concerns about their ability to make up pension funding shortfalls, many employers have chosen a different kind of plan. Which kind of plan do they now favour?

A)non-contributory
B)defined benefit
C)contributory
D)defined contribution

Question 61

When it comes to health spending accounts, which of the following is NOT truly an advantage to the employer?

A)assists in attracting and retaining high-calibre employees
B)has positive impacts on employee morale
C)does not have to be funded by the employer
D)results in a better understanding of benefit costs

Question 62

In one type of benefit plan, the employer makes defined contributions to each employee's "account," and the employee decides how to use these to cover health-related expenses. Which type of plan is this?

A)contributory health insurance
B)self-directed health
C)individual HMO
D)health spending account

Question 63

Angela, who lives in Alberta, recently turned down an attractive job offer as assistant director of marketing from a firm in Ontario because it would not provide assistance in finding a job for her husband or assistance in buying a new home in Ontario, where house prices are much higher than in Alberta. Which limitation does the Ontario firm seem to be subject to?

A)fails to offer benefits for domestic partners
B)shows discrimination against women
C)lacks a relocation assistance program
D)fails to view Angela as a desirable prospective employee

Question 64

Suppose that some employees have become disabled and unable to work. Which of the following benefits will employers provide to ensure that the employees have continuing income protection?

A)workers' compensation
B)disability insurance
C)life insurance
D)employment insurance

Question 65

A health-care provider contracts with an employer or an employer group to provide health-care services to employees at a competitive rate. Which of these terms refers to such a health-care provider?

A)public/private health organization (PPH)
B)preferred provider organization (PPO)
C)health maintenance organization (HMO)
D)contractual medical organization (CMO)

Question 66

In one kind of managed care plan, services are provided for a fixed period on a prepaid basis. Which of the following terms refers to such a plan?

A)public/private health organization (PPH)
B)contractual medical organization (CMO)
C)preferred provider organization (PPO)
D)health maintenance organization (HMO)

Question 67

Roger's mother is in the early stages of Alzheimer's disease, and Roger's father died of Alzheimer's. Roger, who is 59, is concerned that he will develop this disease, as well. Which of these possible benefits would Roger be most pleased if his company offered?

A)flexible spending accounts
B)employee wellness programs
C)elder-care assistance
D)an integrated disability management plan

Question 68

Managed health care may grow in Canada for several reasons. Nonetheless, one of the following reasons works against that trend. Which is it?

A)increasingly long wait-lists for surgery
B)inability of some people to afford medical care
C)increased government interference in the relationship between doctors and patients
D)tax increases

Question 69

Companies are using many approaches to controlling health-care benefits costs, including three of the following. Which possible approach is most likely to be ignored?

A)offering health promotion strategies
B)shifting some of the costs to employees through increased co-payments
C)determining the source of the medical condition
D)requesting more government funding

Question 70

Which of the following statements best describes HMOs?

A)HMOs make employees generally pleased with their access to care because the employees rely heavily on their primary-care physician.
B)HMOs charge the employer a flat rate per employee or per family.
C)HMOs, when extensively used, permit great cost savings.
D)HMOs have a strong record of focusing on innovation in health care.

Question 71

Which of the following statements conveys the major concern about Canada's health-care system developing into a two-tiered system?

A)The number of alternative medical services will be greatly reduced.
B)Government will increasingly shift responsibility for health care to businesses.
C)Only those who can afford medical care will be able to enjoy such services.
D)Businesses will be encouraged to reduce or eliminate benefits.

Question 72

As director of HR, you are discussing cost pressures on the company with the CEO and the CFO. Two possible options are suggested: reducing the amount of next year's base pay raises for employees or reducing the health-benefit program for employees. The CEO and CFO ask you which reduction will cause the most dissatisfaction among employees. With research in mind, which prediction will you share with them?

A)Employees are so unaware of their health benefits that they won't even notice reductions.
B)Employees will be most upset by lower raises.
C)Employees will be most upset by reduced health benefits.
D)Employees will be just as upset with either lower raises or reduced health benefits.

Question 73

Mike is taking a job at a growing computer-manufacturing company. One reason he took the job is because if he bought stock in the company, the company would match the amount he invested. Mike feels that this would allow him to benefit from the company's growth, over and above getting his regular salary and other benefits. Which kind of plan does Mike find appealing?

A)stock purchase
B)employee ownership
C)investment
D)matching investment

Question 74

Which of the following best outlines the role of long-term disability insurance?

A)allows employees to accrue sick leave for time-limited emergency needs
B)provides ongoing income protection for employees who cannot work because they are disabled
C)is a mandatory security benefit for non-governmental employers with over 50 employees
D)pays for long-term care, such as nursing home, assisted living, and home health care

Question 75

Which of the following statements expresses a criticism of the U.S. model of managed health care?

A)More government interference is apparent.
B)There is inferior medicine with less choice for patients.
C)Prices are negotiated with hospitals and physicians, resulting in inconsistent pricing.
D)Competing HMOs spend millions of dollars on business matters instead of focusing on innovations in health care.

Question 76

Paula, the director of HR for a major bank, is designing a tuition aid program for the employees. She wants to assess whether the program will have a good return on investment for the bank. To do so, she is building in a long-range assessment system. Which of the following aspects will the program NOT likely measure?

A)internal promotions of employees who have used tuition aid
B)employee satisfaction with the program
C)retention of employees who have used tuition aid
D)degrees earned by employees on tuition aid

Question 77

Medical costs can be monitored and reduced by using restrictions and market system alternatives. Which of the following is a system associated with these approaches?

A)monitored health plans
B)medical review programs
C)medical option plans
D)managed care

Question 78

Maxine is a single mother with an entry-level management job. She needs to consider her child's future welfare if she should die before her child is self-supporting. Her child is now three years old. Maxine has learned that her company offers group life insurance and does so at the level of coverage most companies typically offer. Which of the following is the typical level of coverage?

A)as high a level of insurance as she wishes to pay for
B)20 years of annual salary
C)10 years of annual salary
D)one and one-half years of annual salary

Question 79

Which of the following is NOT a typical offering of a company child-care benefit?

A)after-school programs, jointly offered with a school system
B)on-site day care
C)higher pay for employees with multiple children
D)sick-child programs jointly offered with hospitals

Question 80

For employers, health spending accounts have two main advantages. The first is that the employees are engaged in determining health-care usage. Which of the following statements presents the second advantage?

A)Employees are well prepared to make decisions about how to spend their health-care dollars.
B)Employees use these funds extensively for wellness programs, especially for weight loss and smoking cessation.
C)The accounts can be used as a cost control measure.
D)Health-care usage rates typically fall significantly.