Question 1

How do cafeteria-style plans increase costs for employers?

Accepted Answer

Cafeteria-style plans allow employees to choose the benefits they value most, which can lead to higher costs for employers as they may need to offer a wider range of options and cover more expensive benefits that employees select.

Question 2

Benefit plans that permit employees to choose the types and amounts of benefits they want from a set of alternatives are called

Accepted Answer

Cafeteria-style plans allow employees to choose from a set of options to customize their benefit package to their individual needs and preferences. Preferred provider plans, defined-benefit plans, flexible spending accounts, and cash balance plans do not offer this level of flexibility and choice.

Question 3

An organization employs Rick,a bilateral amputee,to work as a research analyst.When Sarah,the organization's chief advisor,becomes aware of this,she argues that the organization is going to experience legal challenges.According to the Americans with Disabilities Act,which of the following will strengthen Sarah's argument?

Accepted Answer

Switching to a risk-based policy after hiring Rick could be seen as discriminatory under the ADA, as it may be perceived as targeting his disability.

Question 4

Organizations must communicate benefits information to employees so that they will

Accepted Answer

Employees need to be aware of the value of their benefits so that they can make informed decisions when choosing a benefits package or when considering whether to stay with the organization. Additionally, when employees appreciate the value of their benefits, they are more likely to be satisfied and motivated in their work.

Question 5

_____ strictly limits the definition of "independent contractors," so that employers cannot avoid legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee.

Accepted Answer

The Internal Revenue Service (IRS) strictly limits the definition of "independent contractors" to prevent employers from avoiding legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee. The IRS uses a set of tests to determine whether a worker is an employee or an independent contractor, such as the degree of control the employer has over the worker's work and the worker's investment in facilities and equipment.

Question 6

Which of the following actions help organizations reduce the cost of health care benefits offered to employees?

Accepted Answer

Shifting from traditional health insurance plans to PPOs and CDHPs can help organizations reduce the cost of health care benefits offered to employees. This is because PPOs and CDHPs have lower premiums and can also encourage employees to make more cost-conscious decisions about their healthcare. Other options listed, such as increasing deductibles and coinsurance or expanding coverage, may actually increase costs for organizations and employees. Paying some or all of the difference in cost between an HMO or PPO plan may be a helpful option, but it may not be enough to significantly reduce overall healthcare costs. Choosing traditional health insurance over HMOs and PPOs is less likely to reduce costs, as these typically have higher premiums and less flexibility.

Question 7

Which of the following strategies can be legally adopted by organizations looking to restructure the workforce to minimize the expense of benefits?

Accepted Answer

Using more independent contractors rather than hiring additional employees can help organizations minimize the expense of benefits as these contractors are not entitled to the same benefits employees are typically entitled to, such as health insurance and retirement plans. However, organizations need to ensure that they are not misclassifying employees as independent contractors to avoid legal and financial penalties. Limiting the coverage on life insurance based upon an employee's age, as suggested in option B, is illegal and discriminatory. Using more full-time rather than part-time employees, as suggested in option C, does not necessarily minimize the expense of benefits as full-time employees are entitled to the same benefits as part-time employees. Recruiting new employees instead of demanding overtime from existing employees, as suggested in option D, does not necessarily minimize the expense of benefits as new employees are also entitled to benefits. Substituting HMO and PPO plans with traditional health insurance plans, as suggested in option E, also does not necessarily minimize the expense of benefits, as traditional health insurance plans can be more expensive than HMO and PPO plans.

Question 8

Ravi is the CEO of a magazine publishing company.He wants to provide benefits for his employees,but would still like to control his company's costs.Jess,the head of the HR department,suggests implementing a cafeteria-style plan.What would be the most likely benefit of Ravi doing so?

Accepted Answer

With a cafeteria-style plan, employees get to choose benefits that they value most, while the employer can avoid the cost of providing benefits that are not valued by the employees. This can help control costs while still providing benefits that are valued by employees.

Question 9

Under the Older Workers Benefit Protection Act of 1990,which of the following guidelines must employers follow when asking employees to sign early-retirement waivers?

Accepted Answer

The Older Workers Benefit Protection Act of 1990 requires employers to inform employees that they may consult with a lawyer before signing early-retirement waivers. This is to ensure that employees fully understand their rights and the implications of signing the waiver. The other answer choices are incorrect or do not reflect the guidelines under the Act.

Question 10

Mario,a production worker,complains to a human resource professional at his company that when he asked his supervisor for a week off to care for his son after surgery,the supervisor replied,"Can't your wife do that instead?" Which of the following statements best summarizes what the HR professional should explain to the supervisor?

Accepted Answer

The HR professional should explain to the supervisor that equal employment opportunity requires that access to benefits not be limited by sex. Asking if Mario's wife can take care of their child assumes that women are the primary caregivers and could be considered discrimination based on gender. By reminding the supervisor of the company's obligation to provide equal access to benefits for all employees, regardless of sex or gender, the HR professional can help address the situation and ensure that Mario is able to take the time off he needs to care for his child.

Question 11

Which of the following is an advantage of cafeteria-style plans?

Accepted Answer

With cafeteria-style plans, employees are able to see the cost and value of each benefit, which can help them make better decisions and potentially save money. This transparency can also lead to better employee satisfaction and retention. However, options A, C, D, and E are not advantages of cafeteria-style plans.

Question 12

In a meeting to discuss pension plans,management decides to offer retirement plans exclusively to the organization's owners and top managers.Steven,one of the top managers,disagrees with this decision because he believes the company can benefit more by providing pensions to a broad range of employees.Which of the following strengthens Steven's belief?

Accepted Answer

Nondiscrimination rules provide tax benefits to plans that do not favor the organization's highly compensated employees. This means that providing pensions to a broad range of employees, rather than exclusively to the organization's owners and top managers, can result in tax benefits for the company. This strengthens Steven's belief that the company can benefit more by providing pensions to a broad range of employees. The other answer choices are either irrelevant or do not support Steven's belief.

Question 13

Jim is the CEO of a company that is expanding overseas.He considers introducing a cafeteria-style benefits plan to cater to the company's diverse workforce.However,the HR team brings up the concern of higher expenses involved in this type of benefits.Which of the following is Jim likely to do to lower costs at the initial stage?

Accepted Answer

Using software packages to design the benefits plan can help lower costs as it can automate the process and eliminate the need for manual work, reducing the need for more employees or outside assistance. It can also help in designing the most cost-effective plan without compromising the benefits.

Question 14

Grey Inc.is a start-up located in Orlando.It offers highly beneficial pension plans to its employees.Which of the following categories of employees is the company most likely to attract through its pension benefits?

Accepted Answer

The company is most likely to attract older people because they are closer to retirement age and would be looking for a company with good pension benefits to support them in their retirement years.

Question 15

Which of the following must be true for a pension plan to be deemed as a qualified plan?

Accepted Answer

A qualified plan cannot discriminate in favor of highly compensated employees, meaning that all eligible employees must be treated equally in terms of plan participation and benefits. The other choices are not requirements for a plan to be qualified.

Question 16

Bilge Makers Unlimited has a goal to lower the cost of employee benefits.Its human resource department compares the costs of its benefits with averages published by the Bureau of Labor Statistics,the U.S.Chamber of Commerce,and other sources.The investigation shows that its cost for workers' compensation insurance is high relative to other companies.Which of the following actions could best help Bilge Makers accomplish its goal?

Accepted Answer

Improving safety lowers the company's experience rating, which in turn lowers the cost of workers' compensation insurance.

Question 17

Under the Americans with Disabilities Act,which of the following employers is most likely to face legal challenges?

Accepted Answer

An employer who switches to a risk-based policy after hiring a disabled employee is most likely to face legal challenges under the Americans with Disabilities Act. This is because shifting to a policy that favors able-bodied employees after hiring someone with a disability is a form of discrimination based on disability status.

Question 18

Which of the following is legally required by an organization while offering early-retirement incentives?

Accepted Answer

It is legally required for an organization to ensure that there is no coercion used to force employees to retire. This is to prevent any discrimination or unfair treatment based on age or other factors. A and B are not legally required and may actually be considered discriminatory. D is not required and may even be illegal if it violates employee rights. E does not give enough time for employees to make an informed decision and may not be considered fair.

Question 19

Which of the following is an advantage of a qualified plan in retirement benefits?

Accepted Answer

Immediate tax deductions for the funds employees contribute to the plan is an advantage of a qualified plan, as it reduces employees' taxable income and provides a tax benefit upfront. The other options listed are either incorrect or not an advantage of a qualified plan.

Question 20

Which of the following is a requirement set for employers under the Financial Accounting Standards Board standards?

Accepted Answer

The Financial Accounting Standards Board standards mandate that employers must set aside the funds they expect to need for benefits to be paid after retirement. This is known as accrual accounting and is in contrast to the pay-as-you-go basis mentioned in option A, which is not a requirement according to these standards. Option B is incorrect as benefits are considered future cost obligations in accounting. Option C is irrelevant as it does not relate to accounting standards. Option D is incorrect as financial statements must be clear and transparent for outsiders to understand.

Quiz 14: Providing Employee Benefits