Question 1

Apex Consulting wants to offer its employees a health insurance plan that gives the employees the greatest amount of choice in hospital and physician selection.Which of the following would be the best choice for Apex?

Accepted Answer

Traditional insurance plans typically offer the most flexibility in choosing healthcare providers, including hospitals and physicians, compared to HMOs and PPOs, which often have more restricted networks. Flexible spending accounts are not insurance plans but rather a way to set aside pre-tax dollars for medical expenses.

Question 2

In a ________ plan,the employer puts in a specific amount and employees may contribute additional funds.Payout depends on the success of the investments in the retirement plan.

Accepted Answer

This describes a defined contribution plan, where the employer contributes a specific amount but employees can add more and the payout is based on investment success. A pension (A) typically guarantees a set retirement benefit based on salary and years of service. A portable benefit (C) is a type of benefit that can be transferred from job to job, but does not describe the specific type of retirement plan. A defined benefit plan (D) guarantees a specific benefit at retirement based on a formula, regardless of investment success.

Question 3

A(n)________ plan is a retirement plan for which the employer assumes all the risk of meeting the plan's obligation and which provides the employee with a safe,secure,predictable retirement income.

Accepted Answer

A defined benefit plan is a retirement plan where the employer takes on the risk of providing the employee with a specific retirement benefit based on the employee's salary and length of service. This benefit is not affected by investment performance or other market fluctuations, making it a safe and predictable source of retirement income. While 401(k) plans and IRAs also provide retirement savings, they do not offer the same level of guarantee as a defined benefit plan. Portable benefits are a different type of plan that would not fit the definition of employer-assumed risk and guaranteed retirement income.

Question 4

Employee retirement benefits are governed by:

Accepted Answer

Employee retirement benefits are governed by the Employee Retirement Income Security Act (ERISA). COBRA pertains to continuation of health insurance coverage after employment ends, the Social Security Act pertains to government-sponsored retirement and disability benefits, and the Equal Pay Act addresses gender-based wage discrimination.

Question 5

You have worked for Steel Workings for nearly eight years.Your employee-provided funds and employer-contributed funds are all vested.You intend to quit your job at Steel Workings to take another job.Your retirement funds will most likely:

Accepted Answer

Since the employee-provided and employer-contributed funds are all vested, they belong to the employee and will stay with them even after leaving Steel Workings. These funds will not be lost or decreased by half upon voluntary separation from the company. The employee can choose to either leave the funds in the existing retirement account or roll them over into a new retirement account set up with their new employer or a personal retirement account. However, it is important to note that the new employer may not contribute to the existing retirement account, but the employee can still contribute to it if they choose to.

Question 6

HR can most likely help employers control health-care costs by:

Accepted Answer

Forming a self-funding arrangement for health insurance allows employers to have more control over the healthcare benefits offered to employees and potentially reduce healthcare costs. This approach involves setting up a fund from which employee healthcare claims are paid, rather than paying a fixed premium to an insurance carrier. This strategy allows employers to tailor their healthcare benefits programs to their employees' needs and potentially save on premium costs, which can ultimately help control healthcare costs.

Question 7

What is the maximum contribution for 401(k)plans?

Accepted Answer

The maximum contribution for 401(k) plans in 2021 is 15% of salary up to $17,500. Option B and C both mention percentages of gross income, which is not correct for 401(k) plans, and option D mentions a maximum salary contribution that is too low for the current year. Therefore, option A is the correct answer.

Question 8

An HMO-based health plan:

Accepted Answer

An HMO-based health plan typically provides comprehensive coverage for a fixed annual fee, which may be lower than other types of health plans. HMOs require members to choose a primary care physician who coordinates their care and refers them to specialists within the HMO network. HMOs usually prioritize preventive care services, such as regular check-ups and screenings, to maintain the health of their members and avoid more expensive medical costs.

Question 9

A qualified retirement plan:

Accepted Answer

Qualified retirement plans allow employees to contribute pre-tax income, which means they don't pay taxes on contributions at the time they are made but will pay taxes upon withdrawal in retirement.

Question 10

Which of the following guarantees that accrued retirement benefits will be given to retirement plan participants when they leave the employer?

Accepted Answer

Vesting refers to the process by which an employee becomes entitled to a pension or retirement plan. Once an employee is vested in a retirement plan, they are guaranteed to receive the accrued benefits when they leave the employer. Portable benefits and flexible spending are not directly related to ensuring that accrued retirement benefits are given to plan participants.

Question 11

Which of the following is a true statement about HSAs?

Accepted Answer

Earnings and qualified withdrawals from HSAs are not taxed, making them an attractive option for individuals looking to save on taxes while also saving for future medical expenses.

Question 12

Upon retirement,people typically have how many main sources of income?

Accepted Answer

Upon retirement, people typically have three main sources of income: Social Security benefits, personal savings, and retirement benefits. Inheritance benefits are not a typical source of income for retirees. While some retirees may have other sources of income, these three are the most common.

Question 13

All of the following are characteristics of PPOs EXCEPT:

Accepted Answer

PPOs (Preferred Provider Organizations) offer more flexibility in choosing healthcare providers compared to HMOs (Health Maintenance Organizations), thus they do not typically limit physician choice significantly.

Question 14

Once an employee leaves an employer,that employee:

Accepted Answer

After leaving an employer, the employee may be eligible to continue their health insurance coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act) for up to 18-36 months. However, the employee will need to pay the full premium, including the portion that was previously paid by the employer.

Question 15

Which of the following is most likely a true statement?

Accepted Answer

The answer of Which of the following is most likely...

Question 16

Layla has taken a new job at a large appliance company and must choose between health plans.If Layla is like the majority of employees,she will choose a(n)________ plan.

Accepted Answer

Most employees tend to choose a PPO (Preferred Provider Organization) plan because it offers more flexibility in choosing healthcare providers and doesn't require a referral to see a specialist, making it a popular choice.

Question 17

Which of the following is designed to encourage preventive health care in order to reduce overall costs?

Accepted Answer

Health maintenance organizations (HMOs) are designed to encourage preventive health care by providing a comprehensive set of medical services for a fixed fee. HMOs typically require members to choose a primary care physician who acts as the gatekeeper for all medical services. The primary care physician is responsible for coordinating all medical care, including referrals to specialists, diagnostic tests, and hospitalizations. By emphasizing preventive care and managing medical costs, HMOs aim to lower overall healthcare costs and promote better health outcomes for their members.

Question 18

Most people can expect that Social Security will provide approximately ________ of their needed retirement income.

Accepted Answer

According to the Social Security Administration, Social Security benefits are designed to replace about 40% of an average wage earner's income after retiring. However, this percentage may be lower or higher depending on the individual's work history, age at retirement, and other factors. Therefore, the closest answer among the choices provided is option C, which states that most people can expect Social Security to provide approximately 25% of their needed retirement income.

Question 19

The individual retirement account (IRA)is primarily appropriate for:

Accepted Answer

The answer of The individual retirement account (IRA)is primarily appropriate...

Question 20

Which of the following protects an employee's ability to transfer between health insurance plans without a gap in coverage due to a preexisting condition?

Accepted Answer

HIPAA (Health Insurance Portability and Accountability Act) protects an employee's ability to transfer between health insurance plans without a gap in coverage due to a preexisting condition.

Quiz 12: Designing and Administering Benefits