Deck 13: Employee Benefits

Question 1

Fitness facility programs have two central goals: raising awareness levels of health-related issues and informing people on health-related topics.

Answer 1

False

Question 2

Shannon has been offered a job with a competitor.Her base pay will be higher,but the new company does not offer health insurance.She will have to buy it on her own.She decides to turn down the new job to keep her health insurance.Her current employer is more likely to retain employees because of health insurance.

Answer 2

True

Question 3

The Consolidated Omnibus Budget Reconciliation Act (COBRA)requires that the beneficiary (whether the employee,spouse,or dependent)have access to the same services as employees who have not lost their health insurance.

Answer 3

True

Question 4

Insurance risks can be more easily pooled in smaller groups.

Question 5

One of the objectives of the unemployment insurance program is to offset lost income during voluntary unemployment.

Question 6

When Pietro was laid off from his job and accepted unemployment,he was surprised that it would be taxed as ordinary income.

Question 7

Typhanie was injured at work.When she went to the doctor,she was told that she would need surgery,followed by time in a rehabilitation facility and then months of physical therapy.Typhanie was surprised to learn that worker's compensation does not cover her time in the rehabilitation facility.

Question 8

With the passage of the Americans with Disabilities Act,employers came under even greater pressure to deal effectively and fairly with workplace injuries.

Question 9

Economic theory tells us that people prefer a dollar in cash over a dollar's worth of any specific commodity because the cash can be used to purchase the commodity or something else.

Question 10

Sasha is helping her mother prepare for retirement.She tells her that the largest income will come from her pension plan,so she needs to be sure she has invested her money there.

Question 11

Defined contribution plans insulate employees from investment risks,which are borne by the company.

Question 12

Activities such as preadmission testing and second surgical opinions focus on shifting,rather than reducing,costs.

Question 13

At a retirement meeting,Myra learned that Social Security retirement benefits are no longer subject to an earnings test,if you are at retirement age.This made her happy.

Question 14

Where employee contributions completely fund a disability insurance plan,there is no federal tax.

Question 15

Cassie is excited to begin her first part-time job.She can't wait to earn vacation,have her own health insurance,and contribute to her pension.

Question 16

Unlike workers in most Western European countries,who have nationalized health systems,the majority of Americans receiving health insurance get it through their (or family members')employers.

Question 17

Medical insurance and disability insurance programs are legally required.

Question 18

Beneficiaries do not get free coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Question 19

The smaller the cost of a benefit category,the greater the opportunity for savings.

Question 20

After an illness,Andy is now unable to work and will receive disability pay.He assumes that this pay will be similar to unemployment insurance and will be taxed.Is he correct?

Question 21

Which of the following is true about the Old Age,Survivors,Disability,and Health Insurance (OASDHI)program?

A)Only about 50 percent of U.S.employees are covered by the program.
B)Federal,state,and local government employees account for a high percentage of employees covered under this program.
C)There are no eligibility requirements to be met by an individual to receive benefits.
D)Old-age insurance benefits for fully insured workers begin at the age of 50.
E)High earners help subsidize benefit payments to low earners.

Question 22

Increasing retiree health care costs (and the change in accounting standards)have led some companies to require white-collar employees and retirees to pay insurance premiums for the first time in history.

Question 23

LouAnn has retired and is receiving Social Security.Each year she can expect an increase in

A)unemployment benefits.
B)cost-of-living.
C)disability benefits.
D)tuition.
E)retirement plans.

Question 24

Which of the following is a unique aspect of benefits?

A)There is no question of legal compliance.
B)Organizations so typically offer them that they have become institutionalized.
C)It is less complex to understand the value of a dollar in a benefits package than in a salary.
D)Medical and retirement plans are not part of benefits.
E)Benefits,unlike direct compensation,are never mandated by law.

Question 25

Which of the following is a major category of workers' compensation?

A)Sustainability income
B)Death-of-spouse benefits
C)Rehabilitative services
D)Housing care
E)Pension services

Question 26

Investment returns on qualified retirement funds are taxed.

Question 27

Which of the following was an amendment to the Social Security Act of 1935?

A)Descendant's insurance
B)Inability insurance
C)Estate insurance
D)Hospital insurance
E)Posterity insurance

Question 28

Which of the following is true about Social Security retirement benefits?

A)Benefits are subject to federal income tax.
B)An earnings test exists for those beneficiaries aged 50 and under.
C)Currently,an earnings test is required for those who have reached retirement age.
D)Benefits are entirely free from state income tax throughout the United States.
E)An earnings test increases a person's incentive to retire.

Question 29

Which of the following individuals is eligible for unemployment benefits?

A)Miguel was discharged for willful misconduct.
B)Ricky is not actively seeking work.
C)Kendrick quit his job voluntarily.
D)Heather is just out of college and looking to start her career.
E)Reena lost her job due to outsourcing.

Question 30

Flexible benefit plans are also known as cafeteria-style plans.

Question 31

The ________ tax rate is the percentage of additional earnings that goes to taxes.

A)marginal
B)net
C)gross
D)incremental
E)maximum

Question 32

The unemployment insurance program is financed largely through federal and state taxes on

A)employees.
B)employers.
C)retired personnel.
D)the general public.
E)employment agencies.

Question 33

Which of the following is a major objective of the unemployment insurance program?

A)To offset lost income during voluntary unemployment
B)To help those currently working to find new jobs in other fields
C)To provide an incentive for employees to stabilize employment
D)To make up for lost income during a labor dispute
E)To help employers find the right talent for reaching their business goals

Question 34

The state tax code requires that funds in health care and dependent care accounts be earmarked in advance and spent during the plan year.

Question 35

Which of the following is a reason for the growth of benefits as a method of employee compensation?

A)The tax treatment of benefits programs is less favorable for employees than the tax treatment of wages and salaries.
B)People prefer a dollar in cash over a dollar's worth of any specific commodity.
C)The legislation passed during the Great Depression was not conducive to benefits.
D)Benefits are covered by wage and price controls.
E)Groups of employees can typically receive a cost advantage over individuals.

Question 36

Alex knows that he no longer needs to sue his employer for workers' compensation because the law now covers job-related

A)pay raises.
B)policy changes.
C)quality-linked incentives.
D)injuries and death.
E)tax benefits.

Question 37

Which of the following is true about employee benefits?

A)Government involvement in benefits decisions is minimal.
B)The impact of legal regulations on benefits is greater than that on direct compensation.
C)Understanding the value of a dollar in a benefits package is more complicated than understanding it in a salary.
D)The tax treatment of benefits programs is often less favorable for employees than is the tax treatment of wages and salaries.
E)Employees are always aware of the benefits available,as well as how to use them.

Question 38

Workers are eligible for unemployment benefits if they

A)voluntarily quit their job.
B)are out of work due to a labor dispute.
C)were discharged for willful misconduct.
D)have worked for at least one year.
E)are not actively seeking work.

Question 39

Which of the following is true about Social Security as a benefits program?

A)It does not cover unemployment insurance.
B)It is the only plan that requires no employee to meet any eligibility criteria.
C)It covers mostly railroad and federal,state,and local government employees.
D)It does not require minimum earnings to be fully insured.
E)It is entirely free from federal tax.

Question 40

The follow-up model is better than the physical fitness facility and health education programs in reducing risk factors.

Question 41

Which of the following increased the fiduciary responsibilities of pension plan trustees and established vesting rights and portability provisions?

A)Affordable Care Act
B)Social Security Act
C)Employee Retirement Income Security Act
D)Consolidated Omnibus Budget Reconciliation Act
E)National Labor Relations Act

Question 42

Which of the following is true about private group insurance?

A)Concern for employee security explains the prevalence of employer-sponsored insurance plans.
B)Disability insurance programs are mandatory in all high-risk occupations.
C)Medical insurance programs are mandatory in all organizations.
D)Individuals have more bargaining power when negotiating prices.
E)Group insurance rates are typically higher than individual rates because of economies of scale.

Question 43

________ plans permit employees to defer compensation on a pretax basis.

A)Supplemental benefit
B)Section 401(k)
C)Money purchase
D)Specified retirement benefit
E)Profit-sharing

Question 44

Which of the following is true about workers' compensation?

A)Workers' compensation benefits focus primarily on dealing with the increasing cost of living.
B)Unlike before,injuries that are self-inflicted and stem from intoxication are now covered as well.
C)Housing plans and pension services are included in workers' compensation.
D)Self-funding of disability income by employers is restricted in most states.
E)Disability benefits that are part of workers' compensation are tax-free.

Question 45

Employers pay for workers' compensation costs.There is a range of cost based on which of the following?

A)Type of competition faced
B)Employer's profitability
C)Employee's profitability
D)Employer's experience rating
E)Employee's experience rating

Question 46

The ________ requires defined contribution plans holding publicly traded securities to provide employees with at least three investment options other than employer securities.

A)Pensions Act of 2008
B)Health Insurance Portability and Accountability Act of 1996
C)Consolidated Omnibus Budget Reconciliation Act of 1985
D)Employee Retirement Income Security Act of 1974
E)Pension Protection Act of 2006

Question 47

Group insurance rates are typically lower than individual rates because

A)risks cannot be pooled together in group insurance.
B)group insurance does not cover permanent disabilities.
C)of economies of scale.
D)it is exempt from taxes.
E)group insurance lacks guaranteed coverage.

Question 48

Which of the following is the largest single component of the elderly's overall retirement income?

A)Old-age insurance
B)Private pension
C)Earnings from assets
D)Disability insurance
E)Medical insurance

Question 49

Which of the following is true about defined contribution plans?

A)They shift the investment risk to the employer.
B)They present greater administrative challenges to employers.
C)They promise a specific benefit level for employees upon retirement.
D)They are preferred more in smaller companies than larger ones.
E)They have become less common.

Question 50

Which of the following is true of the cost to the employer for workers' compensation?

A)The premium for high-risk occupations is lower than the premium for low-risk occupations.
B)The premium is the same,no matter which state the firm is located in,if the injury is the same.
C)The compensation mostly covers minor injuries such as sprains and strains,rather than dramatic injuries.
D)The compensation does not cover the cost of rehabilitation services.
E)The experience rating system primarily induces employees to take precautions at work.

Question 51

The ________ guarantees payment to employees of a basic retirement benefit in the event that financial difficulties force a company to terminate or reduce employee pension benefits.

A)Employee Benefits Security Administration
B)Pension Benefit Guaranty Corporation
C)Employees' Compensation Appeals Board
D)Bureau of Labor Statistics
E)Equal Employment Opportunity Commission

Question 52

After Olivia has worked for her company for 10 years,she will have ________ to a pension upon retirement,according to the Employee Retirement Income Security Act (ERISA).

A)vesting rights
B)portability rights
C)transfer rights
D)fiduciary rights
E)funding rights

Question 53

Which of the following affects the amount of income that will be available to an employee upon retirement in defined contribution plans?

A)The number of times an employee shifted jobs
B)The number of employees covered in the plan
C)The size of the organization
D)The level of job performance
E)The age at which investments are made

Question 54

Drew's company has offered a defined contribution plan for retirement.This makes Drew nervous because the investment decision is made by the

A)insurance company.
B)employer.
C)Pension Benefit Guaranty Corporation (PBGC).
D)employee.
E)U)S.Department of Labor.

Question 55

Shelby has been laid off due to downsizing.She is worried about her health coverage as she has just found out she is pregnant.The HR benefits specialist tells her that she can continue to pay for health coverage for up to 36 months due to which law?

A)Affordable Care Act (ACA)
B)Americans with Disabilities Act (ADA)
C)Employee Retirement Income Security Act (ERISA)
D)Consolidated Omnibus Budget Reconciliation Act (COBRA)
E)Equal Employment Opportunity Commission (EEOC)

Question 56

Which of the following statements is true about the Pension Benefit Guaranty Corporation (PBGC)?

A)It was created by the Consolidated Omnibus Budget Reconciliation Act (COBRA)of 1985.
B)It guarantees a complete pension benefit replacement.
C)It does not guarantee health care benefits.
D)It is not funded by an annual contribution per plan participant.
E)It allows payouts to be adjusted for cost-of-living changes.

Question 57

Which of the following provides 12 weeks of unpaid absence from work to care for a seriously ill child,spouse,or parent if the organization has at least 50 employees living within a 75-mile radius?

A)Child and Family Services Improvement and Innovation Act
B)Child and Family Services Act
C)Child Support Recovery Act
D)Family and Medical Leave Act
E)Affordable Care Act

Question 58

You have the option to choose a retirement plan.You want to choose a plan that promises a specific benefit level,so you decline the ________ plan.

A)defined benefit
B)term benefit
C)defined contribution
D)flex benefit
E)cash balance

Question 59

Which of the following is true of the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

A)It requires employers to extend health insurance coverage for 36 months after termination due to gross misconduct.
B)It requires employees to reduce the hours that lead to a gain of health insurance.
C)The beneficiaries of employees who still have their health insurance have access to the same services.
D)The beneficiaries of employees get free coverage even if the employees have lost access to their health insurance.
E)The beneficiaries receive the advantage of purchasing coverage at the individual rate.

Question 60

Which of the following is true about vesting rights?

A)They include the right to a pension prior to retirement age.
B)Employers may choose to vest employees after five years.
C)The right to a pension remains only if the vested employee is with the employer until retirement.
D)Transferring employees as a means of avoiding pension obligations is allowed.
E)Multiemployer pension plans do not take vesting into consideration.

Question 61

Which of the following is true of an active wellness program?

A)It includes the outreach and follow-up model.
B)It includes health education programs.
C)It includes a fitness facility.
D)It does not include counselors to guide individuals.
E)It assumes that employee behavior change requires only awareness,not reinforcement.

Question 62

In which of the following ways do PPOs differ from HMOs?

A)HMOs provide benefits on a prepaid basis.
B)PPOs focus on preventive measures and outpatient care.
C)PPOs aim at providing high-quality health services at high costs.
D)HMOs contract directly with employees.
E)Physicians are paid on a flat salary basis in PPOs.

Question 63

Which of the following is a characteristic of a health maintenance organization (HMO)?

A)Exclusion of outpatient care
B)Provision of benefits on a reimbursement basis
C)Payment of physicians on a flat salary basis
D)Payment of physicians on a fee-for-service basis
E)Payment of physicians depending on the number of patients seen

Question 64

Which of the following types of benefits involves the highest of costs?

A)Legally required benefits
B)Medical and other insurance
C)Retirement and savings plan
D)Payment for time not worked
E)Supplemental pay

Question 65

In which of the following ways may staffing practices change in response to benefit cost controls?

A)Increasing benefit costs per hour by having employees work more hours with fixed benefit costs
B)Classifying employees as contractors rather than employees
C)Increasing the number of full-time workers
D)Rehiring previously laid off employees
E)Paying temporary workers for time not spent working

Question 66

Which of the following is an example of a Pareto group?

A)Twenty percent of the employees,who account for 75 percent of the health care costs
B)Ten percent of the employees,who account for 25 percent of the health care costs
C)Fifty percent of the employees,who account for 50 percent of the health care costs
D)Eight percent of the employees,who account for 20 percent of the health care costs
E)Sixty percent of the employees,who account for 80 percent of the health care costs

Question 67

Brenda has been offered choices when selecting her benefits.She knows she wants health insurance,is unsure of vision insurance,and does not want dental insurance.This is allowed because her employer has

A)defined benefit plans.
B)flex-plans.
C)standard benefits packages.
D)flexible spending accounts.
E)traditional benefit plans.

Question 68

Which of the following media is least used by organizations to communicate benefit plans?

A)Enrollment materials (online or paper)
B)Group employee benefits communications with the benefits vendor
C)Group employee benefits communications with an organizational representative
D)One-to-one employee benefits counseling with an organizational representative
E)Direct mail to home/residence

Question 69

Which of the following is true of passive employee wellness programs (EWPs)?

A)They have large outreach programs aimed at individuals.
B)They provide ongoing employee support to motivate them to use the available resources.
C)Health education programs are an example of passive EWPs.
D)They do not include structural changes such as having a fitness facility for employees.
E)They include tailored programs with counselors guiding individuals.

Question 70

Which of the following is true of the Fair Labor Standards Act (FLSA)?

A)It requires exempt employees to be paid time and a half for hours in excess of 40 per week.
B)It has led to Americans working fewer hours now as compared to earlier times due to a rise in benefits.
C)It is more likely to cause employers to classify workers as independent contractors than employees.
D)It has led to part-time employees being more likely to receive benefits than full-time employees.
E)It increases the employer's obligation to provide legally required employee benefits.

Question 71

Which of the following is true of the methods used for communication about benefits information?

A)Online tools are not effective for personalized communications to individual employees.
B)Online tools have increased the need for benefits-related jobs in an organization.
C)Providing clear benefits communication does not always increase employee satisfaction.
D)Written benefits will reach all working citizens as they are all literate.
E)Cafeteria plans limit employees' awareness and appreciation of what an employer provides.

Question 72

Falcon Wings Inc.has instituted an incentive program that includes smoking cessation and exercise.The goal of this wellness program is to

A)provide treatment for ailing employees.
B)manage health care costs by helping employees in need.
C)provide rehabilitation services.
D)manage insurance-related queries from employees.
E)change health-related behaviors both on and off work time.

Question 73

The Pregnancy Discrimination Act of 1978 requires employers to

A)offer disability plans with pregnancy-related coverage.
B)treat pregnancy as they would any other disability if they do offer disability plans.
C)provide up to eight weeks of paid leave to the mother upon the birth of a child.
D)provide up to six weeks of unpaid leave to the father upon the birth of a child.
E)bear all the medical expenses related to the birth of their employee's child.

Question 74

Which of the following is a characteristic of preferred provider organizations (PPOs)?

A)They contract with employees instead of employers.
B)They do not make contracts with insurance companies.
C)They provide benefits on a prepaid basis.
D)Employees often are required to use the preferred providers.
E)Employers may give incentives for employees to choose a participating physician.

Question 75

Which of the following is part of an active wellness program?

A)Awareness of health-related issues
B)Counselors providing tailored programs
C)Centers for physical fitness
D)Athletic trainers present in a company gym
E)Information on health-related topics

Question 76

Survey information on competitors' benefit packages and information on benefit costs are available from

A)public consultants.
B)the Pension Benefit Guaranty Corporation (PBGC).
C)the Bureau of Labor Statistics (BLS).
D)the Legal Information Institute (LII).
E)unemployment offices.

Question 77

At the highest level of child care provision,firms provide employees with

A)vouchers or discounts to buy products for their children.
B)child care at or near their worksites.
C)information about the costs of available child care.
D)phone numbers of child care facilities in the area.
E)comprehensive information about the quality of available child care.

Question 78

In the context of benefits,which of the following is true of the demographics of a workforce?

A)Young employees are more concerned about medical coverage.
B)Young employees are more concerned about life insurance.
C)Young,unmarried men often have more interest in benefits.
D)Young,unmarried women have less interest in high salary and wages.
E)Women of childbearing age care more about disability leave.

Question 79

An organization introduces active employee wellness programs.Which of the following is likely to happen in the organization as a result?

A)More focus on physical exercise than on awareness issues
B)More health education programs designed to inform employees on health-related topics
C)Fewer counselors who handle one-on-one outreach programs
D)Increased focus on awareness and opportunity as well as support and reinforcement
E)Introduction of a center for physical fitness for employees to use anytime

Question 80

Colonial Life will be in the building next week to chat with employees about their insurance plans.What is the best way to get the news out to the employees?

A)Enrollment materials (online or paper)
B)Group employee benefits communications with the vendor
C)Social media
D)Newsletters (online or paper)
E)Direct mail to home/residence