Risk Management

Business

Quiz 20 :

Employment-Based Risk Management General

Quiz 20 :

Employment-Based Risk Management General

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Employee premium contributions are tax deductible, except if they are allowed to be used in a cafeteria program under a premium conversion plan or flexible spending account (FSA).
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True False
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False

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When small employers come together through a multiple-employee trust to purchase insurance, they have access to group underwriting treatment, products, and services that are significantly different to those available to large employers.
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True False
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False

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Health Insurance Portability and Accountability Act provides portability of coverage.Portability means carrying the actual coverage of the old employer to the new one, not carrying forward the qualification for preexisting conditions.
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True False
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False

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The Financial Accounting Standards Board (FASB 106) in 1993 phased in a requirement that employers recognize the pay-as-you-go system on the balance sheet during the employees' active working years rather than the present value of future retiree medical expense benefits.
True False
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The catch with a flexibility spending account plan is that the employee can carry forward any balance in the account at year-end to the next year.
True False
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Employee benefits are affected by the Age Discrimination in Employment Act because the law was amended to require that benefits must be continued for older workers.
True False
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Employee benefits are regulated by the Department of Labor and the Internal Revenue Service (IRS).
True False
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Purchase of an administrative services only (ASO) contract and stop-loss insurance gives the employer the potential cash flow and expense advantage of self-funding, while reducing the employer's administrative burden and potential for catastrophic risk.
True False
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Group life and disability insurance plans are noncontributory, but they require the employees to contribute if other family members are covered.
True False
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The potential for adverse selection can be greater with supplemental benefits than with nonsupplemental benefits.
True False
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The employee has a valuable right with the Consolidated Omnibus Budget Reconciliation Act because continuation of insurance is provided without evidence of insurability.
True False
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Although experience rating allows employer groups to benefit directly from their own good claims experience, it does not provide economic incentive for risk managers to control claims.
True False
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If an employee receives disability benefits, the portion paid for by the employer is taxable to the employee.
True False
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Higher administrative costs and adverse selection discourage employers from implementing cafeteria plans.
True False
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The Americans with Disabilities Act is concerned with a person's ability to perform a specific job and not his or her ability to perform regular daily living activities.
True False
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A modular cafeteria is more flexible than the core plus cafeteria plan, but requires more administrative cost.
True False
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During group underwriting, large groups have to be rated based on the insurer's experience with groups of similar type and size, while small groups can be rated on their own experience.
True False
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Cafeteria plans are included under Section 125 of the Internal Revenue Code.
True False
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Under the Health Insurance Portability and Accountability Act, an employer can impose only up to twelve months preexisting conditions exclusions for regular enrollment and up to eighteen months for late enrollment.
True False
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Employee benefits do not offer tax incentives.
True False
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