Ch13 – Employee Benefits | Test Bank – 10th Edition

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.

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.

A. 

marginal

B. 

net

C. 

gross

D. 

incremental

E. 

maximum

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.

A. 

Descendant's insurance

B. 

Inability insurance

C. 

Estate insurance

D. 

Hospital insurance

E. 

Posterity insurance

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.

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.

A. 

Unemployment benefit

B. 

Cost-of-living

C. 

Disability benefit

D. 

Tuition

E. 

Retirement plan

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.

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

A. 

employees

B. 

employers

C. 

retired personnel

D. 

the general public

E. 

employment agencies

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.

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.

A. 

pay raises

B. 

policy changes

C. 

quality-linked incentives

D. 

injuries and death

E. 

tax benefits

A. 

Sustainability income

B. 

Death-of-spouse benefits

C. 

Rehabilitative services

D. 

Housing care

E. 

Pension services

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.

A. 

type of competition faced.

B. 

employer's profitability.

C. 

employee's profitability.

D. 

employer's experience rating.

E. 

employee's experience rating.

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.

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.

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.

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)

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.

A. 

Old-age insurance

B. 

Private pension

C. 

Earnings from assets

D. 

Disability insurance

E. 

Medical insurance

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

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

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.

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.

A. 

Defined benefit

B. 

Term benefit

C. 

Defined contribution

D. 

Flexi benefit

E. 

Cash balance

A. 

Supplemental benefit

B. 

Section 401(k)

C. 

Money purchase

D. 

Specified retirement benefit

E. 

Profit-sharing

A. 

insurance company

B. 

employer

C. 

Pension Benefit Guaranty Corporation (PBGC)

D. 

employee

E. 

U.S. Department of Labor

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

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

A. 

vesting rights

B. 

portability rights

C. 

transfer rights

D. 

fiduciary rights

E. 

funding 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. 

Multi-employer pension plans do not take vesting into consideration.

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

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.

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.

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

A. 

Legally required benefits

B. 

Medical and other insurance

C. 

Retirement and savings plan

D. 

Payment for time not worked

E. 

Supplemental pay

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.

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

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.

A. 

providing treatment for ailing employees.

B. 

managing health care costs by helping employees in need.

C. 

providing rehabilitation services.

D. 

managing insurance-related queries from employees.

E. 

changing health-related behaviors both on and off work time.

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

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

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.

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.

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. 

Eighty 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

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.

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

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.

A. 

defined benefit plans

B. 

flex-plans

C. 

standard benefits packages

D. 

flexible spending accounts

E. 

traditional benefit plans

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.

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

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

A. 

Low initial design costs

B. 

Low administrative costs

C. 

Control over the size of the contribution

D. 

Low adverse selection

E. 

Easy estimation of the costs of benefits

A. 

allowing employees to choose benefits based on their personal needs.

B. 

removing the limitations on coverage amounts.

C. 

pricing benefits subject to a low adverse selection.

D. 

increasing the choices that cater to individual needs.

E. 

using a limited set of packaged options.

A. 

They can only be used for dependent-care expenses.

B. 

They restrict pretax employee contributions.

C. 

They work best to the extent that employees have unpredictable expenses.

D. 

Funds must be used by the plan's year end or they revert to the employer.

E. 

They cause a reduction in take-home pay.

A. 

dependent care expenses are covered through the same account.

B. 

it increases employees' take-home pay.

C. 

unused funds revert to the employee.

D. 

it covers unpredictable expenses.

E. 

it permits post-tax contribution to an employee's account.

A. 

employees to have physical examinations as a precondition for employment offers.

B. 

employees to accept health insurance coverage.

C. 

employees to retire at age 65.

D. 

women to contribute more than men to a defined benefit plan.

E. 

employees to attend health benefit programs.

A. 

it is the employees', not the employers', responsibility to gather all information about available options

B. 

employers should ensure that only employees over the age of 60 receive the programs’ benefits

C. 

employees meet a stringent deadline in making their decision about early retirement

D. 

employers can cease the accrual of retirement benefits at about 65 years to induce older employees to retire

E. 

employees should not be coerced to accept an incentive and retire

A. 

part-time employees

B. 

older employees

C. 

highly compensated employees

D. 

employees with disabilities

E. 

ex-employees (retired)

A. 

the terms and conditions of health insurance should not be based on risk factors.

B. 

the terms of health insurance should not be a subterfuge to deny benefits to those with disabilities.

C. 

employers with no risk-based programs are in stronger positions.

D. 

employers who make changes after hiring employees with disabilities are in a stronger position.

E. 

employees with disabilities have greater access to health coverage than other employees with the same health coverage plan.

A. 

Health care

B. 

Pension

C. 

Life insurance

D. 

Stock ownership

E. 

Disability insurance

A. 

pay-as-you-go

B. 

accrual

C. 

annual

D. 

subtraction

E. 

monthly