1. To qualify under ERISA, a pension plan must?
A. Be explained verbally to employees.
B. Allow special provision for highly compensated executives.
C. Include a vesting schedule.
D. Allow all employees to participate.
1. The correct answer is C. The plan must be in writing and communicated to employees, and it must contain a vesting schedule that lets employees know when they are eligible for accrued benefits. D is not correct since employees cannot contribute until they satisfy eligibility requirements.
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2. An employee who is on FMLA leave because of a serious health condition decides not to return to work at the end of 12 weeks. In this situation, the?
A. Employer may not charge the employee for any health insurance premiums paid on behalf of the employee while the employee was on leave.
B. Employee is entitled to maintain health benefits coverage for 18 months from the date the leave begins.
C. Employee many extend the leave for as long as necessary, with the approval of a physician.
D. Employee is entitled to maintain health benefit coverage for 18 months from the date the leave expired.
2. The correct answer is D.
According to COBRA, the employee is entitled to maintain health insurance for 18 months, beginning at the expiration of the leave, which coincides with termination of employment.
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3. An employee’s son is no longer eligible for coverage under the company’s health plan. According to COBRA regulations, the dependent is eligible for how many months of insurance continuation?
A. 18
B. 29
C. 36
D. 48
3. The correct answer is C.
A dependent who loses dependent status may continue benefits for 36 months.
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4. Which of the following statements about Medicare is true?
A. Parts A and B of Medicare are mandatory.
B. Eligibility is dependent on a person’s income and ability to pay.
C. Only retired individuals age 65 and over are eligible.
D. Medicare is secondary for employees over 65 covered by another plan.
4. The correct answer is D. For working employees over the age of 65, the employer’s health plan is primary. A is incorrect because only Part A of Medicare is mandatory. B is incorrect because eligibility is not dependent on income or ability to pay. C is incorrect because you don’t have to be retired to be eligible; all individuals are eligible at age 65 whether or not they are still working.
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5. Which of the following statements about worker’s compensation is true?
A. It covers all workers’ health problems.
B. It is funded by employers and regulated by the federal government.
C. It is paid even if an accident is the employee’s fault.
D. It pays all injured workers the same benefits.
5. The correct answer is C. Employers assume all costs of work‐related injuries, regardless of who is to blame. A is incorrect because workers’ compensation covers only those conditions that are caused, aggravated, precipitated, or accelerated by work activity. B is incorrect because although workers’
compensation is funded by the employer, it is regulated by the states, not the federal government. D is incorrect because compensation is tied to fixed schedules of minimum and maximum payments and is often based on the employee’s earnings at the time of the injury and the nature of the impairment.
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6. A company that offers a defined benefit plan to its employees and funds the plan using a final‐pay formula bases benefits on?
A. A set dollar amount for each year of service under the plan.
B. A percentage of the average earnings of the employee over the years of the plan.
C. Average earnings for a specified number of years at the end of the employee’s career.
D. A percentage of pay for each year of plan participation.
6. The correct answer is C.
The final‐pay formula looks at the final years of a participant’s career (usually five), based on the presumption that earnings will be greatest then. A is incorrect because it describes a flat‐dollar formula. B and D describe career‐average formulas.
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7. Which of the following is true about a cash balance plan?
A. Money deposited into the account has already been taxed.
B. Benefits are not affected by decreases in the fund.
C. Employees assume the investment risk of the plan.
D. Employees are required to take a lifetime annuity at retirement.
7. The correct answer is B. Increases or decreases to the fund do not directly affect the benefit promised to the employee, and the employer assumes the risks and rewards on plan assets. At retirement, employees may take a lump‐sum distribution or a lifetime annuity. Money in the plan is tax‐deferred, and employees can do a lump‐sum rollover into an IRA or a plan that accepts rollovers.
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8. Which of the following statements about defined contribution plans is true?
A. Employees have an ongoing requirement to contribute to the plan.
B. Employees of not‐for‐profit or public‐
sector organizations are not eligible.
C. Employers have an obligation to contribute to the plan.
D. Employees assume risk in relation to how well the plan does.
8. The correct answer is D. The employee assume all risk related to how well the plan does. Employees assume the risk, which is related to inflation and interest rates over the years.‘A’ is incorrect because employees may elect not to contribute to the plan.‘B’ is incorrect because not‐for‐profit and public‐
sector employees may participate in comparable plans such as 403(b) and 457 plans.‘C’ is incorrect because employer contributions are not required.
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9. Which of the following is a retirement savings plan for employees of certain tax‐
exempt organizations such as public schools and hospitals?
A. 457 plans
B. 403 (b) plans
C. Money purchase plans
D. Section 125 plans
9. The correct answer is B.
Section 403 (b) of the Internal Revenue Code creates retirement savings plans for certain tax‐exempt organizations such as K‐12 public schools, colleges, universities, hospitals, libraries, philanthropic organizations, and churches.
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10. What is the advantage of non‐qualified deferred compensation plans?
A. They allow all company employees to contribute more than the limits prescribed by qualified plans.
B. They are not subject to ERISA and are protected from creditors.
C. They provide incentives for key management to stay with the organization.
D. They provide more favorable tax advantages to employers than qualified plans.
10. The correct answer is C. Nonqualified deferred compensation plans allow organizations to provide additional benefits to a select group of key executives, which motivates them to stay with the organization. “A” is incorrect because all company employees cannot participate; company‐wide plans must be administered as qualified plans. “B” is not correct because although non‐qualified plans are not subject to ERISA, the funds are not protected against bankruptcy, receivership, or creditors. “D” is incorrect because the tax ramifications for employers are less favorable than for qualified plans.
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11. Which of the following managed care plans will not cover any services provided outside of the network?
A. EPO
B. PPO
C. POS
D. PPA
11. The correct answer is A.
An EPO (Exclusive Provider Organization) requires participants to use providers in the network or no payment will be made. The PPO (Preferred Provider Organization) and PPA (Preferred Provider Arrangement) permit access to treatment outside the network, but there may be additional costs. The POS (Point‐Of‐Service) organization is a combination of a PPO and a PPA and permits access to specialists.
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12. Which of the following statements about long‐term disability protection is generally true?
A. It is integrated with Social Security Benefits.
B. It expires after 26 weeks of disability.
C. It becomes effective once an employee’s sick‐leave benefits expire.
D. It covers both work‐ and non‐work‐
related injuries.
12. The correct answer A. Long‐term coverage is usually integrated with Social Security to avoid duplication of disability coverage. “B” is incorrect because there is no set number of weeks for coverage; it can begin at an early age and last until age 65. “C” is incorrect because long‐term coverage generally does not become effective until an employee has exhausted both sick leave and short‐term coverage. “D” is incorrect because work‐
related injuries are covered under workers’ compensation.
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13. Starting in January, an employee sets aside $100 a month in a flexible spending account. The employee files a $1,200 medical claim in February. If the employee leaves the firm in March, the employee is?
A. Entitled to full reimbursement of $1,200.
B. Entitled only to the amount of money paid into the account.
C. Able to pay into the account after employment is terminated.
D. Not entitled to any reimbursement.
13. The correct answer is A. If qualified non‐reimbursed expenses are incurred prior to the termination of employment, they are covered. (However, this rule does not apply to dependent care reimbursement accounts.) The benefit is no longer in effect once employment is terminated.
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14. The Financial Accounting Standards Board (FASB) is a private body that?
A. Determines which compensation plans a company should offer to its employees.
B. Interprets IRS revenue rulings if requested by an organization. C. Enforces accounting standards of organizations.
D. Determines how financial information should be reported to shareholders.
14. The correct answer is D.
The formation of the FASB marked the separation of the standards‐setting process from the accounting profession. The FASB derives its authority from the Securities and Exchange Commission and decides how financial executives should report financial information to shareholders.
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15. An employee opts to save money in a tax‐
deferred account to be used to pay for a child’s college education in the future. This type of plan is most likely a
A. Money purchase plan
B. 401(k) plan
C. 401(b) plan
D. 529 plan
15. The correct answer is D.
A 529 plan is a tax‐advantaged investment vehicle in designed to encourage saving for the future higher education expenses of a designated beneficiary.
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16. Taxable vs. Nontaxable Compensation
Label the following T for taxable and N for nontaxable.
A.
B.
C.
D.
E.
F.
G.
H.
I.
Bonuses
Employer health plan contributions
Company vehicle for business use
Sick pay
Tips
$500 parking allowance
Back pay awards
Severance pay
Discount on employer products
16. Taxable vs. Nontaxable Compensation Answers:
A.
B.
C.
D.
E.
F.
G.
H.
I.
T
N
N
T
T
T
T
T
N
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17. On average, benefits costs are ___% of employers’ payroll. a. 10%
b. 20%
c. 40%
d. 60%
17. The correct answer is C.
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18. Betty is interviewing for a job with two different firms. One is a start‐up company, the other is a mature firm that has operated in her home community since 1953. The job description and salary are identical. Betty can expect that
a. the start‐up firm will have more generous benefits.
b. the mature firm will have more generous benefits. c. the benefits will be the same at both companies, since benefits are based on salary. d. the mature firm will likely offer no benefits, because older firms are encountering cost‐
pressures. 18. The correct answer is B.
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19. A/an __________ is an audit of the services and costs billed by health‐care providers. a.
b.
c.
d.
utilization review
practice analysis
cost/benefit analysis procedural review
19. The correct answer is A.
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20. Strategic benefit considerations include all of the following EXCEPT a.
b.
c.
d.
benefits design
benefits as competitive advantage cost control and measurement mandatory benefit offerings 20. The correct answer is D.
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21. Which of the following is considered a strategic goal of wellness by employers? a.provide the benefits that are mandated by government b.reducing employee absenteeism and turnover c.cutting the per‐employee compensation cost d.minimize the tax consequences for employees 21. The correct answer is B.
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22. Tamika is an ambitious 22‐year‐old single woman who is on the job market for the first time after graduating with her bachelors degree in business. She is a top‐quality candidate for whom employers are competing. All other factors being equal, the employer who will be more attracted to Tamika will have a.
b.
c.
d.
excellent retirement and pension benefits medical and dental insurance.
portable flexible benefits. top quality elder care benefits. 22. The correct answer is C.
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23. A major advantage of benefits to employees is that they are
a. generally not taxable as income.
b. generally taxed at a lower rate than earned income. c. calculated as a tax deduction in states where there is a state income tax. d. not reported to the IRS. 23. The correct answer is A.
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24. As the director of compensation for multi‐plant bakery, Jeff is reviewing his company’s benefit design. He must answer all of the following questions EXCEPT
a. Which of the mandatory benefits can be dropped with the least negative impact on employee attitudes? b. How much total compensation should be offered? c. What is the firm receiving in return for each benefit provided? d. How flexible should the package of benefits be? 24. The correct answer is A.
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25. Which of the following statements is TRUE? a. Part‐time employees must receive benefits if the company offers full‐time employees benefits. b. Part‐time employees are required to receive mandatory benefits, but are forbidden by law to receive voluntary benefits. c. If part‐time employees receive benefits, they are usually higher in cost than those received by full‐time employees. d. Part‐timers usually receive pro‐rated medical benefits, but no time‐off benefits because they already work a reduced schedule. 25. The correct answer is C.
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26. Those benefits which employers in the United States are required to provide by law are called ____________ benefits. a.
b.
c.
d.
obligatory regulated compulsory mandated
26. The correct answer is D.
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27. One reason why employers face increasing pressure regarding benefits is that a. federal and state governments want to shift many of the social costs for health care and other expenditures to employers. b. private industry can provide these services more efficiently than government. c. unions are becoming more aggressive in contract negotiations. d. firms need to compete for quality employees in a tight labor market. 27. The correct answer is A.
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28. Which of the following benefits are NOT mandated by federal legislation? a.
b.
c.
d.
pension plan coverage
social security unemployment insurance workers’ compensation insurance. 28. The correct answer is A.
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29. What is workers compensation? a. the pay and benefits package provided to employees who are laid off for financial reasons. b. benefits provided to persons injured on the job
c. law‐suit judgments awarded to workers injured on the job d. the employee’s total pay package: wages plus benefits 29. The correct answer is B.
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30. How is workers’ compensation usually funded? a. by a tax levied on employers by state governments based on the employer’s size of payroll
b. by contributions from a pool of organizations in the same industry
c. through the Social Security Administration d. by insurance purchased by employers from a private carrier or state insurance fund
30. The correct answer is D.
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31. To be eligible for workers’ compensation, the worker must
a. suffer a work‐related injury or illness. b. be employed by a federally‐insured employer.
c. not have contributed to the cause of the injury. d. prove that the accident was caused by employer negligence. 31. The correct answer is A.
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32. In exchange for workers’ compensation benefits, employees a. forfeit use of medical insurance. b. can be required to attend safety‐awareness seminars.
c. give up the right to legal actions and awards. d. are required to pay a portion of the insurance premiums. 32. The correct answer is C.
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33. Who administers unemployment compensation? a.
b.
c.
d.
the federal government the individual states the U.S. Department of Labor the employer itself 33. The correct answer is B.
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34. What is the basis for determining the employer’s cost of unemployment compensation?
a. the type of business and its known seasonal fluctuations b. the number of covered employees c. the total cost of payroll
d. the number of claims filed by workers who leave 34. The correct answer is D.
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35. What is a SUB program? a. It is a benefit, negotiated by a union, requiring an employer to contribute to a fund that pays laid‐off workers an amount over and above regular unemployment compensation. b. It provides for severance pay in those cases where a unionized company closes down. c. Businesses with seasonal work that uses subcontractors rather than hire and lay off people use this program instead of regular workers’ compensation. d. It is an additional payment in excess of unemployment compensation that is paid by the employers to prevent lawsuits by laid off employees. 35. The correct answer is A.
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36. __________ is a security benefit voluntarily offered by employers to employees who lose their jobs. a.
b.
c.
d.
Unemployment insurance
Supplemental unemployment benefit Severance pay
An exit bonus 36. The correct answer is C.
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37. What is the principle requirement of the Worker Adjustment and Retraining Notification Act (WARN) of 1988? a. Employers must give severance pay to workers who lose their jobs permanently. b. Most employers must give 60 days’ notice if a mass layoff or facility closing is to occur. c. Workers must be given full disclosure regarding and hazardous materials present at the work site. d. Workers under age 60 are entitled to a retraining allowance if their jobs are eliminated. 37. The correct answer is B.
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38. As a result of a 1986 amendment to the Age Discrimination in Employment Act (ADEA), most employees cannot be forced to retire
a.
b.
c.
d.
before age 60. before age 65. before age 70.
at any specific age. 38. The correct answer is D.
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39. Valerie has worked for a major insurance company for 25 years. She is a widow and most of her social life revolves around work and friends from work. Her job performance has been consistently high, and she has been steadily promoted over the years and is now in a mid‐level professional position. Recently, Valerie’s company instituted an early retirement program. Valerie feels her manager and the HR department put undue pressure on her to take the retirement package although she would have preferred to stay on the job. If Valerie wished to sue, the appropriate law would be
a.
b.
c.
d.
the Employee Retirement Income Security Act (ERISA) the Social Security Act (SSA) the Worker Adjustment and Retraining Notification Act (WARN) the Older Workers Benefit Protection Act (OWBPA) 39. The correct answer is D.
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40. An accounting rule (FASB 106) that addresses retiree benefits a. permits health‐care benefits to be paid out of current yearly income.
b. requires that firms establish accounting reserves for funding retiree health‐care benefits. c. permits health costs to be taken from after‐tax dollars. d. requires a pool of funds that is at least 60% of health‐care liability costs. 40. The correct answer is B.
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41. Hugo is 45 and he has been laid off by his employer who is moving his job as a customer service representative to a company in India. Hugo figures he will need to work at least 20 more years and he has little money in savings set aside for retirement. Hugo wants to find a job at an employer that is likely to have a pension plan. Which of the following employers would be MOST likely to have a pension plan? a. a start‐up pharmaceuticals research firm
b. a printing company with 63 employees c. a unionized manufacturing firm with 4,450 employees
d. a world‐famous restaurant in a popular vacation spot
41. The correct answer is C.
41
42. Which of the following benefits is not provided by the Social Security System? a.
b.
c.
d.
displacement disability
survivor
old age
42. The correct answer is A.
42
43. How are Social Security benefits funded? a. an employer tax based on the employer’s “experience rating” b. deductions from the employee’s paycheck which are paid to the federal government c. a tax on employee wages and salaries paid equally by employers and employees
d. general tax revenues 43. The correct answer is C.
43
44. Retirement benefits established and funded by employers are a. mandatory for employers with over 100 employees. b. not mandatory. c. regulated by state laws rather than federal legislation. d. not valued by older employees.
44. The correct answer is B.
44
45. In a _____plan the employer makes an annual payment to an employee’s pension account. a.
b.
c.
d.
vested defined benefit
non‐contributory defined‐contribution
45. The correct answer is B.
45
46. ESOPs, 401(k) plans, and profit‐sharing plans are all examples of
a.
b.
c.
d.
mandatory retirement plans defined‐contribution plans. defined‐benefit plans. cash‐balance plans. 46. The correct answer is B.
46
47. _______________ are more risky from the point of view of retirees than ___________. a.
b.
c.
d.
defined benefit, defined contribution
defined contribution, defined benefit contributory plans, non‐contributory plans non‐contributory plans, contributory plans
47. The correct answer is B.
47
48. A pension plan in which retirement benefits are based on an accumulation of annual company contributions (as a percentage of the employee’s pay) plus interest credited each year is called a ___________ plan. a.
b.
c.
d.
contributory retirement self‐funding cash balance defined contribution 48. The correct answer is C.
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49. All of the following are requirements of the Employee Retirement Income Security Act (ERISA) EXCEPT a. Employers must offer retirement benefits for all full‐time employees after five years’ service. b. Plans must meet minimum funding requirements. c. Employers must pay termination insurance to ensure employee pensions will be there even if the company goes out of business. d. Accrued benefits in the pension plan must be given to employees when they retire or leave. 49. The correct answer is A.
49
50. In a contributory pension plan, the money for pension benefits is paid by the a. federal government. b. employee through pre‐tax deductions from his/her pay. c. both employees and employers. d. by the employer. 50. The correct answer is C.
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51. In a _______ pension plan, all the funds for pension benefits are provided by the employer.
a.
b.
c.
d.
defined‐benefit
contributory vested
defined‐contribution
51. The correct answer is A.
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52. George and Harriet are getting a divorce after 32 years of marriage. George has been a self‐
employed architect, whereas Harriet has worked for a car manufacturing company the entire marriage. According to ERISA, what will govern who gets the assets in Harriet’s retirement plan is the a. state law governing divorce.
b. Older Employee Protection Act. c. Qualified Domestic Relations Order. d. Spousal and Domestic Partner Separation Act. 52. The correct answer is C.
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53. ________ is the right of employees to receive benefits from their pension plans if they remain with their employer a certain period of time. a.
b.
c.
d.
Qualifying
Portability Entitling Vesting 53. The correct answer is D.
53
54. When an employee rolls over their retirement account balance from one employer to another, this is an example of
a.
b.
c.
d.
Portability Mobility
Vesting Transferability 54. The correct answer is A.
54
55. A 401(k) plan is an agreement in which a. a percentage of an employee’s pay is withheld and invested in a tax‐deferred account. b. an employee can pre‐pay taxes on future pension income. c. the individual pension plans are established for self‐employed people. d. the benefits of the pension plan are guaranteed by the government. 55. The correct answer is A.
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56. Why are utilization reviews conducted? a. Employers need cost/benefit analysis of services provided by their PPO. b. The government requires an annual audit of health‐care expenditures.
c. Many employers found that some of the health care provided by doctors and hospitals is unnecessary, incorrectly billed, or deliberately overcharged. d. Labor unions need accurate costing of benefits for contract negotiation purposes. 56. The correct answer is C.
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57. _____________ consists of approaches that monitor and reduce medical costs using restrictions and market system alternatives. a.
b.
c.
d.
Monitored health plans Medical review Programs Managed Care Medical Option Plans 57. The correct answer is C.
57
58. A ________ is a health‐care plan that contracts with providers and health‐care systems to provide health‐care services to plan members at a competitive rate. a.
b.
c.
d.
contractual medical organization (CMO) preferred provider organization (PPO)
public/private health organization (PPH) health maintenance organization (HMO) 58. The correct answer is B.
58
59. A system in which the employer makes defined contributions to each employee’s “account” and the employee decides how to use this to cover his/her health‐related expenses is called a/an _________ plan. a.
b.
c.
d.
consumer‐driven health
contributory health insurance
self‐directed health individual HMO 59. The correct answer is A.
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60. For employers, the advantages to consumer‐
driven health plans are that the employees themselves are in control of health‐care usage and
a. health‐care usage rates typically fall significantly.
b. employer contributions to the plans usually do not rise as fast as health‐care costs. c. employees are well‐prepared to make decisions about how to spend their health‐
care dollar.
d. employees use these funds extensively for wellness programs, especially for weight‐loss and smoking cessation. 60. The correct answer is B.
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61. What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to healthcare? a. Employers with more than 50 employees must provide medical insurance for all full‐time employees. b. Most employers with 20 or more employees must offer extended health‐care coverage to employees after they leave the organization.
c. Employer contributions to Medicare were raised to 2.9 percent of payroll. d. Employers offering medical insurance cannot exclude pre‐existing conditions from coverage. 61. The correct answer is B.
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62. Which of the following is NOT a COBRA qualifying event? a. Employee lay‐off for financial reasons
b. Death of employee c. Divorce of employee d. Employee termination for gross misconduct
62. The correct answer is D.
62
63. Which of the following health plans allows an employer the option to add a $500 carryover provision?
a.
b.
c.
d.
Premium‐only plans
Flexible spending accounts
Full cafeteria plans
Indemnity plans
63. The correct answer is B.
63
64. A plan that allows employees to contribute pre‐
tax dollars to pay for eligible out of pocket healthcare expenses is called a
a.
b.
c.
d.
Flexible spending account.
Benefit incentive plan.
Tax‐deferred benefit option.
Cafeteria‐style plan. 64. The correct answer is A.
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65. Which of the following employer‐paid benefits would an employee receive tax‐
free?
a. Ten days of sick leave at 100% of original salary.
b. $1,500 for taking a computer class at a community college.
c. $500 award for a labor‐saving suggestion.
d. Two weeks of paid vacation.
65. The correct answer is B.
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66. Mike is taking a job at a growing computer‐
manufacturing company. One of the reasons he took the job is because if he bought stock in the company, the company would match the amount he invested. Mike feels that this would allow him to benefit from the company’s growth, over and above just getting his regular salary and other benefits. This kind of plan is called a/an ___________ plan. a.
b.
c.
d.
Employee ownership Investment
Stock purchase
Matching investment 66. The correct answer is C.
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67. Angela, who lives in Alabama, recently turned down an attractive job offer as an assistant director of marketing from a firm in Oregon because it would not provide assistance in finding a job for her husband or assistance in buying a new home in Oregon, where house prices are much more expensive than in Alabama. It appears that the Oregon firm a. Did not view Angela as a highly desirable prospective employee. b. Does not have a relocation assistance program. c. Does not offer benefits for domestic partners. d. Is discriminating against women. 67. The correct answer is B.
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68. Long term disability insurance
a. Is a mandatory security benefit for non‐
governmental employers with over 50 employees. b. Allows employees to accrue sick leave for time‐limited emergency needs. c. Pays for long term care such as nursing home, assisted living, and home health‐care. d. Provides continuing income protection for employees who become or are unable to work because they are disabled. 68. The correct answer is D.
68
69. Roger’s mother is in the early stages of Alzheimer’s disease, and Roger’s father also died of Alzheimer’s. Roger, who is 59, is very concerned that he will develop this disease as well. Roger would be most pleased if his company offered
a.
b.
c.
d.
An integrated disability management plan. Employee wellness program. Long‐term care insurance. Flexible spending accounts. 69. The correct answer is C.
69
70. Paula, the director of HR for a major bank, is designing a tuition aid program for the employees. She wants to assess whether the program will have a good return on investment for the bank. To do so, she is building in a long‐
range assessment that will measure all of the following EXCEPT a. Employee satisfaction with the program. b. Retention of employees who have used tuition aid. c. Internal promotions of employees who have used tuition aid. d. Degrees earned by employees on tuition aid. 70. The correct answer is D.
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71. The Family and Medical Leave Act requires that eligible employees be permitted to take leave for each of the following except: a. Caring for a brother or sister with a serious health condition. b. Adoption of a child. c. Caring for a parent with a serious health condition.
d. Serious health condition of the employee. 71. The correct answer is A.
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72. The Family and Medical Leave Act of 1993, requires that employers allow eligible employees to take a total of _____ during any _____ period. a.
b.
c.
d.
12 weeks’ paid leave; 12‐month 24 weeks’ paid leave; 24‐month 12 weeks’ unpaid leave; 12‐month 24 weeks’ unpaid leave; 24‐month 72. The correct answer is C.
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73. The Family and Medical Leave Act (FMLA) defines a _______ as one requiring in‐patient, hospital, hospice, or residential medical care of continuing physician care. a.
b.
c.
d.
Medical leave event Serious health condition Life threatening illness Covered health situation 73. The correct answer is B.
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74. The Family and Medical Leave Act (FMLA) of 1993 provides that a. Employees must be able to return to their former job following the leave. b. The FMLA leave “clock” begins after all vacation and personal days have been used. c. The leave must be taken as one 12‐week block. d. Health benefits must be continued during the leave at the same level and conditions.
74. The correct answer is D.
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75. Of the following, the group that makes the heaviest use of FMLA leave is
a. Middle‐ages employees who take leave for their own ailments and the medical problems of their aged parents. b. Women, primarily due to childbirth. c. Older employees, near retirement, because they are developing serious health conditions. d. Young men, aged 18‐24, due to their high level of automobile accidents and sports injuries. 75. The correct answer is B.
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76. A major problem facing employers in dealing with the FMLA is a. Widespread resentment by employees without families, leading to lower morale and lower satisfaction.
b. Employees suing because they feel stigmatized by the employer when they request family leave. c. Abuse of family leave by employees who are actually not experiencing qualifying events. d. Covering the workload for employees on family leave. 76. The correct answer is D.
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77. Which of the following is NOT a typical offering of a company child‐care benefit? a. Higher pay for employees with multiple children b. Sick‐child programs jointly offered with hospitals c. After‐school programs, jointly offered with a school system d. On‐site daycare 77. The correct answer is A.
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78. ____________ is the generic term for programs providing employees with assistance in caring for aged relatives. a.
b.
c.
d.
Elder care Family security Care‐giver respite
A hospice program 78. The correct answer is A.
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79. When promoting family‐friendly benefits to top management, the director of HR’s best argument for their effectiveness is in a. Recruiting top quality candidates b. Aiding employee retention. c. Increasing morale of employees with families. d. Reducing the number of complaints, grievances, and lawsuits by employees with families. 79. The correct answer is B.
79
80. George, the director of HR, is writing the “Affidavit of Spousal Equivalence” that non‐
traditional couples will need to sign in order to receive domestic partner benefits. George will require the couples to make all the following affirmations EXCEPT a. Each is the other’s only spousal equivalent.
b. They are not blood relatives.
c. They have children in their legal custody for whom they are jointly responsible.
d. They are living together and jointly share responsibility for their common welfare and financial obligations. 80. The correct answer is C.
80
81. Which of the following time‐off activities is NOT required by law? a.
b.
c.
d.
Jury duty
Military duty
Bereavement Voting 81. The correct answer is C.
81
82. A typical abuse‐control measure to keep employees from taking excessive time off around holidays is to a. Require employees to work the first and last scheduled workdays around the holiday. b. Allow only employees with significant seniority (e.g., five years) to combine holidays with vacation days to extend the employees’ time off. c. Pay employees time‐and‐a‐half for working the day the immediately following or preceding a holiday. d. Allow employees to “bank” holidays and take the days off at less busy times of year. 82. The correct answer is A.
82
83. A program that combines sick leave, vacations, and holiday’s into a total number of hours or days that employees can take off with pay is a/an _________ plan.
a.
b.
c.
d.
Consolidated time‐off Total leave Accumulated leave Paid time‐off 83. The correct answer is D.
83
84. Anna has been called to serve her duty as a reserve officer in the Marines; and she is leaving for the war zone in 30 days. Which of the following statements is TRUE? a. Anna’s employer is required by federal law to pay her the difference between her military pay and her civilian pay. b. Anna’s employer is not required to grant military leave. Anna may lose her job. c. Anna’s employer can require her to use up her three weeks of paid vacation while she is deployed. d. Anna’s employer is not required by law to pay her while she is on military duty. 84. The correct answer is D.
84
85. One of the main responsibilities that managers have regarding benefits administration is to a. Coordinate special pre‐requirement programs. b. Answer technical questions on benefits. c. Coordinate the use of time‐off benefits. d. Assist employees in filing benefit claims. 85. The correct answer is C.
85
86. A Total Compensation Statement
a. Is the report required by ERISA. b. Shows each employee how much his/her benefits are worth. c. Is a tool that allows employees to choose the type of benefits that best fits their personal needs. d. Is given to an employee upon termination so that he/she is knowledgeable about COBRA, severance pay, unemployment, and other continuing benefits. 86. The correct answer is B.
86
87. A byproduct of the extensive use of the Internet for employee benefit enrollment and communications has been a/an a. Reduction in HR staff.
b. Employee concern about security of personal information. c. Increase in benefits administration costs on a per capita basis. d. Increase in errors in employee records.
87. The correct answer is A.
87
88. The purpose of a flexible benefits plan is to
a. Allow employees to contribute pre‐tax dollars to buy additional benefits. b. Continuously update benefit options as employee needs and desires change. c. Combine all time‐off benefits into a total number of house that employees can take off with pay. d. Allow employees to select the benefits they prefer from groups of benefits established by the employer. 88. The correct answer is D.
88
89. A problem with flexible benefit plans is ____________. A situation in which only higher risk employees select and use certain benefits. a.
b.
c.
d.
Risk enhancement Augmented liability Adverse selection The high‐risk employee effect 89. The correct answer is C.
89
90. Direct compensation includes which of the following?
a.
b.
c.
d.
Flexible Benefits
Long‐term incentive pay
Worker’s Compensation
Unpaid leave
90. The correct answer is B.
90
91. Indirect compensation is represented by which of the following:
a.
b.
c.
d.
Social Security benefits
Short‐term incentive pay
Differential pay
Merit pay
91. The correct answer is A.
91
92. An audit and review of the services and costs billed by health‐care providers is known as
a.
b.
c.
d.
Procedural review
Practice analysis
Utilization review
Operational control
92. The correct answer is C.
92
93. Which is an example of health‐related services that would be under the area of employee assistance programs?
a.
b.
c.
d.
Smoking cessation
On‐the‐job accident protection
Family and marital counseling
High blood pressure control
93. The correct answer is C.
93
94. One strategic business reason for offering a comprehensive benefits package to employees is:
a.
b.
c.
d.
To help attract and retain employees
To beat out the competition
To decrease employer operating costs
To offer cafeteria‐style health care plans to employees. 94. The correct answer is A.
94
95. Which of the following is a legally mandated benefit?
a.
b.
c.
d.
Social security
Unemployment compensation
Worker’s compensation
All of the above
95. The correct answer is D.
95
96. What provides counseling and other help to employees having emotional, physical and other personal problems?
a.
b.
c.
d.
Employee assistance programs
Drug Free Workplace Act
OSHA
Wellness programs
96. The correct answer is A.
96
97. Which of the following is a funding feature of a health plan?
a.
b.
c.
d.
HMO coverage
PPO coverage
Self‐insurance
Office visits
97. The correct answer is C.
97
98. A security benefit voluntarily offered by employers to employees who lose their job?
a.
b.
c.
d.
COBRA
Severance pay
Unemployment compensation
Supplemental Pay
98. The correct answer is B.
98
99. True or False:
The biggest cost increases in benefits have been in pension programs, causing pressure on employers to reduce pensions for retirees
99. The correct answer is False.
99
100. True or False:
The U.S. has some of the stingiest average annual vacation policies in the developed world.
100. The correct answer is True.
100
101. True or False:
Strategic benefits management includes measuring and evaluating general benefits expenses as well as costs for individual benefits.
101. The correct answer is True.
101
102. True or False:
The complexity of the unemployment compensation system and the stigma attached to receiving unemployment means that most people qualified to receive unemployment compensation never actually use the system.
102. The correct answer is True.
102
103. True or False:
It is illegal for employers to base predictions about pension plans on “normal” retirement age, as there is no mandatory age for retirement.
103. The correct answer is False.
103
104. True or False:
Most U.S. citizens have inadequate savings and retirement benefits to fund their retirement.
104. The correct answer is True.
104
105. True or False:
Because Social Security and Medicare are such politically‐sensitive programs, the payroll taxes paid by employers and employees have remained fixed over the last 30 years.
105. The correct answer is False.
105
106. True or False:
Unionized employers are more likely to have a defined‐benefit plan than are non‐unionized employers.
106. The correct answer is True.
106
107. True or False:
“Unisex” mortality tables are no longer legal for calculating pension payments for women, since these tables did not take into account that women live longer than men do on average.
107. The correct answer is False.
107
108. True or False:
The costs of health care have increased more than the level of inflation in the last 10 years.
108. The correct answer is True.
108
109. True or False:
An advantage of unemployment compensation is that the way it is funded by a tax on employers, state unemployment funds are able to remain unaffected by economic downturns.
109. The correct answer is False.
109
Benefits
Total Rewards
110