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MBA - HRM Human Resource Management 2017 - Managing Human Resources, 8e (Gomez-Mejia et al.) - Quiz 12

HRM Human Resource Management

MBA - Human Resource Management 2017

Managing Human Resources, 8e (Gomez-Mejia et al.)

Chapter 12   Designing and Administering Benefits

 

 

 

1) With regards to employee benefits, the United States differs from other developed countries in that:

  1. A) the United States government covers the costs of most employee benefits.
  2. B) United States employers provide a small percentage of employee benefits.
  3. C) most other countries provide better benefits than the United States.
  4. D) United States employers provide most of their employees' benefits.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

2) Sadie is meeting with her boss to discuss her indirect compensation, which is another term for:

  1. A) nonmonetary perks.
  2. B) employee benefits.
  3. C) base pay.
  4. D) total compensation.

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

 

3) Employee benefits are used to:

  1. A) reward employee performance.
  2. B) provide security for employees.
  3. C) motivate greater productivity.
  4. D) comply with federal regulation.

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

4) The benefits portion of a compensation package most likely plays an important role in:

  1. A) rewarding employees' performance.
  2. B) attracting and retaining employees.
  3. C) managing the profits of the company.
  4. D) managing employee performance.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

5) American companies spend an average of nearly ________ per year per employee on benefits.

  1. A) $9,000
  2. B) $12,000
  3. C) $20,000
  4. D) $25,000

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

6) Which of the following accounts for the largest portion of indirect compensation paid by most employers?

  1. A) Legally required benefits
  2. B) Payments for time not worked
  3. C) Retirement and savings plans
  4. D) Life and disability insurance

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

7) Effective employee benefits packages:

  1. A) help firms train and motivate their employees.
  2. B) maximize traditional insurance coverage.
  3. C) help firms recruit and retrain employees.
  4. D) replace the need for unemployment insurance.

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

 

8) Retirement benefits are primarily an effective employee retention tool because they:

  1. A) provide valuable tax savings to employers.
  2. B) decrease in value when an employee job-hops.
  3. C) increase over the time that an employee works for a firm.
  4. D) offer employees the opportunity to take early retirement.

Answer:  C

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

9) Which term refers to annual out-of-pocket expenses that an insurance policyholder must make before an insurance plan makes any reimbursements?

  1. A) Co-payment
  2. B) Contribution
  3. C) Coinsurance
  4. D) Deductible

Answer:  D

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

10) Kevin's new employer informs him that he will be allowed a flexible benefits program for the duration of his employment at Comfortable Furniture. This means that Kevin will most likely be able to:

  1. A) receive paid time off after six months with the firm.
  2. B) select the benefits he wants most from a menu of options.
  3. C) receive more direct compensation by forfeiting employee benefits.
  4. D) reduce his coinsurance payments by selecting a managed care plan.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

 

11) Employee benefits accounted for about ________ of employers' payrolls in 2013.

  1. A) 10%
  2. B) 20%
  3. C) 30%
  4. D) 40%

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

 

12) Raj has personal investment plans for retirement. He also is involved with his company's retirement plan; his company contributes to his retirement each month. His personal contributions are ________, and his company's contributions are ________.

  1. A) tax-free / tax-deferred
  2. B) tax-deferred / tax-deferred
  3. C) tax-deferred / tax-free
  4. D) tax-free / tax-free

Answer:  C

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

13) Social Security and unemployment insurance benefits originated in:

  1. A) 1971.
  2. B) 1964.
  3. C) 1958.
  4. D) 1935.

Answer:  D

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

14) Which of the following is most likely true?

  1. A) Unions have done very little with regard to indirect compensation for members.
  2. B) Benefits given at unionized firms are typically given at nonunionized firms at a later date.
  3. C) Most large unions have been unsuccessful at securing and retaining pensions for members.
  4. D) Unions rarely request employee benefits beyond those that are legally required.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

15) Legally required benefits include only:

  1. A) health insurance.
  2. B) life insurance.
  3. C) medical leave.
  4. D) disability insurance.

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

 

16) All of the following are legally required benefits EXCEPT:

  1. A) paid time off.
  2. B) Social Security.
  3. C) workers' compensation.
  4. D) unemployment insurance.

Answer:  A

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

17) The growth of benefits costs has pushed employers to:

  1. A) diversify the workforce.
  2. B) hire more part-time employees.
  3. C) move from managed care to traditional health insurance.
  4. D) ask for more government intervention in the health industry.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

18) Health insurance typically covers all of the following EXCEPT:

  1. A) prescriptions.
  2. B) medical leave.
  3. C) hospital costs.
  4. D) physician charges.

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

 

Additional Case 12.1

The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.

 

A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.

 

The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits

administration.

 

19) Refer to Additional Case 12.1. The HR Director's initial explanation is about the ________ of the benefits plan.

  1. A) contributions
  2. B) co-payments
  3. C) deductible
  4. D) flexibility

Answer:  A

Diff: 1

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

20) Refer to Additional Case 12.1. When reviewing the legally required benefits, the HR Director would most likely address:

  1. A) health insurance.
  2. B) pensions and retirement plans.
  3. C) family and medical leave.
  4. D) life and disability insurance.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

 

21) On average, medical benefits and payments for time not worked consume about the same amount of each benefit dollar.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

22) Jessica recently had outpatient surgery. Her insurance plan requires a deductible of $500. This means that the insurance company will pay 100% of the first $500, but after that will only pay a percentage of the bill.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.1: Grasp an overview of benefits

 

23) The cost of employee benefits has risen to nearly 50% of an employer's payroll costs.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

24) Employee contributions to a qualified retirement plan are usually tax-deferred until the employee retires.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

25) Employers are legally required to provide health insurance to employees.

Answer:  FALSE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

26) A benefits program that allows employees to select the benefits they need most from a menu of choices is referred to as a(n) ________.

Answer:  flexible or cafeteria benefits program

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.1: Grasp an overview of benefits

 

 

27) Why are employee benefits significant to both employers and employees? What should an employer consider when developing a benefits mix?

Answer:  Benefits are a powerful recruiting tool, and attractive packages help retain talented employees and reduce turnover. Employee benefits provide security for employees and their family members, and they protect workers from risks that could jeopardize their health and financial security. The benefits mix is the complete package of benefits that a company offers its employees. At least three issues should be considered when making decisions about the benefits mix: the total compensation strategy, organizational objectives, and the characteristics of the workforce.

Diff: 3

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.1: Grasp an overview of benefits

 

28) To design a successful benefits strategy, employers should most likely consider:

  1. A) two areas: benefits amount and the flexibility of benefits.
  2. B) two areas: benefits mix and the flexibility of benefits.
  3. C) three areas: benefits mix, the flexibility of benefits, and the benefits amount.
  4. D) four areas: benefits mix, the flexibility of benefits, the benefits amount, and benefits communication.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

 

29) Melanie is determining what benefits mix will work best for Bob's Building Corp. Which of the following questions is LEAST relevant to Melanie during this process?

  1. A) What are the firm's objectives?
  2. B) What benefits are legally required?
  3. C) What benefits do competitors offer?
  4. D) What are the characteristics of the workforce?

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.2: Develop the benefits strategy

 

30) The benefits amount corresponds to which direct compensation decision?

  1. A) Individual-based pay versus job-based pay
  2. B) Fixed versus variable pay
  3. C) Monetary versus nonmonetary rewards
  4. D) Open versus secret pay

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

 

31) Crescent Control Systems focuses on providing job security and long-term employment opportunities for its employees. Which of the following would most likely support Crescent's strategy?

  1. A) Applying most compensation dollars towards productivity rewards
  2. B) Using a large portion of its compensation budget for benefits
  3. C) Providing workers' compensation coverage to all employees
  4. D) Offering employees variable pay and family leave

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.2: Develop the benefits strategy

 

32) A standardized benefits package is most likely best for a:

  1. A) new company with a highly diverse workforce.
  2. B) firm that employs a homogeneous workforce.
  3. C) firm that wants to provide employees with choices.
  4. D) new company that wants to decentralize benefits.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.2: Develop the benefits strategy

 

Additional Case 12.1

The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.

 

A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.

 

The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits

administration.

 

33) Refer to Additional Case 12.1. This company's benefits mix:

  1. A) matches the firm's culture and objectives.
  2. B) is almost the opposite of what the firm needs.
  3. C) would be better if it included variable pay as well.
  4. D) violates federal law because the firm doesn't offer health care.

Answer:  B

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.2: Develop the benefits strategy

 

34) The benefits mix for a company should be governed by its compensation strategy, its objectives, and the makeup of its workforce.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

 

35) A company that focuses on providing job security and long-term employment is likely to devote a small portion of its compensation dollars to benefits.

Answer:  FALSE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

 

 

36) The ________ is the complete package of benefits that a company offers its employees.

Answer:  benefits mix

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

37) ________ is a government program that provides income for retirees, the disabled, and survivors of deceased workers, and health care for the aged through the Medicare program.

Answer:  Social Security

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.2: Develop the benefits strategy

 

38) Social Security does NOT include which of the following?

  1. A) Retirement income
  2. B) Disability income
  3. C) Workers' compensation
  4. D) Survivors' benefits

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

39) The standard Social Security tax is applied to earnings up to $106,800. Over this amount, employees are taxed at a rate of ________ on all additional earnings.

  1. A) 1.45%
  2. B) 3.2%
  3. C) 5.65%
  4. D) 7.4%

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

40) Sam was born in 1963. What is the earliest age that Sam can retire to receive full Social Security benefits?

  1. A) 65
  2. B) 66
  3. C) 67
  4. D) 68

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

41) Disability income under Social Security:

  1. A) covers all hospital expenses for anyone over age 65.
  2. B) requires 50% disablement for six weeks prior to the beginning of benefits.
  3. C) does not take effect until the individual is over age 65.
  4. D) comes in monthly payments equivalent to 30% of the individual's earnings.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

42) Disability income is provided to employees who are:

  1. A) totally and continuously disabled for 2 months.
  2. B) disabled and cannot work for at least 12 months.
  3. C) disabled and the primary breadwinners of the family.
  4. D) earning less than $20,000/year prior to their disability.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

43) Shirley's husband has recently died. She is eligible for survivor benefits if she:

  1. A) is at least 55 years old.
  2. B) is at least 55 years old and has an unmarried child younger than 19 years of age.
  3. C) cares for a dependent parent of 60 years of age or older.
  4. D) is at least 60 years of age.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

 

44) Workers' compensation:

  1. A) only covers an employee who is not at fault for his/her injury.
  2. B) provides medical care, income, and rehabilitation expenses.
  3. C) replaces 75% of the disabled worker's income.
  4. D) is part of Social Security.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

45) The employee benefit that provides medical care, income, and rehabilitation expenses for individuals who sustain job-related injury or illness is called:

  1. A) workers' compensation.
  2. B) Social Security.
  3. C) survivor benefits.
  4. D) unemployment insurance.

Answer:  A

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

46) Which of the following would LEAST likely improve a firm's workers' compensation costs?

  1. A) Emphasizing safe work procedures to all employees
  2. B) Providing health insurance to high-risk employees
  3. C) Designing jobs to reduce risk of injury
  4. D) Auditing workers' compensation claims

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

47) The rate of workers' compensation tax for employers is based on all of the following factors EXCEPT the:

  1. A) workers' compensation guidelines in the employer's state.
  2. B) employer's injury experience rating.
  3. C) risk of injury for an occupation.
  4. D) number of employees at the firm.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

48) A self-insurance pool is best defined as a:

  1. A) policy in which individual employees are exclusively responsible for their insurance.
  2. B) group of companies who jointly hire an administrator to organize insurance functions.
  3. C) policy offered by insurance companies that allows employees to choose their own benefits.
  4. D) group of individual employees who shop for the most cost-effective health insurance.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

49) Unemployment insurance is:

  1. A) paid for through union dues.
  2. B) funded by the federal government.
  3. C) paid for by a tax on employers.
  4. D) funded by health insurance companies.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

50) To be eligible for unemployment insurance, employees must meet all of the following requirements EXCEPT:

  1. A) be actively seeking employment.
  2. B) have left their job involuntarily.
  3. C) have worked a minimum of four out of the last five quarter-year periods.
  4. D) have filed a workers' compensation claim within the last twelve months.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

51) Former employees may be denied unemployment insurance benefits if they:

  1. A) worked for a private firm with fewer than 15 employees.
  2. B) were government employees.
  3. C) were fired by their employer.
  4. D) failed a drug test.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

52) Dick has recently been laid off from his unionized manufacturing job where he has been a full-time worker for the last 14 years. He has been looking for work for nearly five months. Which of the following is most likely true in Dick's case?

  1. A) Dick is not eligible for unemployment insurance.
  2. B) Dick's unemployment insurance will run out at the end of the fifth month.
  3. C) Dick is probably receiving 60% of the earnings he received from his job.
  4. D) Since Dick's company was unionized, he may be eligible for supplemental unemployment benefits.

Answer:  D

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

53) HR can have an important part in lowering unemployment insurance costs for a company by:

  1. A) making it harder to fire employees.
  2. B) conducting exit interviews with discharged workers.
  3. C) offering employees a flexible benefits plan.
  4. D) setting up health insurance accounts for employees.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

54) The Family and Medical Leave Act requires most employers to:

  1. A) provide parents with up to 6 weeks paid leave for the birth of a child.
  2. B) permit unpaid leave up to 12 weeks for certain family medical issues.
  3. C) provide health insurance for all married couples.
  4. D) provide health insurance for all employees.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

55) The Family and Medical Leave Act does NOT apply to employees who have:

  1. A) previously adopted children.
  2. B) been with an employer less than one year.
  3. C) reached retirement age.
  4. D) previously taken FMLA leave.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

56) The Family and Medical Leave Act only affects employers that:

  1. A) offer health benefits.
  2. B) are publicly held.
  3. C) are federal contractors.
  4. D) have 50 or more employees.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

57) Denielle has recently taken FMLA leave from Vanderbilt, Inc. to take care of her ailing child. When she returns to her job, what responsibilities will the company have toward Denielle?

  1. A) Vanderbilt must take the duration of Denielle's FMLA leave into account when determining length of service schedules for promotion purposes.
  2. B) Denielle will not be entitled to any cost-of-living pay increases for the time she spends on FMLA leave.
  3. C) Denielle is entitled to a job equivalent to her previous job when she returns from FMLA leave.
  4. D) Vanderbilt must hold Denielle's position so that she will be able to fill it when she returns from her FMLA leave.

Answer:  C

Diff: 3

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

58) When an employee applies for family or medical leave, an employer:

  1. A) may deny it to employees with less than one year of service.
  2. B) does not have to guarantee the employee the same/similar job upon returning to work.
  3. C) does not have to maintain health insurance coverage for the employee.
  4. D) cannot hire replacement workers while the employee is on leave.

Answer:  A

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

59) According to surveys, which of the following is true about FMLA?

  1. A) Leave causes significant staffing problems for small employers.
  2. B) Leave is primarily taken to care for sick family members.
  3. C) Nearly 50% of eligible workers take leave each year.
  4. D) Leave is primarily taken for overseas adoptions.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

Additional Case 12.2

Tri-State Shipping employs 45 workers. They ship commodities across the country. Until recently, they had only legally required benefits, but business has become very profitable and they can now offer their employees more benefits.

 

The average age of their employees is 50. Most employees have been there for more than 20 years, and the company prides itself on keeping workers. The majority of the jobs require heavy lifting or the operation of heavy equipment for loading and unloading trucks, trains, etc. Their workers' compensation tax has been running about 5% per year. They are in one of the lowest workers' compensation tax rate states, but TSS has had a lot of injuries. The lifting required and type of equipment used tends to result in a lot of sprained backs, mashed fingers, or bruised muscles. When workers are injured, they tend to heal quickly and return to work quickly.

 

Despite its reputation for keeping workers, the dock supervisor recently fired a 21-year old employee who had been with TSS for 12 months. Even though everyone liked him, the young man just couldn't learn his job.

 

60) Refer to Additional Case 12.2. Tri-State Shipping's workers' compensation tax rate is:

  1. A) average for U.S. companies.
  2. B) five times the U.S. average.
  3. C) half of the U.S. average.
  4. D) twice the U.S. average.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

61) Refer to Additional Case 12.2. Tri-State Shipping's workers' compensation tax rate is probably mostly influenced by their:

  1. A) experience rating.
  2. B) workers' average age.
  3. C) health insurance benefits.
  4. D) probability of injury.

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

62) Refer to Additional Case 12.2. Which of the following would be the best way to lower the firm's workers' compensation costs?

  1. A) Auditing all employee claims
  2. B) Mandating employee drug tests
  3. C) Placing injured workers on modified duty
  4. D) Emphasizing safe working procedures

Answer:  D

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.3: Know the legally required benefits

 

63) Refer to Additional Case 12.2. The young man who was fired is most likely:

  1. A) eligible for workers' compensation.
  2. B) not eligible for unemployment insurance benefits.
  3. C) not covered by ERISA because of his age.
  4. D) eligible for unemployment insurance benefits.

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.3: Know the legally required benefits

 

64) To be eligible for Social Security, a person must have worked 40 quarter-year periods (10 years total employment) and must have earned a minimum of $1,120 per quarter.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

65) Employees receive full Social Security benefits at the age of 62.

Answer:  FALSE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

66) Cheyanne is a recent widow. She is the mother of a 19-year-old daughter and the care-provider of her mother-in-law who is 60 years old. Cheyanne is eligible for survivor benefits.

Answer:  FALSE

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

67) Workers' compensation covers medical care and rehabilitation costs but not income replacement, since that falls under Social Security benefits.

Answer:  FALSE

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

68) The rates that employers pay for workers' compensation are based on: the severity of injuries sustained by the company's workforce, the risk of injury to employees, and the benefit level provided for specific injuries.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

69) Unemployment insurance is administered under the Social Security Act of 1935.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

70) Employees who retire are not qualified for unemployment insurance benefits.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

 

71) The Family and Medical Leave Act requires employers to give employees up to 12 weeks paid leave for the birth/adoption of a child, to care for a sick family member, or for serious personal health reasons.

Answer:  FALSE

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

72) The Family and Medical Leave Act applies to businesses that have 25 or more employees.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

73) A program established by the Social Security Act of 1935 to provide temporary income for people during periods of involuntary unemployment is referred to as ________.

Answer:  unemployment insurance

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

74) ________ are benefits given by a company to laid-off employees over and above state unemployment benefits.

Answer:  Supplemental unemployment benefits (SUB)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

75) A federal law that requires employers to provide up to 12 weeks' unpaid leave to eligible employees for the birth or adoption of a child; to care for a sick parent, child, or spouse; or to take care of health problems that interfere with job performance is called ________.

Answer:  Family and Medical Leave Act of 1993 (FMLA)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.3: Know the legally required benefits

 

76) What benefits are employers legally required to provide? What are some HR practices that can help employers contain the costs of these required benefits?

Answer:  Summary of suggested answer -

  • Social Security - Social Security provides retirement benefits, disability income, health care for the retired and disabled. It includes Medicare and survivors' benefits as well.
  • Unemployment insurance - Unemployment insurance provides continuing income for laid-off or fired employees. It seldom covers more than 50% of wages for a maximum of 26 weeks.
  • Workers' compensation - Workers' compensation provides for medical expenses, rehabilitation expenses, and income for workers injured on the job.
  • Unpaid leave - Unpaid leave exists largely under the Family and Medical Leave Act, employers may be required to provide unpaid time off for up to 12 weeks.

 

HR can help reduce workers' compensation costs by stressing safety, auditing claims, and designing jobs to reduce risk. Unemployment insurance costs can be contained by auditing claims and appealing when appropriate. Conducting exit interviews of discharged employees can also be beneficial.

Diff: 3

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.3: Know the legally required benefits

 

77) ________ of large and medium-sized private businesses in the United States offer health insurance to their employees, and ________ of small firms offer health insurance.

  1. A) 84% / 50%
  2. B) 64% / 76%
  3. C) 85% / 57%
  4. D) 55% / 40%

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

78) Mark lost his job at a large manufacturing company during downsizing. Which of the following ensures that Mark may continue his health insurance coverage?

  1. A) Consolidated Omnibus Budget Reconciliation Act
  2. B) Social Security Act
  3. C) Family and Medical Leave Act
  4. D) Workers' Compensation Act

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.4: Have familiarity with the voluntary benefits

 

79) The Consolidated Omnibus Budget Reconciliation Act does which of the following?

  1. A) Prevents employees from taking benefits from one company to another when they change jobs
  2. B) Allows employees to continue health insurance coverage after their employment has ended
  3. C) Requires employers to contain health-care costs through regular auditing practices
  4. D) Provides comprehensive medical services for employees through Medicare

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

80) Which country had the highest health-care costs per capita as of 2008?

  1. A) Canada
  2. B) Germany
  3. C) Great Britain
  4. D) United States

Answer:  D

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

81) Once an employee leaves an employer, that employee:

  1. A) loses all health insurance coverage.
  2. B) is immediately eligible for health insurance under Social Security.
  3. C) may pay for and keep their health insurance for 18-36 months.
  4. D) gains coverage under COBRA or ERISA, depending on their age.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

82) 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?

  1. A) PACA
  2. B) HIPAA
  3. C) COBRA
  4. D) ERISA

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

83) 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?

  1. A) HMO
  2. B) PPO
  3. C) Traditional insurance plan
  4. D) Flexible spending account

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.4: Have familiarity with the voluntary benefits

 

84) An HMO-based health plan:

  1. A) provides comprehensive coverage for a flat annual fee.
  2. B) provides maximum flexibility to the employee.
  3. C) covers 80% of doctor and 100% of hospital bills.
  4. D) does not cover preventive care services.

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) Traditional health insurance
  2. B) Preferred provider organization
  3. C) Patient's Bill of Rights
  4. D) Health maintenance organization

Answer:  D

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

86) 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.

  1. A) HMO
  2. B) PPO
  3. C) HSA
  4. D) HDHP

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.4: Have familiarity with the voluntary benefits

87) All of the following are characteristics of PPOs EXCEPT:

  1. A) flexibility.
  2. B) managed health care.
  3. C) limited physician choice.
  4. D) fixed fee medical services.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

88) Which of the following is most likely a true statement?

  1. A) Federal law mandates that firms provide domestic partner coverage.
  2. B) Insurance companies require documentation for domestic partner coverage.
  3. C) Most homosexual workers enroll their domestic partners for health care benefits.
  4. D) Health-care costs for unmarried couples are usually lower than those for married couples.

Answer:  D

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

89) Which of the following is a true statement about HSAs?

  1. A) Earnings and qualified withdrawals from HSAs are not taxed.
  2. B) Unspent money from an HSA cannot be rolled into the next year.
  3. C) HSAs offer low deductibles for people who rarely need health care.
  4. D) Premiums on HSAs are higher than other health insurance policies.

Answer:  A

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) shifting their companies into traditional insurance programs.
  2. B) forming a self-funding arrangement for health insurance.
  3. C) requiring that employees use only HMO plans.
  4. D) offering low deductible health plans.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) 50%
  2. B) 35%
  3. C) 25%
  4. D) 15%

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) Two - Social Security benefits and retirement benefits
  2. B) Two - Social Security benefits and personal savings
  3. C) Three - Social Security benefits, personal savings, and retirement benefits
  4. D) Four - Social Security benefits, personal savings, retirement benefits, and inheritance benefits

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

93) A qualified retirement plan:

  1. A) requires employees to pay taxes on current income, but not retirement distributions.
  2. B) prohibits employees from paying tax on contributions to the plan.
  3. C) favors highly compensated employees over lower-paid workers.
  4. D) prevents employers from taking a tax deduction.

Answer:  B

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

94) Employee retirement benefits are governed by:

  1. A) COBRA.
  2. B) the Social Security Act.
  3. C) ERISA.
  4. D) the Equal Pay Act.

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) Pension
  2. B) Vesting
  3. C) Portable benefits
  4. D) Flexible spending

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

96) 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:

  1. A) be lost upon your voluntary separation from Steel Workings.
  2. B) be decreased by half upon your voluntary separation from Steel Workings.
  3. C) stay with you when you move from Steel Workings.
  4. D) not be contributed to by your new employer.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.4: Have familiarity with the voluntary benefits

 

97) 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.

  1. A) 401(k)
  2. B) portable benefit
  3. C) IRA
  4. D) defined benefit

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

98) 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.

  1. A) pension
  2. B) defined contribution
  3. C) portable benefit
  4. D) defined benefit

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

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

  1. A) employees without company pension plans.
  2. B) employees of small businesses.
  3. C) self-employed workers.
  4. D) small business owners.

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

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

  1. A) 15% of salary up to $17,500
  2. B) 25% of gross income up to $49,000
  3. C) 50% of gross income up to $22,300
  4. D) 100% of salary up to $5,000

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

101) Roth IRAs differ from traditional IRAs in what way?

  1. A) An employee is allowed to contribute more annually to a traditional IRA than to a Roth IRA.
  2. B) An employee is allowed to contribute more annually to a Roth IRA than to a traditional IRA.
  3. C) Traditional IRAs are restricted to people with adjusted gross incomes of less that $120,000 as a single person or $177,000 for married people filing joint returns. Roth IRAs are not restricted in this way.
  4. D) Roth IRAs are restricted to people with adjusted gross incomes of less than $120,000 as a single person or $177,000 for married people filing joint returns. Traditional IRAs are not restricted in this way.

Answer:  D

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

102) A retirement plan that allows a self-employed person, or people working for a small business, to make larger tax-deductible contributions to a retirement account is called:

  1. A) a 401(k) plan.
  2. B) an individual retirement account.
  3. C) a simplified employee pension plan.
  4. D) a profit-sharing Keogh plan.

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

103) A(n) ________ allows employers to contribute to the employee's retirement plan on the basis of company performance.

  1. A) individual retirement account
  2. B) simplified employee pension plan
  3. C) profit-sharing Keogh plan
  4. D) defined contribution plan

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

104) Which of the following is a characteristic of most cash balance plans?

  1. A) Cannot be converted from traditional pension plans
  2. B) Ineffective at retaining younger employees
  3. C) Higher retirement income than traditional pension plans
  4. D) Time-consuming recordkeeping required

Answer:  D

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

105) Long-term disability insurance:

  1. A) takes effect after unemployment insurance runs out.
  2. B) begins after a disability of six months.
  3. C) replaces 100% of an employee's income for up to six months.
  4. D) supplements unemployment insurance payments.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

106) U.S. employers offer an average of ________ sick leave days a year for full-time employees.

  1. A) 5
  2. B) 10
  3. C) 15
  4. D) 20

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

107) Which of the following countries offers employees the most vacation days after one year of service?

  1. A) Spain
  2. B) France
  3. C) United States
  4. D) United Kingdom

Answer:  B

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

108) Which of the following would most likely receive severance pay?

  1. A) Barry, who was fired for theft
  2. B) Carrie, who took maternity leave
  3. C) David, who injured his back at work
  4. D) Ellen, who lost her job during downsizing

Answer:  D

Diff: 2

AACSB:  Analytical thinking

Skill:  Application

LO:  12.4: Have familiarity with the voluntary benefits

 

109) Childcare, health club memberships, and company credit unions are examples of:

  1. A) employee services benefits.
  2. B) benefits offered under the FMLA.
  3. C) benefits offered under ERISA.
  4. D) time off benefits.

Answer:  A

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

110) Which of the following is the most popular employee service?

  1. A) On-site health services
  2. B) Education subsidies
  3. C) Emergency loans
  4. D) Childcare

Answer:  D

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

111) About ________ of all employers offer some childcare benefits.

  1. A) 7%
  2. B) 10%
  3. C) 15%
  4. D) 20%

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

Additional Case 12.1

The HR Director of The Camera Center is leading the executive team through a review of the company's benefits plan. He begins by explaining how the firm funds the benefits plan. After a few questions on that matter, he moves on to clarify what they must offer by law and what benefits the firm would like to provide.

 

A highly entrepreneurial, performance-driven company, The Camera Center provides an excellent profit-sharing plan and one of the best retirement packages in the industry. The firm commits a high portion of compensation funds to the benefits plan. The workforce tends to be college-educated, young professionals who are just starting their families.

 

The CEO wants the total benefits plan reviewed and repackaged, if necessary, to align it with The Camera Center's business culture and strategy. He also wants to contain costs as much as possible and simplify benefits

administration.

 

112) Refer to Additional Case 12.1. Which of the following changes would most likely support the firm's strategies and culture?

  1. A) Offering sabbatical leave to new employees
  2. B) Making contributions to employee SEPs
  3. C) Subsidizing employee child-care costs
  4. D) Implementing a flexible benefits program

Answer:  C

Diff: 2

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.4: Have familiarity with the voluntary benefits

 

113) Refer to Additional Case 12.1. The HR Director suggests establishing a wellness pay incentive program at The Camera Center. Which of the following, if true, best supports this idea?

  1. A) Employees frequently use sick days to handle personal business.
  2. B) Many employees at the firm are nearing retirement age.
  3. C) The firm needs additional tax advantages to offset benefits costs.
  4. D) Cost containment at the firm is a significant issue.

Answer:  A

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.4: Have familiarity with the voluntary benefits

 

Additional Case 12.2

Tri-State Shipping employs 45 workers. They ship commodities across the country. Until recently, they had only legally required benefits, but business has become very profitable and they can now offer their employees more benefits.

 

The average age of their employees is 50. Most employees have been there for more than 20 years, and the company prides itself on keeping workers. The majority of the jobs require heavy lifting or the operation of heavy equipment for loading and unloading trucks, trains, etc. Their workers' compensation tax has been running about 5% per year. They are in one of the lowest workers' compensation tax rate states, but TSS has had a lot of injuries. The lifting required and type of equipment used tends to result in a lot of sprained backs, mashed fingers, or bruised muscles. When workers are injured, they tend to heal quickly and return to work quickly.

 

Despite its reputation for keeping workers, the dock supervisor recently fired a 21-year old employee who had been with TSS for 12 months. Even though everyone liked him, the young man just couldn't learn his job.

 

114) Refer to Additional Case 12.2. Given Tri-State Shipping's workforce and the company's culture, which of the following benefits would most likely support its culture?

  1. A) Sabbatical leave
  2. B) Health savings accounts
  3. C) Severance pay
  4. D) Preretirement counseling

Answer:  D

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.4: Have familiarity with the voluntary benefits

 

115) COBRA requires employers to permit departing employees to continue their health insurance for up to 3 years at the employees' expense.

Answer:  TRUE

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

116) Under HIPAA, an employee can transfer between health insurance plans without a gap in coverage due to a pre-existing condition.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

117) An HMO is a health-care plan that establishes a network of doctors who provide a broad range of services for a set fee, providing the advantages of managed care and the flexibility of traditional insurance.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

118) The expansion of health-care coverage to employees' non-married partners has become a common practice in the United States.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

119) High-deductible health plans lower employer health-care costs and employees' premiums.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

120) Social Security normally replaces about 80% of an individual's current earnings upon retirement.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

121) Vesting of a retirement plan means that the employee can take the retirement plan with them if they leave the employer.

Answer:  FALSE

Diff: 3

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

122) Defined benefits plans promise a fixed dollar amount to employees upon their retirement.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

123) A 401(k) is a tax-deferred individual contributor retirement plan.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

124) A profit-sharing Keogh plan allows employers to make contributions to a retirement plan based on company performance.

Answer:  TRUE

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

125) Typically, long-term disability compensation replaces about 40-50% of employees' income after they have been disabled for at least three months.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

126) The United States provides the fewest vacation days of any country in the world.

Answer:  FALSE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

127) Backup care is an employee benefit intended to meet the needs of employees who care for either elder family members or children.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

128) ________ is legislation that gives employees the right to continue their health insurance coverage for 18 to 36 months after their employment has terminated.

Answer:  Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

129) A federal law that protects an employee's ability to transfer between health insurance plans without a gap in coverage due to a preexisting condition is ________.

Answer:  Health Insurance Portability and Accountability Act (HIPAA)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

130) A(n) ________ is a health-care plan that provides comprehensive medical services for employees and their families at a flat annual fee.

Answer:  health maintenance organization (HMO)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

131) A(n) ________ is a health-care plan in which an employer or insurance company establishes a network of doctors and hospitals to provide a broad set of medical services for a flat fee per participant.

Answer:  preferred provider organization (PPO)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

132) The ________ is a federal law established in 1974 to protect employees' retirement benefits from mismanagement.

Answer:  Employee Retirement Income Security Act (ERISA)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

133) ________ is a guarantee that accrued retirement benefits will be given to retirement plan participants when they retire or leave the employer.

Answer:  Vesting

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

 

134) The government agency that provides plan termination insurance to employers with defined benefit retirement programs is referred to as the ________.

Answer:  Pension Benefit Guaranty Corporation (PBGC)

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

135) A(n) ________ is a retirement plan that promises to pay a fixed dollar amount of retirement income based on a formula that takes into account the average of the employee's last 3-5 years' earnings prior to retirement.

Answer:  defined benefits plan or pension

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

 

136) A(n) ________ is a retirement plan in which the employer promises to contribute a specific amount of funds into the plan for each participant.

Answer:  defined contribution plan

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.4: Have familiarity with the voluntary benefits

137) What is ERISA? What is the difference between a defined benefits plan and a defined contribution plan?

Answer:  The major law governing the administration of retirement benefits in the United States is the Employee Retirement Income Security Act (ERISA). Passed in 1974, ERISA protects employees' retirement benefits from mismanagement. The key provisions of ERISA cover who is eligible for retirement benefits, vesting, and funding requirements. Defined benefits plans are the original pension plans which guarantee a certain payment to the employee after a term of service based on the employees' last 3-5 years of service. The employer assumes all the risk. A defined contribution shifts the risk to the employee. A specific amount is contributed by the employer and employees may be able to make additional contributions. This can provide employees with far greater returns, or possibly wipe them out. Employees decide where to invest their funds.

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.4: Have familiarity with the voluntary benefits

 

 

138) What are the primary forms of paid time off available to most employees? How can a firm's HR department contain the costs associated with paid time off?

Answer:  Summary of suggested answer -

  • Sick leave - Employees receive full pay for every day that they experience short-term illness or disability that make them unable to perform their job. Many employers allow employees to accumulate their sick leave. Some companies allow retiring employees to collect pay for accumulated sick leave.
  • Vacations - Paid vacation can help relieve employee stress and let them recharge themselves psychologically and emotionally. Some companies allow retiring employees to collect pay for accumulated vacation time.
  • Severance pay - Severance pay is given to employees who have been laid off. It is provided to cushion the shock of termination and to finance the employee's search for a new position. The amount of severance pay varies widely among organizations.
  • Holidays - Many employers give their employees paid holidays or additional pay to employees who are required (or volunteer) to work on holidays.

 

HR can set up wellness pay incentive programs to monetarily reward workers who do not use any sick days. Flexible work hours help employees take off for personal business without using sick time. Paying employees for unused sick days or accrued vacation can help reduce absences.

Diff: 3

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.4: Have familiarity with the voluntary benefits

139) Companies use flexible benefits programs in order to:

  1. A) simplify benefits administration.
  2. B) give employees options to select the benefits most meaningful to them.
  3. C) motivate employees to higher productivity and quality by rewarding performance.
  4. D) give management options in selecting benefits to offer employees, which lowers the cost of the benefits program.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.5: Learn practices for administering benefits

 

140) Which term refers to individual employee accounts funded by the employer, the employee, or both based on rules specified in Section 125 of the Internal Revenue Code?

  1. A) Core-plus option plan
  2. B) Modular plan
  3. C) Flexible spending account
  4. D) Health savings account

Answer:  C

Diff: 1

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.5: Learn practices for administering benefits

 

141) A ________ provides employees with minimal economic security and the ability to "purchase" additional benefits of value to them.

  1. A) core-plus option plan
  2. B) modular plan
  3. C) flexible spending account
  4. D) health savings account

Answer:  A

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.5: Learn practices for administering benefits

 

142) As an HR manager, you would most likely face all of the following challenges when handling flexible benefits plans EXCEPT:

  1. A) intense use of a benefit by employees that increases costs.
  2. B) inadequate government guidelines and rules.
  3. C) significant complexity of administration.
  4. D) high potential for recordkeeping errors.

Answer:  B

Diff: 2

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.5: Learn practices for administering benefits

143) Which of the following is the LEAST innovative and effective method of employee benefits communication?

  1. A) On designated Web
  2. B) Through computer software
  3. C) During new employee orientation
  4. D) Through audio-visual presentations

Answer:  C

Diff: 2

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.5: Learn practices for administering benefits

 

144) A modular benefits plan allows employees to select different bundles of benefits or different levels of benefits.

Answer:  TRUE

Diff: 2

AACSB:  Analytical thinking

Skill:  Concept

LO:  12.5: Learn practices for administering benefits

 

 

145) What are the three areas that an employer needs to consider when establishing a benefits plan? How can HR use technology to ensure that employees clearly understand an employer's benefits plan?

Answer:  The first element of a benefits strategy is the benefits mix, which is built on the consideration of the company's compensation strategy, organizational objectives, and the characteristics of the workforce. The benefits amount refers to how much money is available for benefits. Third, the flexibility of the benefits refers to how much choice is given to employees. Traditionally, benefits have been communicated via a group meeting during new-employee orientation or a benefits handbook that describes each benefit and its level of coverage. In today's dynamic world of employee benefits, however, more sophisticated communication media is necessary, such as videotape presentations, computer software that generates personalized benefits status reports for each employee, and a benefits Web site.

Diff: 3

AACSB:  Analytical thinking

Skill:  Synthesis

LO:  12.5: Learn practices for administering benefits

 

146) Discuss the three forms of flexible benefits plans and the challenges involved in implementing any flexible benefits plan.

Answer:  Summary of suggested answer -

  • Flexible benefits plans allow employees varying degrees of choice as to what benefits they want. Modular plans provide choice among bundles of benefits or levels of benefits. Core-plus option plans consist of a core of essential benefits, and then an array of choices to add to the core. Flexible spending accounts fund employee benefits with pre-tax dollars. Employees choose and pay for their benefits out of this account. What is left over is theirs.
  • Challenges include adverse selection, poor choice, and administrative complexity. See Challenges with Flexible Benefits for further details.

Diff: 3

AACSB:  Reflective thinking

Skill:  Critical Thinking

LO:  12.5: Learn practices for administering benefits

 

 

 

 

 

 

 

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Human Resource Management
Human Resource Management, 15th Edition, 2017, Gary Dessler,
Strategic Compensation: A Human Resource Management Approach, 9th Edition, 2017, Joseph J. Martocchio
Fundamentals of Human Resource Management, 4th Edition, 2016, Gary Dessler
Human Resource Management, 14th Edition, 2016, R. Wayne Dean Mondy, Retired, Joseph J. Martocchio
Mastering Project Human Resource Management: Effectively Organize and Communicate with All Project Stakeholders, 2015, Harjit Singh
Managing Human Resources, 8th Edition, 2016, Luis R. Gomez-Mejia, David B. Balkin, Robert L. Cardy

-----

PART 1: Setting the Stage for Strategic Compensation
1. Strategic Compensation: A Component of Human Resource Systems
2. Contextual Influences on Compensation Practice
PART 2: Bases for Pay
3. Seniority Pay and Merit Pay
4. Incentive Pay
5. Person-Focused Pay
PART 3: Designing Compensation Systems
6. Building Internally Consistent Compensation Systems
7. Market-Competitive Compensation Systems
8. Building Pay Structures that Recognize Employee Contributions
PART 4: Employee Benefits
9. Discretionary Benefits
10. Legally-Required Benefits
PART 5: Contemporary Strategic Compensation Challenges
11. Compensating Executives
12. Compensating the Flexible Workforce
PART 6: Compensation Around the World
13. Compensating Expatriates
14. Pay and Benefits outside the United States
Epilogue
15. Challenges Facing Compensation Professionals
------
Managing Human Resources Today
Managing Equal Opportunity and Diversity
Human Resource Strategy and Analysis
STAFFING: WORKFORCE PLANNING AND ENFORCEMENT
Job Analysis and Talent Management
Personnel Planning and Recruiting
Selecting Employees
TRAINING AND HUMAN RESOURCE DEVELOPMENT
Training and Developing Employees
Performance Management and Appraisal
Managing Careers
COMPENSATION AND TOTAL REWARDS
Developing Compensation Plans
Pay for Performance and Employee Benefits
EMPLOYEE AND LABOR RELATIONS
Maintaining Positive Employee Relations
Labor Relations and Collective Bargaining
Improving Occupational Safety, Health, and Risk Management
SPECIAL ISSUES IN HUMAN RESOURCE MANAGEMENT
Managing HR Globally
Managing Human Resources in Small and Entrepreneurial Firms
PHR and SPHR Knowledge Base
Comprehensive Cases
------
Human Resource Management: An Overview
Business Ethics and Corporate Social Responsibility
Equal Employment Opportunity, Affirmative Action, and Workforce Diversity
Staffing
Strategic Planning, Human Resource Planning, and Job Analysis
Recruitment
Selection
Performance Management and Training
Performance Management and Appraisal
Training and Development
Compensation
Direct Financial Compensation (Core Compensation)
Indirect Financial Compensation (Employee Benefits)
Labor Relations, Employee Relations, Safety, and Health
Labor Unions and Collective Bargaining
Internal Employee Relations
Employee Safety, Health, and Wellness
Operating in a Global Environment
Global Human Resource Management
------
Lectures, Test Bank, Case Study, Video Guides
Equal Opportunity,
Recruitment, Placement, Talent Management,
Job Analysis, Talent Management Process,
Personnel Planning, Recruiting,
Employee Testing, Selection,
Training, Development,
Developing Employees,
Performance Management, Appraisal,
Managing Careers, Retention,
Compensation,
Establishing Strategic Pay Plans,
Pay for Performance, Financial Incentives,
Benefits, Services,
Labor Relations,
Safety,
Health,
Human Resource Management Lectures

 

----

 

HRM Human Resource Management - New Collection 2017

1. Youtube Playlist: See the collection of HRM Videos - link

2. Download the Selected HRM Human Resource Management E-books for Free

3. HRM Human Resource Management PPT slides - Free Download

Human Resource Management, 15th Edition, 2017, Gary Dessler - LINK Free PPT Download

Strategic Compensation: A Human Resource Management Approach, 9th Edition, 2017, Joseph J. Martocchio - LINK 

Fundamentals of Human Resource Management, 4th Edition, 2016, Gary Dessler - Link Free PPT Download

Managing Human Resources, 8th Edition, 2016, Luis R. Gomez-Mejia, David B. Balkin - Link Free PPT download

4. HRM Cases and Answers  - buy

5. Instructor Manualbuy

6. Test Bank  - Free Download

Managing Human Resources, 8e (Gomez-Mejia et al.) - link free download

Strategic Compensation: A Human Resource Management Approach, 9th Edition, 2017, Martocchio   - link free download

Human Resource Management, 15th Edition, 2017, Gary Dessler   - Link free Download

 

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