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Exam 14: Providing Employee Benefits

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Question 51

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Frankie is deciding between two jobs that provide equal pay. He compares the health care benefits provided by both jobs to help him make a decision. One job offers a flexible spending account, while the other job offers him managed care. Which statement will help Frankie make a decision?

A) With managed care, the insurer makes all decisions about health care so Frankie has no control.
B) Money in flexible spending accounts is not taxed, so employees get more take-home pay.
C) The money in the flexible spending accounts must meet IRS requirements.
D) At the end of each year, money remaining in a flexible spending account reverts to the employer.
E) Contributions to a flexible spending account may not exceed $5,000 per year.

F) A) and E)
G) B) and C)

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Question 52

Multiple Choice

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Yang, the HR manager at a start-up company, helped the founder plan a benefits package that includes paid vacations, holidays, and sick leave. Now an employee approaches Yang to say she has been called up for jury duty and needs to be away next week. What should Yang do?

A) He should direct the employee to use the Family and Medical Leave Act.
B) He should forbid the employee from taking time off for jury duty.
C) He should ask the employee to use her sick leave for jury duty.
D) He should ask the employee to use her vacation time for jury duty.
E) He should establish, and then apply, policies for other situations requiring time off.

F) None of the above
G) A) and B)

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Question 53

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Which federal law increased the responsibility of pension plan trustees to protect retirees?

Michael is the CEO of a company that is expanding overseas. He considers introducing a cafeteria-style benefits plan to cater to the company's diverse workforce. However, the HR team brings up the concern of higher expenses involved in this type of benefits. What is Michael likely to do to lower costs at the initial stage?

Eleanor, who is pregnant, works for an organization with more than 100 employees. She lives 20 miles away from work. By federal law, she is entitled to ________ of unpaid leave after her child is born.

Toby is an engineer at a paint manufacturing company. However, a chemical spill at the factory caused an accident that left him permanently disabled. Which program is specifically designed to help employees like Toby?

For an average employee, the most common type of insurance offered as benefits is the pension program.

Courtney's employer provides her with an insurance plan that requires her to obtain approval before being admitted to the hospital for surgical procedures. Which variation of health coverage does this illustrate?

To increase the likelihood of employees understanding messages about benefits, employers must limit communications.

A ________ pension plan allows pension benefits for key employees, such as highly paid managers, to exceed a government-specified share of total pension benefits.

How are cash balance plans different from defined-benefit and defined-contribution plans?

________ strictly limits the definition of "independent contractors," so that employers cannot avoid legal obligations by classifying workers as self-employed when the organization receives the benefits of a permanent employee.

All U.S. employees, including federal, state, and local government employees, are covered under the Old Age, Survivors, Disability, and Health Insurance (OASDHI) program.

What are flexible benefit plans? Explain their advantages and disadvantages.

According to Employee Retirement Income Security Act (ERISA), employees whose contributions are vested meet the requirements to receive a pension at retirement age.

What is a requirement set for employers under the Financial Accounting Standards Board standards?

A logical place to begin selecting employee benefits is to establish ________ for the benefits package.

Benefit plans that permit employees to choose the types and amounts of benefits they want from a set of alternatives are called

Riley works at Kupton Co., which provides her with a health care plan that contracts with health care professionals to provide services at a reduced fee. Which type of health care plan is Kupton Co. providing to its employees?

Employees and job applicants often have a poor idea of what benefits they have and what the market value of their benefits is.