Compensation & Benefits (12)

Front 1

The total cost of employee benefits in the U.S. is _____ dollars.

Back 1

four trillion

Front 2

In 1959, benefits were approximately _____ percent of payroll and in 2010, the percent was ____.

Back 2

25; 30

Front 3

All of the following factors are reasons for the growth of benefits except:

Back 3

foreign competition.

Front 4

Which of the following benefits are not mandated by state or federal legislation?

Back 4

Pensions

Front 5

The typical employee can recall _____ percent of the benefits they receive.

Back 5

less than 15

Front 6

Advantages of employer sponsored life and health insurance include all of the following except:

Back 6

employees can choose coverage levels.

Front 7

Surveys show that the most highly valued benefit is:

Back 7

medical insurance.

Front 8

Across five studies ranking preference for benefits, __________ had the lowest average rating.

Back 8

Long-term disability

Front 9

A study of the factors affecting MBA students' job choice showed _____ was ranked as least important.

Back 9

employee benefits

Front 10

Which of the following is not a major benefits planning and design issue?

Back 10

Diversity compliance

Front 11

A recent survey shows that the majority of employers are responding to increased benefit costs by _______.

Back 11

requiring employees to pay higher deductibles and copays

Front 12

The first issue in setting up a benefits package is:

Back 12

who should be protected or benefited.

Front 13

Which of the following is not a benefit administration issue?

Back 13

Benefit adequacy

Front 14

In the _____ benefit package, a package is designed with the average employee in mind.

Back 14

standard

Front 15

A type of benefit plan that allocates a set dollar amount to employees and allows them to select benefits is called _____ plan.

Back 15

flexible benefit

Front 16

_____ is/are the primary reason why businesses adopt flexible benefit programs.

Back 16

Cost savings

Front 17

A major approach to increasing employee awareness of health care choices and cost is:

Back 17

cafeteria plans.

Front 18

Which of the following is not a disadvantage of flexible benefit programs?

Back 18

New benefits are more difficult to introduce.

Front 19

All of the following are advantages of flexible benefits except:

Back 19

administrative expenses increase.

Front 20

Tiered networks, managed competition and health savings accounts are all examples of choices for _____________

Back 20

customer-driven health care.

Front 21

_____ is not an example of an approach to customer-driven health care.

Back 21

Cafeteria plans

Front 22

A _____ is an employer-provided subsidized basic medical plan with buy-up options.

Back 22

managed competition

Front 23

A customer-driven health care plan that offers employees a choice of medical plans that include systems of varying cost is the:

Back 23

tiered networks.

Front 24

Alternatives to financing benefit plans include all of the following except:

Back 24

401K.

Front 25

Employers prefer contributory benefits financing for all except which of the following?

Back 25

more favorable tax treatment.

Front 26

All of the following except _____ are factors affecting employer choices of components of a benefits package.

Back 26

equity

Front 27

The best way for companies to decide whether or not the company can afford a benefit is on a _____ basis.

Back 27

cost-centered

Front 28

Which of the following is not a part of the cost-centered approach for deciding to provide a benefit?

Back 28

Basing benefits on historical costs

Front 29

The most widely used benefit survey is conducted by:

Back 29

the U. S. Chamber of Commerce.

Front 30

Various studies have found that only two specific benefits curtailed employee turnover: _____ and ____.

Back 30

pensions; medical coverage

Front 31

A recent survey shows employees ranking employee benefits __________ in explaining job satisfaction.

Back 31

second

Front 32

Which of the following benefits has been found to increase productivity in organizations?

Back 32

No benefit has been found to increase productivity.

Front 33

_____ mandates 12 weeks of leave for all workers at companies that employ 50 or more people.

Back 33

FMLA 1993

Front 34

_____ allows employees who have resigned or were laid off to continue to purchase health insurance under their employer's plan.

Back 34

COBRA 1984

Front 35

The __________ act requires individuals to maintain minimal essential health insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship.

Back 35

Patient Protection and Affordable Care Act

Front 36

_____ is/are one of the most preferred benefits.

Back 36

Stock plans

Front 37

_____ is/are not a method of determining employee benefit preferences.

Back 37

Competitor pay surveys

Front 38

_____ is the most frequent method of benefit communication.

Back 38

An employee benefit handbook

Front 39

A primary benefits objective of most employers is to:

Back 39

increase employee understanding of plan objectives.

Front 40

All of the following are advantages of managing benefits via the internet or intranet except:

Back 40

employees have fewer interactions with HR staff.

Front 41

All of the following are cost containment practices except:

Back 41

physical exams of all new hires.

Front 42

The biggest trend in cost-containment is:

Back 42

outsourcing.

Front 43

Which of the following would an employer be least likely to use if they sought to reduce benefit costs?

Back 43

Defined benefit plans

Front 44

There is good evidence that a sound benefits program reduces turnover.

Back 44

False

Front 45

The average per hour cost of benefits is higher in state and local governments than in the private sector.

Back 45

True

Front 46

Before World War II, hourly employees were given time off for holidays but without pay

Back 46

True

Front 47

Today, benefits are twenty-five percent of payroll costs.

Back 47

False

Front 48

General Motors spends more than twice as much for employee health insurance as for the steel that goes into each car they produce.

Back 48

True

Front 49

While health care costs have risen rapidly during the past two decades, pension costs have been declining due to the strong stock market.

Back 49

False

Front 50

Employee benefits may be accurately described as a costly entitlement of the American workforce.

Back 50

True

Front 51

Though employer provided benefits cost less due to group rates, they are taxed the same as wages and salaries.

Back 51

False

Front 52

The favorable tax status granted to many benefits is safe from the threat of recurrent tax reform proposals.

Back 52

False

Front 53

According to a recent SHRM survey, pay is the top factor driving job satisfaction.

Back 53

False

Front 54

A job ad stating generous benefits leads applicants to place higher value on benefits in choosing among jobs.

Back 54

True

Front 55

Benefits can be an effective tool to attract and retain employees when benefits address needs of a target group.

Back 55

True

Front 56

The biggest recent trend in health care is consumer-driven health care.

Back 56

True

Front 57

Cost pressure related to increasing diversity of the workforce is one of the reasons companies are offering flexible benefit plans.

Back 57

True

Front 58

The biggest current trend in health care is market-based or customer-driven.

Back 58

True

Front 59

Flexible benefit plans are complex requiring many choices that lead to poor employee understanding of benefits.

Back 59

False

Front 60

Flexible benefits allow organizations to control benefit costs.

Back 60

True

Front 61

If adverse selection occurs for one or more benefits in a flexible benefits plan, the higher cost will likely lead to those benefits being dropped from the plan.

Back 61

True

Front 62

Employers prefer the noncontributory approach to financing benefits because this allows greater control of costs.

Back 62

False

Front 63

For most benefits, providing a level of coverage is more costly to employers than providing a benefit at a specific cost level.

Back 63

True

Front 64

A major reason for the proliferating cost of benefit programs is the narrow focus of benefit administrators.

Back 64

True

Front 65

When future cost containment of a benefit may be a problem, the benefit should be offered on a noncontributory basis.

Back 65

False

Front 66

Most employers prefer to avoid providing benefits on a defined-level basis.

Back 66

True

Front 67

Though commonly believed by managers, there is only anecdotal evidence supporting the belief that higher benefit levels increase employee retention.

Back 67

True

Front 68

The only two benefits shown to reduce turnover are pensions and medical coverage.

Back 68

True

Front 69

The goal of employee benefits should be to keep turnover to near zero.

Back 69

False

Front 70

Most employers are pleased that 3 Americans in 10 stayed in a job they wanted to leave simply because they could not give up their health-care coverage.

Back 70

False

Front 71

One study suggests that benefits focusing on work/life balance lead to greater worker involvement in productivity initiatives.

Back 71

True

Front 72

The Employment Retirement Income Security Act (1974) requires employers to offer some form of pension.

Back 72

False

Front 73

According to available evidence, a good strategy for a company to remain non-union is to offer the same benefits as those provided by unionized firms.

Back 73

False

Front 74

The "bandwagon" effect is when an employer offers a new benefit offered by a competitor without careful consideration.

Back 74

True

Front 75

Employees' preferences for various benefits can be predicted well from demographic data.

Back 75

False

Front 76

The ideal approach to determining employee benefit preferences is a flexible benefit plan.

Back 76

True

Front 77

Employees feel their benefits are very fair when they are given extensive communications about benefits but plan design is left to experts.

Back 77

False

Front 78

Dual coverage is when a portion of insurance premiums is paid by the employee.

Back 78

False

Front 79

What is the role of the government impetus in the development of employee benefits?

Back 79

Three employee benefits are mandated by either the state or federal government: workers' compensation (state), unemployment insurance (federal), and social security (federal). In addition, most other employee benefits are affected by such laws as the Employee Retirement Income Security Act (ERISA affects pension administration) and various sections of the Internal Revenue Code.

Front 80

Which are the four major administration issues regarding in setting up a benefit package?

Back 80

Four major administration issues arise in setting up a benefit package: (1) Who should be protected or benefited?; (2) How much choice should employees have among an array of benefits?; (3) How should benefits be financed?; and (4) Are your benefits legally defensible?

Front 81

What are the major disadvantages of a flexible benefits package?

Back 81

The major disadvantages of a flexible benefits package are:

• Employees make bad choices and find themselves not covered for predictable emergencies.

• Administrative burdens and expenses increase.

• Adverse selection: Employees pick only benefits they will use; the subsequent high benefit utilization increases its cost.

• Subject to nondiscrimination requirements in Section 125 of the Internal Revenue Code.

Front 82

List some examples of customer-driven healthcare benefits packages.

Back 82

There are many variants on consumer-driven health care. Some of the basic choices are:

• Full-defined Contribution

• Tiered Networks

• Menu-driven

• Managed Competition

• Health Savings Accounts

Front 83

What can administrators do to control the increasing benefits costs?

Back 83

To control spiraling benefit costs, administrators should adopt a broader, cost-centered approach. As a first step, this approach would require policy decisions on the level of benefit expenditures acceptable both in the short and the long runs. Factors affecting this decision include an evaluation of benefits offered by other firms and the competitiveness of the existing package. Also important is compliance with various legal requirements as they change over time. Finally, the actual benefit of a new option must be explored in relation to employee preferences.

Front 84

What is the importance of the demographic approach in determining employee preferences?

Back 84

The demographic approach assumes that demographic groups (e.g., young versus old, married versus unmarried) can be identified for which benefit preferences are fairly consistent across members of the group. Furthermore, it assumes that meaningful differences exist between groups in terms of benefit preferences. It has to be noted that evidence says that these assumptions are only partially correct.

Front 85

What is the "bandwagon" effect in benefits administration?

Back 85

An issue while determining benefits is the perceived fairness in comparison to other organizations. Occasionally this comparison process leads to a "bandwagon" effect, in which new benefits offered by a competitor are adopted without careful consideration, simply because the employer wants to avoid hard feelings. This phenomenon is particularly apparent for employers with strong commitments to maintaining a totally or partially nonunion work force. While the effectiveness of this strategy in thwarting unionization efforts has not been demonstrated, many nonunion firms would prefer to provide the benefit as a safety measure.

Front 86

Which if the most popular empirical method of identifying individual preferences in benefits packages?

Back 86

The most popular method of identifying individual employee preferences is commonly known as a flexible benefit plan (also called a cafeteria-style plan or a supermarket plan). Employees are allotted a fixed amount of money and permitted to spend that amount in the purchase of benefit options. From a theoretical perspective, this approach to benefit packaging is ideal. Employees directly identify the benefits of greatest value to them, and by constraining the dollars employees have to spend, benefit managers are able to control benefit costs.

Front 87

Illustrate the issue of communication of benefits to the employees.

Back 87

The most frequent method for communicating employee benefits today is still the employee benefit handbook. To be most effective, the benefit manual should be accompanied by group meetings and videotapes. While some organizations may supplement this initial benefit discussion with periodic refreshers, a more typical approach involves one-on-one discussions between the benefit administrator and an employee seeking information on a particular benefit. In recent years, personalized benefit statements generated by computer software programs are also becoming popular.

Front 88

What are some of the common cost-containment practices with regard to benefits administration?

Back 88

Employers are auditing their benefit options for cost containment opportunities. The most prevalent practices include:

• Probationary periods—excluding new employees from benefit coverage until some term of employment (e.g., 3 months) is completed.

• Benefit limitations—limit disability income payments to some maximum percentage of income and to limit medical/dental coverage for specific procedures to a certain fixed amount.

• Copay—requiring that employees pay a fixed or percentage amount for coverage.

• Administrative cost containment—controlling costs through policies such as seeking competitive bids for program delivery.