12 Employment Considerations Flashcards
What is a cafeteria plan?
A type of employee benefit plan where employees choose their benefits from a menu of taxable and tax-reducing benefits.
What is a deductible?
An initial portion of any loss that must be paid before collecting insurance benefits.
Define employment benefits.
Forms of remuneration provided by employers to employees that result in the employee not having to pay out-of-pocket money for certain expenses.
What is a flexible spending account (FSA)?
An employer-sponsored account that allows employee-paid expenses for medical or dependent care to be paid with pretax dollars.
What are health care plans?
An employee benefit designed to pay all or part of the employee’s medical expenses.
What is a health savings account (HSA)?
A special savings account intended for people with a high-deductible health care plan where funds grow tax-free.
What characterizes a high-deductible health plan (HDHP)?
A plan that requires individuals to pay a higher deductible before insurance plan payments begin.
What are pretax dollars?
Monetary income that has not been taxed by the government.
What is a tax-sheltered retirement plan?
Employer-sponsored, defined-contribution retirement plans including 401(k) plans and similar 403(b) and 457 plans.
Fill in the blank: A _______ allows employees to choose their benefits from a menu.
[cafeteria plan]
True or False: A flexible spending account allows after-tax income to be used for medical expenses.
False
Fill in the blank: An initial portion of any loss that must be paid before collecting benefits is called a _______.
[deductible]
List three types of tax-sheltered retirement plans.
- 401(k) plans
- 403(b) plans
- 457 plans
