Chapter 10

Question 1

All financial rewards not

included in direct financial compensation

Answer 1

Indirect financial compensation (employee benefits)

Question 2

Provides workers whose jobs have been terminated through

no fault of their own monetary payments for up to 26 weeks or until they find a new job.

Answer 2

Unemployment insurance

Question 3

Provides workers whose jobs have been terminated
through no fault of their own, monetary payments for up to 26 weeks or until they find a
new job

Answer 3

Unemployment compensation

Question 4

Provides a degree of financial protection for employees who

incur expenses resulting from job-related accidents or illnesses.

Answer 4

Workers’ compensation

Question 5

Insurance protection for three types of medical expenses:

hospital expenses, surgical expenses, and physician’s charges

Answer 5

Fee-for-service plans

Question 6

Over a designated period, employees must pay for services before the
insurance plan begins to pay for services

Answer 6

Deductible

Question 7

The maximum amount an employee pays for health care during

a calendar or plan year

Answer 7

Out-of-pocket expenses

Question 8

The percentage of covered expenses paid by the insured. Most fee-for-
service plans stipulate 20 percent coinsurance. This means that the insured will pay 20
percent of covered expenses, whereas the insurance company pays the remaining 80
percent.

Answer 8

Coinsurance

Question 9

Health care delivery that emphasizes cost control by limiting the
employee’s choice of doctors and hospitals. These plans also provide protection against
health care expenses in the form of prepayment to health care providers

Answer 9

Managed care plans

Question 10

HMOs are sometimes described as providing prepaid medical
services because fixed periodic enrollment fees cover HMO members for all medically
necessary services only if the services are delivered or approved by the HMO.

Answer 10

Prepaid medical services

Question 11

Fixed amount paid for medical services and the amount varies by type of
service

Answer 11

Copayments

Question 12

Designated by HMOs to determine whether patients require the
care of a medical specialist. This functions to control costs by reducing the number of
medically unnecessary visits to expensive specialists.

Answer 12

Primary care physician

Question 13

Refers to the objective of helping companies maintain
control over costs while also enabling employees to make greater choices about health
care

Answer 13

Consumer-driven health care

Question 14

Plans that require substantially higher

deductibles compared to managed care plans and traditional fee-for-service plans.

Answer 14

High-deductible health insurance plans

Question 15

Tax-free health spending and savings accounts available
to individuals and families who have qualified high-deductible health insurance policies
as determined by IRS regulation

Answer 15

Health savings account (HSA)

Question 16

Benefit payments made because of unilateral management

decisions in nonunion firms and from labor/management negotiations in unionized firms.

Answer 16

Discretionary benefits

Question 17

Welfare and pension plans that meet various requirements set forth by
the Employee Retirement Income Security Act of 1974; these plans entitle employees and
employers to favorable tax treatment by deducting the contributions from taxable income.

Answer 17

Qualified plan

Question 18

Welfare and pension plans that do not meet various requirements set
forth by the Employee Retirement Income Security Act of 1974 (ERISA), disallowing
favorable tax treatment for employee and employer contributions

Answer 18

Nonqualified plan

Question 19

An employee’s nonforfeitable rights to retirement plan benefits.

Answer 19

Vesting

Question 20

Employers must grant employees 100 percent vesting after no

more than three service years

Answer 20

Cliff vesting schedule

Question 21

Workers become 20 percent vested after 2 years and to vest
at a rate of 20 percent each year thereafter until they are 100 percent vested after 6 years
of service

Answer 21

6-year graduated schedule

Question 22

Retirement plan that provides the participant with a fixed benefit
throughout retirement.

Answer 22

Defined benefit plan

Question 23

Retirement plan that requires specific contributions by an

employer to a retirement or savings fund established for the employee.

Answer 23

Defined contribution plan

Question 24

Defined contribution plan in which employees may defer income up to a
maximum amount allowed.

Answer 24

401(k) plan

Question 25

Retirement plan with elements of both defined benefit plans and
defined contribution plans

Answer 25

Cash balance plan

Question 26

Protection for providing monetary payments to an employee’s
beneficiaries upon the employee’s death, and offered only during a limited period based
on a specified number of years or maximum age.

Answer 26

Term life insurance

Question 27

A type of life insurance that provides protection to employees’
beneficiaries during employee’s’ employment and into the retirement years

Answer 27

Whole life insurance

Question 28

Means of dealing with the problem of unscheduled
absences by providing a certain number of days each year that employees can use for any
purpose.

Answer 28

Paid time off (PTO) banks

Question 29

Temporary leaves of absence from an organization, usually at reduced pay.

Answer 29

Sabbaticals