Module 3 Benefits

Question 1

Which of the following best describes the two primary elements of benefits programs?

A. Income protection and pay for time not worked
B. Health insurance and social security
C. Medical and dental plans
D. Income protection and retirement

Answer 1

A. Income protection and pay for time not worked

Question 2

Which of the following is a major factor influencing the growth and change of employee benefits?

A. The availability and quality of internal data
B. The recent market data
C. The government
D. Defined benefits retirement plans

Answer 2

C. The government

Question 3

Which of the following is typically considered a type of income protection program?

A. Vacation/holiday benefits
B. Retirement benefits
C. Sick leave
D. Variable pay

Answer 3

B. Retirement benefits

Question 4

Which of the following refers to a pay for time not worked program?

A. Merit-based pay
B. Holiday pay
C. Weekend differential pay
D. Commission pay

Answer 4

B. Holiday pay

Question 5

Benefits

Answer 5

Programs that supplement cash compensation. Health, income protection, savings, & retirement programs which provide security for EEs & their families.

Question 6

Elements of benefits (2)

Answer 6

Income protection programs

Pay for time not worked programs

Question 7

Income protection programs (definitions & examples of types)

Answer 7

Designed to protect the standard of living & protect from catastrophic losses

Mandatory - unemployment, medical, retirement
Voluntary - wellness, mental/behavioral health, life insurance

Question 8

Pay for time not worked (definition & examples of types)

Answer 8

Designed to protect income flow during periods when the EE is not working

At work - training, breaks (many items guided by FLSA)
Not at work - holidays, vacation

Question 9

Factors influencing benefits (6)

Answer 9

1. Competitive practices
2. Employee demands
3. Regulatory and taxation
4. Corporate philosophy
5. Costs and perceived value
6. Changing workforce demographics

Question 10

Major US benefits laws & their definitions

Answer 10

ERISA - Employee Retirement Income Security Act. Responsibility divided among DOL, DOT, & IRS. Designed to protect the interests of participants in employee benefits plans.

PPACA - Patient Protection & Affordable Care Act, commonly called the ACA. Enforced by Health & Human Services Department, DOT, & IRS. Expanded access to coverage for uninsured Americans, improves quality, lowers overall costs.

Question 11

Income protection programs (3)

Answer 11

Health care benefits
Welfare benefits
Retirement benefits

Question 12

Common health care benefits (4)

Answer 12

Dental
Vision
Prescription drug
Behavioral health plans

Question 13

Common medical plans (6)

Answer 13

1. Indemnity
2. Managed indemnity
3. Health maintenance organization (HMO)
4. Point of service (POS)
5. Preferred provider organization (PPO)
6. Consumer driven health plan (CDHP) (in US)
   - Health reimbursement account (HRA)
   - Health saving account (HSA)

Question 14

Welfare benefits (2)

Answer 14

Life insurance

Disability insurance

Question 15

Sources of retirement benefits

Answer 15

Government programs

Company-provided programs

Question 16

Retirement plan design should consider these factors (6)

Answer 16

• Eligibility for social security & other mandatory benefits
• Effect of other governmental restrictions (e.g. tax treatment)
• Competitive practices
• Union/work council directives
• Cost
• Business need

Question 17

Types of retirement plans & their definitions

Answer 17

Defined benefit (DB) plans - benefit at retirement based on formula that considers pay & service; plan sponsor at risk for financial resources

Defined contribution (DC) plans - most prevalent DC plan is the 401(k); characterized by employee & employer contributions made to individual participant accounts; employee at risk for financial resources

Hybrid plans - cash balance plans that combine elements of DB & DC plans