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  1. OSHA's General Duty Clause requires that:
    The General Duty Clause of OSHA requires that employers provide a safe working environment free of hazards, even if there are no standards governing the work area or industry.
  2. OSHA gives employees the right to:

    A. Request an OSHA investigation
    B. Override employer safety procedures
    C. File an unfair labor practice charge
    D. Refuse to wear safety equipment
    A. If employees believe an unsafe situation exits, they have the right to request an OSHA investigation; however, they are obligated to follow the employer's safety procedures, wear the proper protective equipment, and go through the proper channels in raising safety issues.  OSHA does not deal with unfair labor practices.
    (this multiple choice question has been scrambled)
  3. Which of the following OSHA standards is known as the Employee Right-To-Know Law?

    A. Personal Protective Equipment
    B. Hazard Communication
    C. Control of Hazardous Energy
    D. Occupational Noise Exposure
    B. The Hazard Communication standard requires that employees be informed of hazardous substances in the workplace through labeling, training, and written hazard communication programs.
    (this multiple choice question has been scrambled)
  4. An MSDS contains which of the following?

    A. Lockout and tagout signs
    B. Results of hearing exams
    C. Mine site inspection reports
    D. Inventory of hazardous chemicals
    D. A Material Safety Data Sheet (MSDS) contains an inventory of hazardous chemicals.
    (this multiple choice question has been scrambled)
  5. The Confined Space Entry Standard requires employers to:

    A. Provide continuous and unobstructed exit from a building
    B. Provide on-site emergency rescue teams
    C. Eliminate any confined spaces that may entrap workers
    D. Classify dangerous confined spaces as permit-required.
    D. This standard requires employers to determine which spaces are dangerous and to classify those spaces as "permit-required confined spaces".  A written safe-entry program must be prepared and made available for review by employees, their representatives, and OSHA.  However, on-site emergency rescue teams are not required.  The Emergency Exit Procedures standard requires continuous and obstructed exit from a building.
    (this multiple choice question has been scrambled)
  6. According to OSHA, which of the following occupational injuries must be recorded?

    A. All injuries resulting in transfer to another job
    B. All injuries, even those requiring minor first aid
    C. All injuries reported by workers, regardless of severity.
    D. All disabilities, even if they do not result in any loss of work time
    A.---Occupational injuries must be recorded if they result in death, disabilities that cause one or more lost workdays, restriction of work or motion, loss of consciousness, transfer to another job, medical treatment other than minor first aid, significant injury or illness diagnosed by a physician, work-related medical conditions, such as needlestick injuries or tuberculosis infections, or any work-related case involving cancer, chronic irreversible disease, a fractured or cracked bone, or a punctured eardrum.
    (this multiple choice question has been scrambled)
  7. OSHA's Form 300: Log of Work-Related Injuries and Illnesses must be completed:

    A. By every employer who has at least one employee
    B. Within ten working days of an injury
    C. Within (maybe three) eight hours of a work-related death
    D. By a person who observed the injury or illness
    C---OSHA's Form 300 requires employers with 11 or more employees to complete the report for each occupational illness or injury within seven working days from the time the employer learns of it.  A work-related death or hospitalization of three or more employees must be recorded and reported to the nearest OSHA office within eight hours.
  8. Employers calculate incidence rates for injuries and illnesses to determine:

    A. Employees who need safety training
    B. The company's standing in the industry
    C. The frequency of OSHA inspections
    D. Work sites that need to be carefully monitored.
    B --- Employers calculate incidence rate statistics for injuries and illnesses per 100 full-time employees.  These statistics can be used to determine where the company stands in the industry (nationwide or statewide) and HOW THE COMPANY COMPARES TO THE STANDARDIZED INDUSTRIAL CLASSIFICATION (SIC).  The statistics are NOT kept to single out employees who need safety training or particular work sites that need monitoring or to predict the frequency of OSHA inspections.
  9. OSHA gives employers the right to:

    A.disregard OSHA standards if company standards exist.
    B.apply for a temporary variance if meeting an OSHA standard would increase costs.
    C.refuse an OSHA inspection unless a search warrant is produced.
    D.sue OSHA if they disagree with a citation and proposed penalty.
    C –an employer has the right to request a search warrant before an inspection can begin.A is incorrect because a company may not disregard OSHA standards if they have standard in place. However, the company can apply to OSHA for a permanent variance if they can prove that company facilities or procedures are at least as effective as those required by the standard. B is incorrect because a temporary variance can be requested only if the company does not have the materials, equipment, or personnel to come up tot the standard within a required time. D is incorrect because the appropriate days action for an employer is to file a Notice of Contest with the OSHA Area Director within 15 days of receipt of a citation and proposed penalty.
  10. Which one of the following has the FIRST priority for inspection?

    A.Catastrophes and fatal accidents
    B.Employee complaints
    C.High-hazard industries
    D.Imminent danger
    D –imminent has the highest priority; in such a situation, there is a responsible certainty that death or serious physical harm could occur immediately or before the situation could be corrected through normal enforcement procedures.
  11. Which of the following OSHA violations is the LEAST serious?

    C.De minimis
    C – Willful violations are the most serious, followed by other-than-serious, repeat, and de minimis. De minimisviolations have no direct or immediate relationship to job safety or health and carry no penalty.
  12. Which of he following is the MOST important step in creating a strong safety culture?

    A.Involving employees and top management in the creation of safety policies
    B.Holding the line organization responsible for safety
    C.Providing employee incentives for meeting safety goals
    D.Allowing workers to file safety complaints
    A – The most important step is the commitment of employees and top management. While the other actions are necessary, they are not enough if there is no policy on which management and employees agree.
  13. Which of the following is NOT within the responsibility of the safety committee?

    A.Conduct area safety inspections and evaluate hazards.
    B.Observe employees for compliance with protective measures.
    C.Review accident and injury data.
    D.Complete OSHA paperwork for accidents and illnesses.
    D – The safety committee has an ongoing responsibility to monitor safety data, review procedures and equipment, evaluate hazards, and investigate accidents. However, the committee is not responsible for the completion of OSHA paperwork.
  14. After an employee removes a machine guard to keep the machine from jamming, he cuts his finger and requires medical treatment. This is an example of an:

    A.Unsafe act.
    B.Unsafe condition.
    C.Unrecognized hazard.
    D.Unsafe work assignment.
    A – An unsafe act is an improper action taken by an employee that results in an incident. Dressing improperly or removing safety devices are examples. An unsafe condition is a hazardous circumstance that is likely to lead to an incident such a poor ventilation, unsafe floor surfaces, and excessive work hours.
  15. Which of the following is the MOST important priority at an accident scene?

    A.Preserve the evidence.
    B.Keep management informed.
    C.Protect others from injury.
    D.Isolate witnesses.
    C –Protecting others from injury takes top priority. Secondary priorities include preserving evidence and keeping management informed. Holding witnesses together in one way to preserve evidence, but it is handled only after the other priorities are addressed.
  16. Which of the following symptoms is generally associated with a cumulative trauma disorder?

    A.Wrist pain
    B.Respiratory problems
    A –Cumulative trauma disorders consist of a variety of symptoms associated with the repetitive nature of work. For example, assembly-line workers using the same repetitive motion to assemble products or computer operators working on keyboards and at video terminals often show symptoms such as wrist, hand, or neck pain.
  17. A pregnant employee comes in contact with chemicals as a part of her job and occasionally suffers from minor skin rashes. In this situation, the employer must:

    A.transfer the employee to a job where there are no toxic substances.
    B.inform the employee of the hazards associated with the job.
    C.require the employee to take special protection measures.
    D.require the employee to get a doctor’s permission to continue working.
    B – In the Johnson Controls case, the Supreme Court ruled that decisions about the welfare of future children must be left to their parents rather than to employers who hire their parents. As a result, most sex-specific fetal protection policies that bar fertile women from working requiring contact with hazardous substances violates Title VII. However, the employer may minimize potential liability by fully informing female employees of the hazards of the job.
  18. The Toxic Substance Control Act of 1976 requires that:

    A.employees be required to wear protective equipment
    B.employers adopt sex-specific fetal protection policies
    C.physical conditions be evaluated by an outside consultant
    D.certain chemicals be pre-tested for safety.
    D ---- The Toxic Substance Control Act requires the pre-testing of certain chemicals to protect employees from chemicals, vapors, gases and fumes that may pose significant health risks.

    B is incorrect because Title VII regulates fetal protection policies and forbids sex-specific protection policies that do not fall within the BFOQ exception. C is incorrect because the law does not specify testing by an outside consultant.
  19. Which of the following is generally true of EAPs?

    A.Employees must report their progress to a supervisor.
    B.Supervisors may discuss the employee’s progress with the counselor.
    C.Employees may contact the EAP directly.
    D.Employees who do not make progress are dropped from the program.
    C – Employees make direct contact with the social service agency. They need not wait for a referral, and all communications that occur during counseling sessions are confidential.
  20. Employers are MOST likely to prevent substance abuse problems by:

    A.implementing random drug testing of all employees
    B.searching employee workstations and company vehicles
    C.establishing written policies and providing training
    D.tracking the individual productivity of.
    C – The best prevention strategy is to establish clear and specific substance abuse policies, provide employee training, and follow through on policy enforcement. Legal and privacy issues make drug searches and random tests difficult. Although tracking of employee productivity can indicate changes in productivity, substance abuse may not be the cause of the changes.
  21. The assignment of a level of probability for all types of losses to which an organization may be exposed is known as

    A.impact assessment.
    B.risk containment.
    C.vulnerability analysis.
    D.loss-prevention planning.
    C – Vulnerability analysis measures the degree of probability that a loss will occur by assigning levels of probability for all types of losses to which the organization may be exposed.
  22. Which of the following situations that lead to workplace violence can be controlled by an organization?

    A.Unstable economy
    B.Pressure for increased productivity
    C.Domestic problems
    D.Low self-esteem
    B – Conditions causing employee frustration and anger can lead to violence. Examples include pressure for productivity, rigid management style, and layoffs.
  23. Which of the following will be MOST effective in protecting proprietary information?

    A.Confidentiality and nondisclosure agreements.
    B.Prohibition of employee-installed software.
    C.Installation of surveillance cameras
    D.Banning of Internet and email access for employees.
    A – Confidentiality and nondisclosure agreements will be most effective in protecting proprietary information. Banning Internet and email access is impractical, and surveillance cameras would have a minimal impact. Prohibiting software installations is more for the protection of the computer network than for protection of proprietary information.
  24. Benefits are a form of indirect compensation designed to reward:
    • Loyalty 
    • Continued employment 
    • Enable employees to live less worrisome lives
  25. The #1 benefit for retaining employees is:
    Health insurance
  26. Life Cycle Stages of Benefits:
    Introduction - just the basics.  Not interested in 401(k), but more a cut of the action; profit-sharing or stock options

    Growth - more traditional.  Moderate with limited executive perks.

    Maturity - Comprehensive, with expanded executive perks

    Decline - Limit cost of benefits and perks
  27. Entitlement compensation philosophy applied to benefits:
    A liberal benefits package.

    Benefits tend to be equitable for all employees – not salary based (paternalistic employer)
  28. Define "contribution based benefits philosophy":
    Benefits related to performance.

    Benefits vary based on salary and job worth.
  29. List the types of termination benefits:
    • - COBRA
    • - Unemployment insurance
    • - Vacation payouts
    • - Severance
  30. What are the five benefit needs assessment steps?
    • Review organization strategy
    • Review total compensation philosophy
    • Review employee needs
    • Review current benefits 
    • Conduct gap analysis
  31. What is the purpose of a gap analysis in the final step of the needs analysis?
    Compares the following:

    • Organizational needs
    • Employee needs
    • Existing set of benefits.
  32. During a gap analysis, if the findings show that the need is not met, what is the corresponding action?
    Add or revise benefit
  33. During a gap analysis, if the findings show that the benefit is not addressing the need, what is the corresponding action?
    Drop or revise existing benefit
  34. During a gap analysis, if the findings show that the benefits overlap, what is the corresponding action?
    Revise to eliminate the overlap
  35. During a gap analysis, if the findings show that the benefits are underutilized, what is the corresponding action?
    Revise the existing benefit
  36. During a gap analysis, if the findings show that the benefits are too costly, what is the corresponding action?
    Apply cost containment
  37. What is the most accurate method for measuring how much employee value benefits?
    Paired comparison, or forced choice

    An example is like offering more contribution to the 401(k) plan, or a better dental plan.
  38. What are the purposes of benchmarking?
    To determine the relative cost comparison compared to industry or employment market competitors.
  39. What are the five indicators of benefit plan performance?
    * Employee turnover - this is rarely specifically due to the benefits

    * Employee attitude/exit interviews or surveys

    * Cost - this is almost always management's priority

    * Competitiveness/Value - benchmarking

    * Utilization - whether or not the program is being used.
  40. Define "contributory plan":
    Employees contribute either in whole or part of the cost to provide the benefit.

    Examples of Contributory Benefit Plans:

    • Social Security
    • Medical
    • Dental
    • 401(k) plan with an employer match
    • Life
    • Disability
  41. What is it called when the employer provides the benefit at NO COST TO THE EMPLOYEE?
    Non-contributory benefit plan

    • Examples of Non-Contributory Benefit Plans:
    • Defined benefit pension plan
    • Unemployment Insurance
    • Worker’s Compensation
    • Severance
    • Core group term life insurance
  42. What type of benefit plans has favorable tax status under ERISA?
    Qualified Benefit Plans


    • 401(k) plan
    • Pension plan
    • Health insurance
  43. What does ERISA stand for?
    Employee Retirement Income Security Act
  44. Benefits that must be provided to employees by employers in compliance with a legal requirement are called what?
    Mandated Benefits


    • o Social Security
    • o Worker’s Compensation
    • o Unemployment Insurance
    • o Health Insurance (starting in 2015)
  45. What year did the Social Security Legislation pass?
  46. What year was "old age" covered under Social Security?
  47. What year was "unemployment" covered under Social Security?
  48. What year was "Survivor's Insurance" covered under Social Security?
  49. What year was "disability insurance"  added under Social Security?
  50. When was Medicare Part A created?
  51. When was Supplemental medical part B passed under Social Security?
  52. What was added to be covered by Social Security in 2006?
    Prescription drugs Part D
  53. What type of employees are exempt from paying Social Security?
    • Church employees
    • Municipal workers
    • Railroad workers
    • Public utility workers
  54. How is SSI and Medicare calculated?
    Both employer and employees pay 6.2% of up to $117,700 of pay plus 1.45% of all earnings for Medicare.

    Grand total of 7.65% of income
  55. If you were born in 1954 or later, at what age can you receive an unreduced benefit from Social Security Retirement?  At what age can you receive a reduced benefit?
    Unreduced - 67

    Reduced - 62
  56. If you were born between 1938-1954, at what age can you receive an unreduced benefit from Social Security Retirement?  At what age can you receive a reduced benefit?
    Unreduced - 66 (and a graduated number of months)

    Reduced - 62
  57. If you were born between in 1937 or earlier, at what age can you receive an unreduced benefit from Social Security Retirement?  At what age can you receive a reduced benefit?
    Unreduced - 65 (and a graduated number of months)

    Reduced - 62
  58. Approximately how much of your benefit do you lose per year when you take a reduced benefit from Social Security Retirement?
    15% per year
  59. What is the compensation for a death benefit from Social Security?
    A $255 lump sum
  60. If an employee is trained how to do a job and still gets hurt, is the company still responsible for a Workers' Compensation benefit?
    Yes - Workers’ comp is a no fault system; employers pay all costs based on amount of payroll and experience.
  61. Workers’ compensation benefits include:
    • Medical care
    • Death benefits
    • Disability income
    • Rehabilitative services
  62. Subsistence payments to workers between jobs is also known as:
    Unemployment Insurance
  63. Is Unemployment Insurance administered at the federal or state level?
    Both!  It's a joint federal/state program administered by individual states.
  64. Who finances/funds Unemployment Insurance?
    It's financed by the employer - there are no employee contributions.
  65. How much can an employee contribute towards their Unemployment Insurance every year?
    None - Unemployment Insurance is financed only by the employer.
  66. Who holds the money allocated for Unemployment Insurance?
    It's held in a federal trust for each state.
  67. What percentage of the workforce is covered by Unemployment Insurance?
  68. What are the eligibility criteria to receive Unemployment Insurance benefits?
    • Actively seeking work
    • Not refuse suitable employment
    • Not leave voluntarily (penalty period before benefits start)
    • Not unemployed due to labor dispute (except NY & RI)
    • Have worked minimum number of weeks
    • No gross misconduct
    • Benefits are payable for 26 weeks – 13 week extension possible
  69. What is "actively seeking work" a criteria for?
    To receive Unemployment Insurance benefits
  70. What is "not refusing suitable employment" a criteria for?
    To receive Unemployment Insurance benefits
  71. What is "not leaving voluntarily before your benefits start" a criteria for?
    To receive Unemployment Insurance benefits
  72. As part of conducting a benefit plan needs assessment, the HR professional has looked at the organization’s business strategy and compensation philosophy. What is the NEXT step that should be taken?

    a. Look at market conditions to see what benefits competitors offer.
    b. Determine which benefits should be included in the plan.
    c. Conduct a utilization review to determine how benefits are used.
    d. Determine employee needs with regard to benefits.
    D - Determine employee needs with regard to benefits.
  73. Which of the following is a possible outgrowth of a benefit plan needs assessment?

    A. Increasing salaries for exempt employees
    B. Paying exempt employees overtime
    C. Setting new strategies or objectives for the company
    D. Adding medical coverage for chiropractic care
    D. Adding medical coverage for chiropractic care 

    The other options are NOT benefits
    (this multiple choice question has been scrambled)
  74. A 41-year old man died while on vacation, leaving a wife and five children under the age of 12. The man was the primary breadwinner, working full-time and carrying the medical and retirement benefits for the family. Which of the following federally mandated benefits can the man’s wife expect to receive?

    A. Social Security disability benefits
    B. Death benefits under Worker’s Compensation
    C. Unemployment insurance coverage for up to 26 weeks
    D. Social Security death benefits of $225 and monthly income for herself and all dependent children under the age of 18
    D. Social Security death benefits of $225 and monthly income for herself and all dependent children under the age of 18
    (this multiple choice question has been scrambled)
  75. A company that announces that it will close a plant in six months must provide which of the following mandated benefits?

    A. Medicare benefits
    B. Outplacement
    C. A severance compensation and benefits package
    D. Unemployment benefits to an employee actively seeking work
    D. Unemployment benefits to an employee actively seeking work 

    The other three options are not required
    (this multiple choice question has been scrambled)
  76. According to the law, worker’s compensation benefits must be provided

    A. regardless of who is at fault in a work related accident.
    B. only in cases where the employee followed the organization’s safety and health rules.
    C. only to workers in the construction and other “heavy” work industries.
    D. for off-the-job injuries.
    A. regardless of who is at fault in a work related accident.
    (this multiple choice question has been scrambled)
  77. True or False?  Benefits can maximize the effectiveness of compensation plans while minimizing tax liabilities.
  78. True or false? Benefits can minimize the effectiveness of compensation plans while maximizing tax liabilities.
    False - it's the other way around.  Benefits can maximize the effectiveness of compensation plans while minimizing tax liabilities.
  79. When can assets in ERISA plans be used?
    Only for the welfare of the plan participants
  80. Someone who manages or administer an ERISA plan is called a:
  81. These people are held criminally responsible for actions permitted that are not in the participant’s best interests:
  82. If someone is a "fiduciary", they are:
    Someone who manages an ERISA benefit plan, and are expected to act in the participant's best interests under penalty of being held criminally responsible for actions permitted.
  83. The law requires that a fiduciary must act “with the care, skill, prudence and diligence …that a prudent man acting in a like capacity” would act.
    The Prudent Person Rule
  84. Plans that offer favorable tax treatment under ERISA are called:
    Qualified Plans
  85. Qualified plans are:
    Plans that offer favorable tax treatment under ERISA
  86. Common characteristics of qualified plans:
    • o Eligibility and plan coverage - Non-discrimination and Top heavy rules
    • o Limitations on benefits provided
    • o Funding: Asset segregation; use of trust accounts & separate accounts
    • o Fiduciary responsibility - Minimum qualifications for plan administrators
    • o Controls on investments (Prudent Person Rule)
    • o Controls on tax deductible contributions for fully funded plans
    • o Vesting
    • o Communications: Annual reporting requirement to plan participants
    • o Annual audit required
    • o Minimum funding standards (defined benefit plans)
    • o Accelerated contributions for under funded plans (defined benefit plans)
    • o Insurance from PBGC (defined benefit plans only)
    • o Complaint/Appeal procedures
  87. Advantages of qualified plans:
    • o Employee taxed when benefits are received
    • o Employer can take an immediate tax deduction (within limits) to fund future benefits
    • o Earnings on fund not subject to income tax while in the fund
    • o Exemption from state regulations on insurance - if this is offered under ERISA, then they only answer to the federal level.
  88. What are two types of Deferred Pay Plans?
    Deferred salary - a number of compensation plans that allow salary payments to accrue to the employee at some point in the future (usually a retirement plan).

    Deferred incentives - an individual or group incentive which accrues to employees at some future point in time. Taxes are paid by the plan participants when benefit payments are made.
  89. What is it mean if someone has a deferred salary?
    They will receive a number of compensation plans that allow salary payments to accrue to the employee at some point in the future (usually a retirement plan)
  90. Define "deferred incentives" -
    - an individual or group incentive which accrues to employees at some future point in time. Taxes are paid by the plan participants when benefit payments are made.
  91. Regarding Retirement Benefits, how many different types can their be?
    Plans can either be defined benefit or defined contribution
  92. What does it mean when someone says their retirement benefits have "portability"?
    They have the ability to move pension benefits from one employer to another. 401(k) assets can be rolled over to another employer’s 401(k) plan.
  93. When is an actuary required in a Defined Benefit Plan?
    When the annual contribution is being determined.
  94. What plan is required to be insured by the Pension Benefit Guarantee Corporation (PBGC)?
    A Defined Benefit Pension Plan
  95. Up to what amount will the PBGC insure a pension?
  96. When the benefit at retirement is easily understood, that is part of a:
    Defined Benefit Pension Plan
  97. When the value to the employee is not easily understood, what type of retirement plan is that?
    Defined Benefit Pension Plan
  98. What type of retirement plan is it when the company absorbs all the risk?
    Defined Benefit Pension Plan
  99. If the total costs are unknown over time, that is what type of retirement plan?
    Defined Benefit Pension Plan
  100. What type of retirement plan has an unknown benefit at retirement?
    Defined Contribution Plan (ie. 401(k) plan)
  101. When the employees assume the risk of investment, that is what type of retirement plan?
    Defined Contribution Plan (ie. 401(k) plan)
  102. Is a Defined Contribution Plan more or less costly than a pension plan?
    MUCH less costly
  103. What are the characteristics of a Defined Benefit Plan?
    •  Benefit at retirement is easily understood
    •  Value to employee is not easily understood
    •  Company absorbs all risk (investment returns)
    •  Total costs unknown over time.
    •  Administration complex and costly.
    •  Actuary required to determine the annual contribution
    •  Insured by the Pension Benefit Guarantee Corporation (PBGC)
  104. What is the PBGC?
    Pension Benefit Guarantee Corporation
  105. What are the characteristics of a Defined Contribution Plan?
    •  Unknown benefit at retirement
    •  Employees assume risk of investment
    •  Employer cost known up front
    •  Easier to communicate and administer.
    •  Not insured
    •  Much less costly than a pension plan
  106. When contributions (ultimate cost to the employer) are not defined and the employer agrees to accept all risk and pay a benefit amount after retirement, that is called a:
    Defined Benefit Pension
  107. When the benefit (exact amount available to the employee) is not defined, and the employer pays specific amount into a fund for the participant. Benefit amount at retirement is not guaranteed. Payments available at retirement, termination, disability, death or hardship.
    Defined Contribution Plan
  108. What is a 529(c) plan?
    Tax deferred savings plan for child’s education
  109. You can use tax deferred savings plan for child’s education in what kind of plan?
    529(c) plan
  110. What does QUADRO stand for?
    Qualified Domestic Relations Order
  111. What is a QUADRO?
    A court order (usually the result of a divorce) that recognizes the right of an alternate payee (usually the ex-spouse) to receive all or a portion of the benefits under a retirement plan.
  112. What does FASB stand for?
    Financial Accounting Standards Board
  113. Is FASB a governmental agency?
  114. What does FASB do?
    Sets the accounting standards and procedures for companies that sell stock on the Stock Exchange. FASB 106 Ruling requires employers to show the estimated cost of retiree medical benefits as a liability on the balance sheet. Also requires the accrual of the estimated cost of retiree medical benefits during the active career of the employee.
  115. What law says that the bigger the group, the less likely adverse action will occur?
    Law of Large Numbers
  116. What type of health care funding option has all the claims risk born by the insurance company?
    Fully insured
  117. What type of plan is it called when the employer assumes all claims risk?
    Self-insured plans
  118. Define the characteristics of indemnity plans:
    (Fee for Service) (often used by union plans)

    • o Collected premiums cover:
    •  Medical charges
    •  Administrative costs
    •  Marketing costs (Not if self insured)
    •  Taxes (Not if self insured)
    •  Profits (Not if self insured)

    • o Covered employees go to any qualified physician or hospital
    • o There is an incentive for more services to be provided
    • o Insured submits claims
    • o Usually a fully insured plan
  119. What are the different types of Managed Care Plans?
    • Preferred Provider Organization (PPO)
    • Consumer Directed Health Plan
    • Point of Service (POS) Plans
    • HMO Plans
    • Exclusive Provider Organization (EPO)
  120. Characteristics of a PPO
    •  Negotiated discounted fees with networks of health care providers
    •  Members can elect to receive treatment outside the network but have to pay more
    •  Most common plan in the marketplace, but it's the least expensive
    • There are penalties for leaving the network
  121. Characteristics of a Consumer Directed Health Plan
     Deductibles cannot be less than $1,250 per person or $2,400 per family per year.

     A Health Savings Account or Health Reimbursement Account can be used to provide first dollar coverage. Balance can be rolled over each year.
  122. Characteristics of a Point of Service (POS) Plan:
    •  Combination of PPO and HMO
    •  No deductibles for primary care physician visits.
    •  Flat dollar co-pay used for many services
  123. Characteristics of HMO Plans
    •  are capitated (per head) plans - the doctor is paid a flat amount and is then responsible for all care
    •  preventive care and cost containment emphasized
    •  covered members must use HMO doctors and hospitals
    •  no need to submit claims

    • Types of HMO’s
    •  Group model - contracts with doctors’ groups
    •  Staff model – employs doctors
    •  Individual practice associations (IPA) – contracts with doctors in private practice
  124. When participants must use providers in the network or no payment will be made, that is what type of Managed Care Plan?
    Exclusive Provider Organization (EPO)
  125. What a person has to pay before insurance pays any benefit to the member:
  126. The percentage of cost a plan pays after a deductible is met is ______
  127. The amount paid by the member at the time a service or prescription is purchased is called what?
  128. What is the federal law that establishes standards for the use and disclosure of protected health information?
  129. What established patient rights, including individuals' access to and correction of health records?
  130. Name some health care cost containment strategies:
    •  Change delivery system to managed care
    •  Redesign policies
    •  Promote wellness
    •  Gatekeepers – pre-admission testing, pre-authorization and utilization review
    •  Shift costs to employees (i.e. premium increases, raise deductibles)
    •  Disease management programs
    •  Incentives to change behaviors
    •  Consumer Directed or High Deductible Plans
  131. Which of the following protects employees covered by private retirement programs?

    a) Tax Act of 1973
    b) Employee Retirement Income Security Act
    c) Tax Equity and Fiscal Responsibility Act
    d) Age Discrimination in Employment Act
    B - ERISA
  132. Which of the following retirement plans is portable for the employee?

    a) Defined Benefit Pension Plan
    b) 401(k) Plan
    c) Final-pay formula
    d) Career-average formula
    B.) 401(k) plan
  133. A retirement plan that allows employees of a for-profit company to reduce their regular pay and contribute a portion of it toward retirement on a tax-deferred basis is most likely based on which of the following Internal Revenue Code sections?

    a) 125
    b) 401(k)
    c) 403(b)
    d) 457
    B.) 401(k)
  134. An employee opts to save money in a tax-deferred account to be used to pay for a child’s college education in the future. This type of plan is most likely a

    a) Money purchase plan.
    b) 401(k) plan.
    c) 403(b) plan.
    d) 529 plan.
    D.) 529 plan
  135. Which of the following is a funding option for a health plan?

    a) Self-insurance
    b) HMO coverage
    c) PPO coverage
    d) COBRA coverage
    A.) Self-insurance
  136. Which of the following strategies will NOT reduce employer health-care costs?

    A) Conducting utilization reviews
    B) Promoting a wellness program
    C) Establishing a gatekeeper system
    D) Eliminating caps on lifetime medical benefit coverage
    D) Eliminating caps on lifetime medical benefit coverage
    (this multiple choice question has been scrambled)
  137. What is the focus of dental insurance?
  138. What is COBRA?
    Continuation of employer- sponsored medical, dental and vision insurance as well as healthcare reimbursement account
  139. What are the circumstances for which continuation (COBRA) is required?
    • o Termination (voluntary or not) 18 months
    •  If gross misconduct, no continuation
    • o Disabled – 29 months
    • o Divorce or death of employed spouse –36 months
    • o Dependent child loses eligibility – 36 months
  140. What insurance provides income for non-work related illnesses or disabilities?
    Disability insurance
  141. What are the two types of disability?
    Own Occupation and Any Occupation
  142. What type of disability is it when benefits are paid if the employee cannot perform duties of their OWN job?
    Own Occupation
  143. What type of disability is it when benefits are paid if the employee cannot perform duties of ANY job at ANY company?
    Any Occupation
  144. What are rehabilitation benefits?
    Allows a gradual return to work
  145. What law requires accommodations for disabled employees?
    The Americans with Disabilities Act
  146. Define life insurance:
    Benefits paid in the event of an employee's death
  147. Intended to provide cheap life insurance benefit with no cash build-up. Lump sum payment to beneficiaries. The payment could be a flat amount or a multiple of salary. Rarely based on service or position. Normally the premium is paid by the employer.
    Basic Group Term Life
  148. Additional insurance with premiums paid by the employee at group rates. May require evidence of insurability. Usually in fixed increments based on salary with a cap.
    Supplemental Life Insurance
  149. Benefits payments not paid if death or loss of limb or eye is due to disease. Loss of limb or eye due to accident usually results in ½ benefits. Exclusions for war, suicide and hazardous life pursuits are common.
    Accidental Death and Dismemberment Insurance (AD&D)  -  this MUST be the result of an accident
  150. Provides family counseling, psychological evaluation and referrals for substance abuse
    Employee Assistance Program (EAP)
  151. What are the basic services provided by a group legal plan?
    • o Real estate
    • o Bankruptcies
    • o Wills
    • o Consultations
    • o Minor criminal representation
  152. What is salary continuation based on the numbers of years of service?
    Severance package
  153. Employer programs related to elder care:
    • o supportive leave policy
    • o sponsored group long-term care insurance
    • o employee assistance programs
  154. Long term care insurance-provides coverage for what three things?
    • nursing home care
    • in-home care 
    • hospice care.

    Premiums are determined by age and the policy is portable
  155. Benefits addressing issues of child care:
    • o On site child care centers
    • o Resource and referral services
    • o Direct financial assistance (may be taxable income)
    • o Dependent Care Reimbursement Account
    • o Flexible work schedules
    • o Flexible policies i.e. parental & adoption leave
  156. What is the maximum amount of tuition reimbursement before the money becomes taxable?
    $5,250 each year
  157. Characteristics of vacation plans:
    • o Accrual of vacation
    • o Based on length of service o Use requires supervisory approval
    • o Requires advance request
    • o Allows for some carryover (balance sheet liability)
    • o Most pay at 100% of earnings
    • o Many states require the payout of earned vacation at termination
  158. Pooling all paid time off (vacation, personal, sick and possibly holidays) into a single leave bank is called:
    Paid Time Off (PTO)
  159. Most employers offer how many holidays per year, depending on the industry?
    6-12 per year
  160. Types of Civic Paid Leave:
    • - Jury Duty
    • - Election Duty
    • - Witness Duty
    • - National Guard/Military Reservist
  161. Family Medical Leave Act - 1983 - says what?
    •  Employees must have 12 months of service within previous 7 years to be eligible
    •  Employees must have worked 1250 hours in last 12 months to be eligible.
    •  Applies if worksite has 50+ employees within a 75 mile radius (and governmental agencies)
    •  Covers all but key employees (highest paid 10%)
    •  Guaranteed health benefits at same level and cost as if employee continued to work
    •  Must be given original job or equivalent position at no reduction in pay, benefits or employment terms upon return to work
    •  Leave can be up for 12 weeks in any 12 month period (calendar or rolling 12 month period)
    •  Enforced by Wage and Hour Division of Department of Labor
    •  Leave not required to be paid, but some employers allow use of personal and sick time to care for dependents
    •  Employer can require that an employee use all vacation first before unpaid time is allowed.
    •  FMLA time off can be difficult to track especially if used on an intermittent basis.
  162. What can an employee take FMLA-protected leave for?
    • - a serious health condition requiring overnight hospitalization 
    • - residential care by a physician such as the birth of child, care for a newborn, adoption, employee’s medical condition or care for ill relative.
    • - Time off is also available if a child, parent or spouse is on active duty in the armed forces in support of a deployment.
    • -Also, up to 26 weeks can be used to care for a family service member injured in the line of duty.
  163. “Use it or lose it.” Any amounts deposited in the account and not used for eligible expenses will be forfeited at the end of the plan year.
    Flexible Spending Accounts (FSA)
  164. How many pre-tax dollars can someone annually direct towards their Dependent Care Account?
  165. Advantages of a cafeteria plan:
    • o Employers and employees save FICA (Social Security) taxes
    • o Employees also save on income taxes not paid on compensation used to pay premiums.
    • o Flexibility – benefits can change as lifestyles change
    • o Employees can select just the benefits they need
    • o Employees don’t pay for unused benefits
  166. Disadvantages of a cafeteria plan
    • o Employees can choose wrong benefits
    • o Recordkeeping/Administration costs
    • o Non-discrimination tests
    • o Adverse selection
    • o Communications
  167. Define expatriate -
    Employees who leave their own country (from which citizenship is granted) to work in another.

    Example: An American who works in England.
  168. Define Foreign National:
    Employees whose work location is in a country different than their native country and different from the country the company is located in. In terms of employment, the term is often used to designate "an employee working temporarily in an assignment country, who is neither a national of the assignment country nor of the country in which the corporate headquarters is located."

    Example: English workers living/working in France employed by a US company
  169. Factors which are important when administering a foreign national and expatriate benefits program:
    • o Relocating employees to foreign locations is becoming more commonplace.
    • o Relocating an employee overseas can be a very expensive proposition.
    • o The goal of "keeping the employee whole" must always be foremost in your mind.
    • o The impact of currency exchange risk, inflation, and double taxation can significantly impact the employee’s purchasing power.
  170. . Which of the following health plans do not allow an employee to rollover unused account balances from year to year?

    A) Full cafeteria plans
    B) Premium-only plans
    C) Indemnity plans
    D) Flexible spending accounts
    D) Flexible spending accounts
    (this multiple choice question has been scrambled)
  171. Which of the following benefits would typically pay benefits to an employee who is out of work for 65 days while recovering from an illness?

    A) Short-term disability coverage
    B) Long-term disability coverage
    C) Social Security disability benefits
    D) Employer-provided sick leave
    A) Short-term disability coverage
    (this multiple choice question has been scrambled)
  172. Which of the following employer-paid benefits would an employee receive tax-free?

    A) Two weeks of paid vacation
    B) $1,500 for taking a computer class at a community college
    C) $500 award for a labor-saving suggestion
    D) Ten days of sick leave at 100% of original salary
    B) $1,500 for taking a computer class at a community college
    (this multiple choice question has been scrambled)
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Flash cards for PHR exam
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