UGA RMIN 4000 Test 4 Questions and Answers (Graded A)

5 types of employee benefits - ANSWER-1. Medical expenses 2. Loss of income due to disability 3. Loss of income due to death 4. Loss of income due to retirement 5. Loss of income due to unemployment Medical expenses - ANSWER--health insurance -FSAS/HSAS (pre-tax health savings account) -workers comp. Loss of income due to disability - ANSWER--occupational disability: workers comp/lost wages -non-occupational disability: --sick leave/paid time off (PTO)- 1-2 weeks --short term disability (STD): about 1 week to 3 months: about 60% wages --long term disability (LTD): > 3 months: about 60% wages Loss of income due to death - ANSWER--life insurance (UGA pays 25k for life ins.) -survivor benefits under retirement plans: 401(k)- inheritance: continue pensions payments for surviving spouse -workers comp. death benefit -social security death benefits Loss of income due to retirement - ANSWER--defined benefit (DB) plan : pension -defined contribution (DC) plan: 401(k) for-profit firm: 403(b) non-profit firm -social security retirement benefits Loss of income due to unemployment - ANSWER--unemployment insurance -severance Which benefits are firms required to offer? - ANSWER--"social benefits": workers comp., unemployment ins., OASDI -health ins. per the ACA's "employer mandate" Why do firms offer employee benefits? 6 reasons - ANSWER-1. taking advantage of "group insurance" -better rates -less rigorous underwriting 2. income/pay roll tax advantages -employees: many benefits are not taxable income -employers: payroll tax (FICA) calculated on cash wages 3. Required by law 4. attract and return capable employees 5. enhance productivity of employees -childcare/take dog to work: reduce interruptions, coffee: enhance energy, profit sharing programs: align incentives, feel valued: more likely to be productive 6. Retire employees- structure retirement plan to encourage employees to retire, EX. P