HURM 4640 EXAM 1 QUESTIONS AND ANSWERS
Employers can do very little to influence the provisions and payments of legally required benefits (e.g.,
Social Security, Unemployment Compensation, etc.) - CORRECT ANSWER✅✅False
Employers can control the number of employees hired, control the amount of overtime worked, fight
unemployment, etc.
Benefit plans which require some sharing of expense between employer and employee (contributory
plans) tend to provide broader coverage and gain better employee understanding of value. - CORRECT
ANSWER✅✅True
Because employers get "wholesale" rates and better tax considerations on pension and insurance plans,
contributory plans will soon be outmoded. - CORRECT ANSWER✅✅False
The most rapid increases in employee benefits in recent years have been in payments to social
insurance programs and the cost of medical expense plans. - CORRECT ANSWER✅✅False
Social insurance programs should be replaced with retirement and savings programs
Overtime and premium pay are forms of direct compensation and therefore generally are not classified
as employee benefits (indirect compensation). - CORRECT ANSWER✅✅True
According to the three tier model presented in class, basic term life insurance is normally considered a
mandatory benefit. - CORRECT ANSWER✅✅False
Basic term life insurance is a core benefit
In 2008, benefits were 39.2 % of wages and salaries. - CORRECT ANSWER✅✅False
29.2%
Is Social Security Federally or State Administered? - CORRECT ANSWER✅✅Federal
Is Medicare Federally or State Administered? - CORRECT ANSWER✅✅Federal
,Is Family and Medical Leave Federally or State Administered? - CORRECT ANSWER✅✅Federal
Is Worker's Compensation Federally or State Administered? - CORRECT ANSWER✅✅State
Is Unemployment Insurance Federally or State Administered? - CORRECT ANSWER✅✅State
Virtually every conceivable employee benefit qualifies as a "mandatory subject for bargaining." -
CORRECT ANSWER✅✅True
Most benefits enjoy either a tax-exempt or tax-deferred status. - CORRECT ANSWER✅✅True
Tax-exempt: Will not be taxed
Tax-deferred: Will be taxed later
An employee's compensation tends to create his/her standard of living: benefits protect it. - CORRECT
ANSWER✅✅True
Once an employee benefit plan is established, it cannot be withdrawn or reduced. - CORRECT
ANSWER✅✅False
It can be changed, but the employee must be notified
All of the following are typically included in a "narrow" definition of employee benefits EXCEPT:
A. group life insurance.
B. pension plans.
C. educational expense allowances.
D. short-term disability benefits. - CORRECT ANSWER✅✅C. educational expense allowances
DASRU
Group life insurance - Sickness
,Pension Plans - Retirement
Short-term disability benefits - accident
Worker's compensation fits into which of the five categories of employer benefits or costs?
A. Legally required social insurance payments.
B. Payments for private insurance and retirement plans.
C. Payments for time not worked.
D. Extra cash payments to employees.
E. Extra cost payments to employees. - CORRECT ANSWER✅✅A. Legally required social insurance
payments.
Based on U.S. Chamber of Commerce statistics, all of the following statements concerning the
percentage of payroll spent by employers for employee benefits is correct EXCEPT:
A. Almost two-thirds of this percentage is for medical expense benefits.
B. The percentage for individual businesses varies significantly.
C. Within specific industries, the percentage tends to be higher for firms with 100 or more employees
than for firms with fewer than 100 employees.
D. The percentage tends to be somewhat higher for hourly employees than for salaried employees. -
CORRECT ANSWER✅✅A. Almost two-thirds of this percentage is for medical expense benefits.
Reasons for the growth of group insurance include which of the following?
I. The influence of organized labor
II. Legislation that mandates benefits
A. I only
B. II only
C. Both I and II
, D. Neither I nor II - CORRECT ANSWER✅✅C. Both I and II
Age discrimination in employment act prohibits discrimination for workers age 40 or older. - CORRECT
ANSWER✅✅True
ADEA applies only to employers with 15 or more employees. - CORRECT ANSWER✅✅False
20 or more employees
Group benefits other than medical expense can be reduced for older employees only if cost justified and
only if done on a benefit-by-benefit basis. - CORRECT ANSWER✅✅False
It can also be done on a benefit package basis
The age discrimination in employment act allows medical expense benefits to be reduced for older
employees only if cost justified. - CORRECT ANSWER✅✅False
Can not reduce medical expense at all
The ADEA requires that benefits be continued for retired workers. - CORRECT ANSWER✅✅False
The ADEA says when participation in benefit plans, other than medical expense plans, is voluntary the
company can require larger contributions instead of lowering benefits. - CORRECT ANSWER✅✅True
Companies can not lower benefits, only require larger contributions to the benefits.
The ADEA says that companies must keep the proportion spent for benefits at least constant. - CORRECT
ANSWER✅✅True
When a worker is over 65 and retired Medicare is primary for medical expenses. If over 65 and working,
the employer's plan is the primary payer of benefits. - CORRECT ANSWER✅✅True
Group term life insurance is usually not reduced until age 65. - CORRECT ANSWER✅✅True
Employers can do very little to influence the provisions and payments of legally required benefits (e.g.,
Social Security, Unemployment Compensation, etc.) - CORRECT ANSWER✅✅False
Employers can control the number of employees hired, control the amount of overtime worked, fight
unemployment, etc.
Benefit plans which require some sharing of expense between employer and employee (contributory
plans) tend to provide broader coverage and gain better employee understanding of value. - CORRECT
ANSWER✅✅True
Because employers get "wholesale" rates and better tax considerations on pension and insurance plans,
contributory plans will soon be outmoded. - CORRECT ANSWER✅✅False
The most rapid increases in employee benefits in recent years have been in payments to social
insurance programs and the cost of medical expense plans. - CORRECT ANSWER✅✅False
Social insurance programs should be replaced with retirement and savings programs
Overtime and premium pay are forms of direct compensation and therefore generally are not classified
as employee benefits (indirect compensation). - CORRECT ANSWER✅✅True
According to the three tier model presented in class, basic term life insurance is normally considered a
mandatory benefit. - CORRECT ANSWER✅✅False
Basic term life insurance is a core benefit
In 2008, benefits were 39.2 % of wages and salaries. - CORRECT ANSWER✅✅False
29.2%
Is Social Security Federally or State Administered? - CORRECT ANSWER✅✅Federal
Is Medicare Federally or State Administered? - CORRECT ANSWER✅✅Federal
,Is Family and Medical Leave Federally or State Administered? - CORRECT ANSWER✅✅Federal
Is Worker's Compensation Federally or State Administered? - CORRECT ANSWER✅✅State
Is Unemployment Insurance Federally or State Administered? - CORRECT ANSWER✅✅State
Virtually every conceivable employee benefit qualifies as a "mandatory subject for bargaining." -
CORRECT ANSWER✅✅True
Most benefits enjoy either a tax-exempt or tax-deferred status. - CORRECT ANSWER✅✅True
Tax-exempt: Will not be taxed
Tax-deferred: Will be taxed later
An employee's compensation tends to create his/her standard of living: benefits protect it. - CORRECT
ANSWER✅✅True
Once an employee benefit plan is established, it cannot be withdrawn or reduced. - CORRECT
ANSWER✅✅False
It can be changed, but the employee must be notified
All of the following are typically included in a "narrow" definition of employee benefits EXCEPT:
A. group life insurance.
B. pension plans.
C. educational expense allowances.
D. short-term disability benefits. - CORRECT ANSWER✅✅C. educational expense allowances
DASRU
Group life insurance - Sickness
,Pension Plans - Retirement
Short-term disability benefits - accident
Worker's compensation fits into which of the five categories of employer benefits or costs?
A. Legally required social insurance payments.
B. Payments for private insurance and retirement plans.
C. Payments for time not worked.
D. Extra cash payments to employees.
E. Extra cost payments to employees. - CORRECT ANSWER✅✅A. Legally required social insurance
payments.
Based on U.S. Chamber of Commerce statistics, all of the following statements concerning the
percentage of payroll spent by employers for employee benefits is correct EXCEPT:
A. Almost two-thirds of this percentage is for medical expense benefits.
B. The percentage for individual businesses varies significantly.
C. Within specific industries, the percentage tends to be higher for firms with 100 or more employees
than for firms with fewer than 100 employees.
D. The percentage tends to be somewhat higher for hourly employees than for salaried employees. -
CORRECT ANSWER✅✅A. Almost two-thirds of this percentage is for medical expense benefits.
Reasons for the growth of group insurance include which of the following?
I. The influence of organized labor
II. Legislation that mandates benefits
A. I only
B. II only
C. Both I and II
, D. Neither I nor II - CORRECT ANSWER✅✅C. Both I and II
Age discrimination in employment act prohibits discrimination for workers age 40 or older. - CORRECT
ANSWER✅✅True
ADEA applies only to employers with 15 or more employees. - CORRECT ANSWER✅✅False
20 or more employees
Group benefits other than medical expense can be reduced for older employees only if cost justified and
only if done on a benefit-by-benefit basis. - CORRECT ANSWER✅✅False
It can also be done on a benefit package basis
The age discrimination in employment act allows medical expense benefits to be reduced for older
employees only if cost justified. - CORRECT ANSWER✅✅False
Can not reduce medical expense at all
The ADEA requires that benefits be continued for retired workers. - CORRECT ANSWER✅✅False
The ADEA says when participation in benefit plans, other than medical expense plans, is voluntary the
company can require larger contributions instead of lowering benefits. - CORRECT ANSWER✅✅True
Companies can not lower benefits, only require larger contributions to the benefits.
The ADEA says that companies must keep the proportion spent for benefits at least constant. - CORRECT
ANSWER✅✅True
When a worker is over 65 and retired Medicare is primary for medical expenses. If over 65 and working,
the employer's plan is the primary payer of benefits. - CORRECT ANSWER✅✅True
Group term life insurance is usually not reduced until age 65. - CORRECT ANSWER✅✅True
