HURM 4640 Exam 2
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1. Which of the following statements about controlling C. Both I and II
employee-benefit-plan costs is (are) correct?
I. The use of probationary periods tends to reduce
adverse selection.
II. Cost savings that result from contributory plans
may be offset by increased adverse selection and in-
creased administrative costs.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
2. Which of the following techniques focuses more on C. benefit limitations
transferring costs to employees than on cost contain-
ment?
A. competitive bidding
B. wellness program
C. benefit limitations
D. alternative funding
3. Issues that must be addressed when outsourcing ben- C. Both I and II
efit administration include which of the following?
I. Confidentiality of data
II. Vendor responsibility for systems upgrades
A. I only
B. II only
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C. Both I and II
D. Neither I nor II
4. Which of the following is not one of the four primary A. to encourage the limit-
objectives of an effective program for communicating ed use of benefits
benefit plans to employees?
A. to encourage the limited use of benefits
B. to provide a high level of understanding concerning
available benefits
C. to create an awareness of and appreciation for the
way in which current benefits improve the financial
security of employees
D. to comply with legal requirements
5. (T/F) Worker's compensation plans provide complete True
medical care for work-connected injuries with no wait-
ing period.
6. (T/F) The cost of state Worker's Compensation plans True
are placed completely on employers
7. (T/F) The cost of state Worker's compensation plans True
are experience rated and vary according to the risks of
the various occupations of the employees, the actual
experience of the employer and, to some extent, by
the size of the firm's work force.
8. (T/F) Most salary continuation plans require an em- True
ployee to satisfy a short (1-3 month) probationary pe-
riod before becoming eligible for benefits.
9.
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(T/F) Most salary continuation plans are designed to False; usually 100% and
provide benefits equal to no more than 50 percent of can be reduced after 1 pe-
an employee's regular pay. riod of full pay
10. (T/F) A person is more likely to be disabled for at least True
90 days before age 65 than to die.
11. (T/F) The primary reason for coordinating group dis- True
ability income benefits with other sources of disability
income benefits is that the lack of coordination can
lead to such a generous level of benefits that absences
from work because of disability might either be falsi-
fied or unnecessarily prolonged.
12. (T/F) Salary continuation plans usually replace 100 True
percent of salary at least in the short term.
13. (T/F) A majority of long-term disability plans use a dual True
definition of disability that is more liberal at first and
becomes more restrictive after 24 to 36 months.
14. (T/F) Short-term disability income contracts most of- False
ten provide coverage for partial disabilities.
15. (T/F) In most short-term disability contracts, there is True; and 1-7 days for ill-
no waiting period for disabilities resulting from acci- ness
dents.
16. (T/F) Short-term plans usually have a benefit reduction False (Short-term plans
for older employees. do not usually have a ben-
efit reduction for older
employees since the dura-
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tion of the
benefit is limited.)
17. (T/F) Short-term disability plans are often integrated False (If only nonoccupa-
with other disability income benefits. tional injuries are covered,
there is no need for inte-
gration with Worker's
Compensation Benefits)
18. (T/F) Employer contributions to disability income True
plans are fully deductible as an ordinary and neces-
sary business expense as long as the overall compen-
sation of the employee is reasonable.
19. (T/F) Employer contributions for disability income in- True (However, benefit
surance do not result in taxable income to an employ- may be taxable, particu-
ee. larly if they are funded
with employer contribu-
tions.)
20. (T/F) Employers are less likely to provide disability cov- True
erage than either life insurance or medical expense
benefits.
21. (T/F) Premiums for salary continuation plans (sick False; uninsured by defin-
leave) are usually paid by the employer. ition
22. (T/F) Usually sick leave plans are uninsured by defini- True
tion.
23. (T/F) In primary integration, the LTD (long-term dis- True
ability) benefit is reduced only by the amount the dis-
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1. Which of the following statements about controlling C. Both I and II
employee-benefit-plan costs is (are) correct?
I. The use of probationary periods tends to reduce
adverse selection.
II. Cost savings that result from contributory plans
may be offset by increased adverse selection and in-
creased administrative costs.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
2. Which of the following techniques focuses more on C. benefit limitations
transferring costs to employees than on cost contain-
ment?
A. competitive bidding
B. wellness program
C. benefit limitations
D. alternative funding
3. Issues that must be addressed when outsourcing ben- C. Both I and II
efit administration include which of the following?
I. Confidentiality of data
II. Vendor responsibility for systems upgrades
A. I only
B. II only
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C. Both I and II
D. Neither I nor II
4. Which of the following is not one of the four primary A. to encourage the limit-
objectives of an effective program for communicating ed use of benefits
benefit plans to employees?
A. to encourage the limited use of benefits
B. to provide a high level of understanding concerning
available benefits
C. to create an awareness of and appreciation for the
way in which current benefits improve the financial
security of employees
D. to comply with legal requirements
5. (T/F) Worker's compensation plans provide complete True
medical care for work-connected injuries with no wait-
ing period.
6. (T/F) The cost of state Worker's Compensation plans True
are placed completely on employers
7. (T/F) The cost of state Worker's compensation plans True
are experience rated and vary according to the risks of
the various occupations of the employees, the actual
experience of the employer and, to some extent, by
the size of the firm's work force.
8. (T/F) Most salary continuation plans require an em- True
ployee to satisfy a short (1-3 month) probationary pe-
riod before becoming eligible for benefits.
9.
, HURM 4640 Exam 2
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(T/F) Most salary continuation plans are designed to False; usually 100% and
provide benefits equal to no more than 50 percent of can be reduced after 1 pe-
an employee's regular pay. riod of full pay
10. (T/F) A person is more likely to be disabled for at least True
90 days before age 65 than to die.
11. (T/F) The primary reason for coordinating group dis- True
ability income benefits with other sources of disability
income benefits is that the lack of coordination can
lead to such a generous level of benefits that absences
from work because of disability might either be falsi-
fied or unnecessarily prolonged.
12. (T/F) Salary continuation plans usually replace 100 True
percent of salary at least in the short term.
13. (T/F) A majority of long-term disability plans use a dual True
definition of disability that is more liberal at first and
becomes more restrictive after 24 to 36 months.
14. (T/F) Short-term disability income contracts most of- False
ten provide coverage for partial disabilities.
15. (T/F) In most short-term disability contracts, there is True; and 1-7 days for ill-
no waiting period for disabilities resulting from acci- ness
dents.
16. (T/F) Short-term plans usually have a benefit reduction False (Short-term plans
for older employees. do not usually have a ben-
efit reduction for older
employees since the dura-
, HURM 4640 Exam 2
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tion of the
benefit is limited.)
17. (T/F) Short-term disability plans are often integrated False (If only nonoccupa-
with other disability income benefits. tional injuries are covered,
there is no need for inte-
gration with Worker's
Compensation Benefits)
18. (T/F) Employer contributions to disability income True
plans are fully deductible as an ordinary and neces-
sary business expense as long as the overall compen-
sation of the employee is reasonable.
19. (T/F) Employer contributions for disability income in- True (However, benefit
surance do not result in taxable income to an employ- may be taxable, particu-
ee. larly if they are funded
with employer contribu-
tions.)
20. (T/F) Employers are less likely to provide disability cov- True
erage than either life insurance or medical expense
benefits.
21. (T/F) Premiums for salary continuation plans (sick False; uninsured by defin-
leave) are usually paid by the employer. ition
22. (T/F) Usually sick leave plans are uninsured by defini- True
tion.
23. (T/F) In primary integration, the LTD (long-term dis- True
ability) benefit is reduced only by the amount the dis-
