Chapter 12

Question 1

The parts of the total compensation package, other than pay for time worked,
provided to employees in whole or in part by employer payments (e.g., life insurance, pension, workers’ compensation, vacation)

Answer 1

employee benefits

Question 2

A form of deferred compensation.
Usually have four common
characteristics: They (1) involve deferred payments to a former employee for past services rendered; (2) specify a normal retirement age, (3) specify a formula for calculating benefits, and (4) provide for integration with social security benefits.

Answer 2

pension plans

Question 3

Government regulations
that aim at maintaining low inflation and low levels of unemployment. They frequently focus on “cost-push” inflation, limiting the size of pay raises and the rate
of increases in prices charged for goods and services. Used for limited time periods only.

Answer 3

wage and price controls

Question 4

employee benefits mandated by the state government

Answer 4

workers compensation

Question 5

employee benefits mandated by the federal government

Answer 5

unemployment insurance and social security

Question 6

For employers who choose to have a retirement plan, this act sets some formidable rules that must be
followed to be in compliance.

Answer 6

employee retirement income security act

Question 7

is a savings plan in which employees are allowed to defer pretax income

Answer 7

401k

Question 8

Medical care package where the employer finances the cost up to a dollar maximum and the employees search for options that best fit their specific needs.

Answer 8

consumer driven health care

Question 9

A nontraditional health-care delivery system. Offer comprehensive benefits and outpatient services, as well as hospital coverage, for a fixed monthly prepaid fee.

Answer 9

health maintenance organizations

Question 10

A benefit plan in which employees have a choice as to the benefits they receive within some dollar limit. Usually a common core benefit package is required (e.g., specific minimum levels of health, disability, retirement, and death benefits) plus elective programs from which the employee may select a set dollar amount. Additional coverage may be available through employee contributions.

Answer 10

cafeteria style plan

Question 11

Employee benefits, from information to
applications, posted on company intranet by employer, which allows employee access 24/7 and employer to update easily.

Answer 11

e-benefits

Question 12

Procedure that begins when
an employee asserts that a specific event (e.g., disablement, hospitalization, unemployment) has occurred and demands that the employer fulfill a promise for payment

Answer 12

claims processing

Question 13

Period during which new employees are excluded from benefits coverage, usually until some term of employment (e.g., 3 months) is completed.

Answer 13

probationary periods

Question 14

An attempt made by organizations
to contain benefit costs, such as imposing deductibles and coinsurance on health benefits or replacing defined benefit pension plans with defined contribution plans.

Answer 14

cost containment

Question 15

Limit of disability income payments to some maximum percentage of income and limit of medical/dental coverage for specific procedures to a certain fixed amount

Answer 15

benefit limitations

Question 16

requires that employees pay a fixed or
percentage amount for coverage.

Answer 16

copay

Question 17

controlling costs through policies such as seeking competitive bids for program delivery

Answer 17

administrative cost containment

Question 18

The practice of hiring outside vendors
to perform functions that do not directly contribute to business objectives and in which the organization does not have a comparative advantage.

Answer 18

outsourcing

Question 19

Employees cost-saving tool by which
the employee pays the first x number of dollars when a benefit is used (e.g., hospitalization). The employer pays subsequent costs up to some predetermined
maximum.

Answer 19

deductibles

Question 20

Benefit option whereby employees
share in the cost of a benefit provided to them.

Answer 20

coinsurance

Question 21

corresponding to wage concessions, some employers are negotiating with employees to eliminate employer contributions or reduce them to selected options

Answer 21

benefit cutbacks

Question 22

A benefit option or package in which the employer negotiates a dollar maximum payout. Any change in benefit costs over
time reduces the amount of coverage unless new dollar limits are negotiated.

Answer 22

defined contribution plans

Question 23

A benefit option or package in
which the employer agrees to give the specified benefit without regard to cost maximum. Opposite of defined contribution plan.

Answer 23

defined benefit plans

Question 24

In families in which both spouses
work, the coverage of specific claims from each spouse’s employment benefit package. Employers cut costs by specifying payment limitations under such conditions.

Answer 24

dual coverage

Question 25

A maximum payout for specific
benefit claims (e.g., limiting liability for extended hospital stays to $150,000)

Answer 25

benefit ceiling