Final Exam Review

Question 1

Patient Protection and Affordable Care Act (PPACA)

Answer 1

• also known as “ACA” and “Obamacare”
• federal law that addresses many aspects of health care and health insurance
• promotes private health insurance plans with subsidies and the creation of an online marketplace
• extends Medicaid coverage and eliminates pre-existing condition exclusions from health plans

Question 2

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Answer 2

act requiring that employers who have group health insurance plans and at least 20 employees offer continuation coverage when certain qualifying events occur that would other cause the loss of health insurance

Question 3

COBRA Qualifying Events

Answer 3

Continue coverage for up to 18 months
- voluntary or involuntary termination of employment for reasons other than “gross misconduct”
- reduced hours of employment

Continue coverage up to 36 months
- divorce or legal separation
- death of an employee
- loss of dependent child status under the terms of the health insurance plan
- covered employee becoming entitled to Medicare

Question 4

PPACA - Individual Mandate

Answer 4

• individuals must obtain minimum essential coverage or else pay a monetary penalty
• the “penalty” is now $0

Question 5

PPACA - Employer Mandate

Answer 5

• employers with greater than 50 full-time employees must offer affordable coverage meeting minimum requirements to those employees
• full-time is 30 hours or more per week (for the purposes of PPACA)

Question 6

Employee Retirement Income Security Act (ERISA)

Answer 6

the principle federal law regulating employee benefit plans, including pensions plans (to provide retirement income) and “welfare plans” (cover all other benefits, including health care insurance, childcare subsidies, pre-paid legal services, etc)

ERISA does not require employers to provide any pension plan at all!

Question 7

ERISA - Fiduciary Duty

Answer 7

• anyone who exercises discretion or control over benefit plans is a fiduciary
• fiduciaries must manage such assets solely for the benefit of the beneficiaries
• must monitor performance, diversify plan assets, and refrain from transactions for pension plans

Question 8

Pension Plans

Answer 8

benefit plans designed to provide retirement income to employees or to otherwise defer income until after employment ends

Question 9

Types of Pension Plans

Answer 9

Defined benefit - generally guarantees a certain benefit each month in retirement calculated according to a formula (Employer assumes risk)

Defined contribution - generally grants a contribution among employment, to be invested by the employee (Employee assumes risk)

Question 10

Summary Plan Description (SPDs)

Answer 10

important documents required by ERISA that accurately inform employees about their rights and obligations under employee benefit plans

Question 11

Abuse of Discretion

Answer 11

a standard used to determine if benefit plan administrators violated ERISA by making decisions about eligibility for benefits in an arbitrary and capricious manner

Question 12

Provide Claims and Appeals Procedures - ERISA

Answer 12

• employers are required to provide “reasonable” claims and appeals procedures for their benefit plans
• decisions on initial claims generally must be made within 90 days. However, benefit discrimination under heath plans must be made more quickly (72 hours)

Question 13

Appeals Procedure - ERISA

Answer 13

reasonable procedures are required under ERISA for contesting adverse benefit determinations

These must be exhausted before lawsuits can be filed

Question 14

Vesting

Answer 14

the acquiring of a nonforfeitable right to receive a pension by an employee covered under a pension plan, after a specified number of years of service

Question 15

Anti-cutback rule

Answer 15

Under ERISA, employers are prohibited from making changes to pension plans that reduce benefits already accrued by employees

Question 16

Pension Benefit Guaranty Corporation (PBGC)

Answer 16

a federal agency that intervenes when employers with defined benefit pension plans are unable to meet their obligations to retirees

Question 17

Workers Compensation

Answer 17

program that covers medical expenses and partially replaces lost income for workers who suffer from injuries and illness arising out of and in the course of their employment

Question 18

Experience Rating

Answer 18

• one of the factors used in setting the rates employers must pay to get workers compensation for their employees
• it involves charging higher rates to employers that have worse records of injuries and claims

Question 19

Contributory Negligence

Answer 19

asserts an employees own carelessness was a cause of whatever harm occurred

traditional common law defense to negligence claims

Question 20

Fellow Servant Rule

Answer 20

employers are not liable for the negligent acts of co-workers

traditional common law defense to negligence claims

Question 21

Assumption Risk

Answer 21

risks knowingly incurred cannot be the basis for negligence liability

traditional common law defense to negligence claims

Question 22

In the course of employment

Answer 22

one of the main requirements in order for injuries to be covered by workers comp

-it refers to the time, place, and setting in which the injury occurs

Question 23

Arising out of employment

Answer 23

one of the fundamental requirements for receiving worker’s compensation benefits

-it refers to the underlying causation of an injury or illness

Question 24

Peculiar risk

Answer 24

if injuries or illnesses arise out of employment only if they are more common among, or even unique to, persons performing particular types of work

Question 25

Increased Risk

Answer 25

injury or illness that arose our of employment it holds that an employee’s work or work environment must have measurably increased their chances of being harmed over that of the general public

Question 26

Actual Risk

Answer 26

injuries or illnesses to be compensable under Workers’ Compensation so long as the harm that occurred is a risk of the job, even though the general public might be similarly at risk

Question 27

Positional risk

Answer 27

the harm would not have occurred but for the fact that an employee’s job placed them in the position in which they were harmed

Question 28

Unemployment insurance (compensation)

Answer 28

social insurance program that partially replaces lost earning during periods of involuntary unemployment for people who are willing and able to seek and accept other suitable employment

Question 29

Involuntary Employment

Answer 29

to be eligible for unemployment comp, employees must be out of work for reasons not of their own doing, such as voluntary resignation or their own serious misconduct

Question 30

Base period

Answer 30

period considered for establishing eligibility for unemployment insurance (comp), usually the first four of the five quarters preceding the claim of benefits

Question 31

Availability for work

Answer 31

one of the basic eligibility requirements for unemployment benefits, an employee must be willing to seek and accept “suitable employment”

Question 32

Suitable Employment

Answer 32

Work that does not endanger the health or safety of the employee, for which the individual has the requisite training and experience, and that is within a reasonable distance of the individual’s residence or last place of employment. Willingness to accept such employment is one of the conditions of eligibility for unemployment compensation.

-Prior training and experience
-Distance from residence
-Length of unemployment
-Previous earnings

Question 33

Continuing eligibility

Answer 33

a claimant must be able and available for work and must be actively seeking work

Question 34

Willful misconduct

Answer 34

• A disregard of the standards of behavior that an employer rightfully can expect from its employees, even if it is not a direct violation of policy
• A deliberate violation of the employer’s rules
• Does not include ordinary negligence