Question : 81. Benefit plans that permit employees to choose the types and : 1250921

81. Benefit plans that permit employees to choose the types and amounts of benefits they want are called 
A. preferred provider plans.
B. flexible, or cafeteria-style, benefits plans.
C. “pay or play” benefits plans.
D. flexible spending accounts.

Flexible benefit plans (flex-plans or cafeteria-style plans) permit employees to choose the types and amounts of benefits they want for themselves.

82. Drawbacks to employers of flexible benefits plans include all except which one of the following? 
A. High initial design costs
B. High administrative start-up costs
C. Higher benefits costs
D. Adverse selection costs

Employers may achieve overall cost reductions in their benefits programs through the use of flexible benefit plans.

83. Adverse selection can be controlled by all but one of the following employer actions. Name the exception. 
A. Restricting certain employees from selecting certain benefits options
B. Placing limitations on coverage amounts
C. Pricing certain benefits options higher
D. Providing a limited set of benefits package options

Employers cannot restrict certain employees from choosing certain benefits.

84. Which of the following statements about flexible spending accounts is not true? 
A. They can only be used for dependent-care expenses
B. They permit pretax employee contributions
C. They are regulated under the federal tax code
D. Funds must be used by the plan’s yearend or they revert to the employer

They can be used for employee as well as dependent-care expenses.

85. The major advantage of a flexible spending account is 
A. that dependent care expenses are covered through the same account.
B. the increases in employees’ take-home pay.
C. that unused funds are reverted back to the employee.
D. that the account covers unpredictable expenses.

The major advantage of such plans is the increase in take-home pay that results from pretax payment of health and dependent care expenses.

86. To be a qualified benefits plan, a benefit cannot discriminate in favor of 
A. part-time employees.
B. older employees.
C. highly compensated employees.
D. long-term employees.

The tax benefits of qualified benefits plans should not go disproportionately to the wealthy.

87. In the 1978 Manhart ruling, the Supreme Court declared it illegal for employers to require 
A. physical examinations as a precondition for employment offers.
B. employees to accept health insurance coverage.
C. employees to retire at age 65.
D. women to contribute more than men to a defined benefit plan.

In the 1978 Manhart ruling, the Supreme Court declared it illegal for employers to require women to contribute more to a defined benefit plan than men.

88. Early retirement incentive programs must meet all but one of the following legal requirements. Name the exception. 
A. Employees cannot be coerced to accepting the incentive
B. Employees must be given a written statement describing retiree benefits
C. Employees must be provided with accurate information regarding options
D. Employees must be given adequate time to make a decision

Early retirement incentive programs need to meet the following standards to avoid legal liability: (1) the employee is not coerced to accept the incentive and retire, (2) accurate information is provided regarding options, and (3) the employee is given adequate time (is not pressured) to make a decision.

89. The law that specifies that employees with disabilities must have “equal access to whatever health insurance coverage the employer provides other employees” is 
A. the ADA.
B. the ADEA.
C. the FLSA.
D. ERISA.

The ADA specifies that employees with disabilities must have “equal access to whatever health insurance coverage the employer provides other employees.”

90. Which type of retiree benefits plan is excluded from the rules issued under Financial Accounting Statement 106? 
A. Health care
B. Pensions
C. Life insurance
D. Stock ownership

This rule requires that any benefits excluding pensions provided after retirement can no longer be funded on a pay-as-you-go basis.

91. Financial Accounting Statement 106 requires that any benefits provided after retirement must be paid on a(n) _____ basis. 
A. pay-as-you-go
B. accrual
C. annual
D. subtraction

Any benefits (excluding pensions) provided after retirement can no longer be funded on a pay-as-you-go basis. Rather, they must be paid on an accrual basis, and companies must enter these future cost obligations on their financial statements.