UGA RMIN 4000 Test 4 Questions and Answers (Graded A+)
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Course
UGA RMIN 4000
Institution
UGA RMIN 4000
5 types of employee benefits - ANSWER-1. Medical expenses
2. Loss of income due to disability
3. Loss of income due to death
4. Loss of income due to retirement
5. Loss of income due to unemployment
Medical expenses - ANSWER--health insurance
-FSAS/HSAS (pre-tax health savings account)
-wo...
UGA RMIN 4000 Test 4 Questions and Answers (Graded A+)
5 types of employee benefits - ANSWER-1. Medical expenses
2. Loss of income due to disability
3. Loss of income due to death
4. Loss of income due to retirement
5. Loss of income due to unemployment
Medical expenses - ANSWER--health insurance
-FSAS/HSAS (pre-tax health savings account)
-workers comp.
Loss of income due to disability - ANSWER--occupational disability: workers comp/lost wages
-non-occupational disability: --sick leave/paid time off (PTO)- 1-2 weeks
--short term disability (STD): about 1 week to 3 months: about 60% wages
--long term disability (LTD): > 3 months: about 60% wages
Loss of income due to death - ANSWER--life insurance (UGA pays 25k for life ins.)
-survivor benefits under retirement plans: 401(k)- inheritance: continue pensions payments for surviving spouse
-workers comp. death benefit
-social security death benefits
Loss of income due to retirement - ANSWER--defined benefit (DB) plan : pension
-defined contribution (DC) plan: 401(k) for-profit firm: 403(b) non-profit firm
-social security retirement benefits
Loss of income due to unemployment - ANSWER--unemployment insurance
-severance
Which benefits are firms required to offer? - ANSWER--"social benefits": workers comp.,
unemployment ins., OASDI
-health ins. per the ACA's "employer mandate"
Why do firms offer employee benefits? 6 reasons - ANSWER-1. taking advantage of "group insurance" -better rates -less rigorous underwriting
2. income/pay roll tax advantages -employees: many benefits are not taxable income -
employers: payroll tax (FICA) calculated on cash wages
3. Required by law
4. attract and return capable employees 5. enhance productivity of employees -childcare/take dog to work: reduce interruptions, coffee: enhance energy, profit sharing programs: align incentives, feel valued: more likely to be productive
6. Retire employees- structure retirement plan to encourage employees to retire, EX. Philly police pension: first 20 yrs 2.2% of annual salary toward pension, after 20 yrs 2% of annual salary toward pension
Benefit financing (who pays?) - ANSWER-1. non-contributing: Employer pays entire cost, employee pays $0: EX. UGA pays $11.48/mo for $25,000 life ins., Mark pays $0
2. contributory: employee and employer share cost: optional- employers can't require employees to participate in contributory plan, -AS problem! b/c of this insurers often have "minimum participation requirement"
3. employee-pay-all: aka "voluntary benefits"
-EX. UGA's STD & LTD benefits: STD mark pays $59/mo, LTD mark pays $39/mo: UGA
pays $0
Minimum participation requirement example - ANSWER--at least 75% of employees must participate
-UGA's health ins.: Mark pays $501/mo: UGA pays $1,134/mo
Advantages of Group Insurance - ANSWER-1. can be less expensive b/c lower RC and admin
-what about E(loss)? maybe higher due to AS
2. tax benefits to employee (benefits are not taxable income)
3. employer may pay all/part of premium
4. no evidence of insurability
5. may get insurance you wouldn't otherwise get
Disadvantages of Group Insurance - ANSWER-1. inflexible of individuals
2. must be employed to get it (lose job, lose ins.)
3. not always available
4. may get ins. you wouldn't otherwise get
health insurance - ANSWER-protection against financial losses that result from medical bills due to injury and/or illness
incentives for the patient - ANSWER--health insurance lowers "user price" of HC- MH (Rand)
-less incentive to act as a traditional consumer
incentives for providers - ANSWER--payment system traditionally based on fee-for-
service (FFS) reimbursement
-for every service, separate fee paid
-financial incentive: max. # services
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