1. Suppose an employee with a chronic medical condition were allowed to choose a higher amount of group insurance benefits. This situation an example of
A. preexisting condition.
B. determination of eligibility.
C. contributory selection.
D. adverse selection.
2. Suppose an employer has a pressing need to attract new engineers. As an incentive, the company increases its amount of life insurance for its engineers from $80,000 to $120,000, while coverage for all other company positions remains the same. This company's life insurance benefits are most likely based on a/an _______ schedule.
A. position
B. earnings
C. flat-benefit
D. combination of benefits
3. Under Section 79 of the Internal Revenue Code, if a 60-year-old employee is provided with $180,000 of group term insurance, what would be the employee's annual taxable income on this insurance?
A. $85.80
B. $1,029.60
C. $1,425.60
D. $66.00
4. Which one of the following statements is correct about beneficiary designation of death benefits under group insurance?
A. Some insurance contracts require that a change in a designated beneficiary be specified to the insurance company in writing.
B. Without exception, an employee has the right to name his or her beneficiary.
C. Some states prohibit naming the employer as the beneficiary.
D. If an employee has no designated living beneficiary, death benefits are paid to the state.
5. The short-term disability benefits from an employer are combined with _______ to make sure that an employee doesn't receive benefits that are more than his or her salary.
A. workers' compensation payments
B. earnings from employment
C. sick-leave plans
D. pension-plan payments
6. Sarah Mason has group life insurance through her employer. One option Sarah has at retirement is to
A. increase the amount of the pure insurance.
B. transfer the balance in the group life insurance account into an IRA.
C. transfer the life insurance benefit to a working spouse.
D. keep the group life insurance the same as it was before retirement.
7. Under what condition would it be a good idea for an employer to offer supplemental long-term disability
income insurance at the employee's expense?
A. The job that the majority of the employees do is hazardous.
B. The employer would like to attract and retain employees.
C. The employer would like the employees to pay for more of their own benefits.
D. The employees have requested the additional insurance on the employee benefit survey.
8. Which one of the following benefits may be included by an employer as extra coverage in accidental
death and dismemberment insurance?
A. The employer is given a temporary employee until the disabled employee can return.
B. Funeral costs are paid.
C. The beneficiary of the disabled employee is given transportation to the employee's rehabilitation facility.
D. The deceased employee's body is flown home.
9. According to the Americans with Disabilities Act (ADA), what is an example of a reasonable
accommodation that could be made by an employer?
A. Giving all employees sign language classes so that they may communicate with the deaf
B. Installing Braille on all signs so that future employees may be able to find their way around the building
C. Installing elevators at each stairwell so that future disabled employees may have access to different floors
D. Providing a magnifying device for the computer screen of a visually impaired employee
10. Which one of the following choices is a reason that an employer would provide group universal life insurance to its employees?
A. This type of insurance is the main incentive in attracting and retaining the best employees.
B. The life insurance can still be available at a group rate.
C. The coverage is versatile enough to meet the needs of each employee.
D. Employees can continue to have insurance coverage after retirement.
11. Under Section 79 of the Internal Revenue Code, if a 45-year-old employee is provided with $100,000 of group term insurance, what would be the employee's monthly taxable income on this insurance?
A. $15.00
B. $43.00
C. $7.50
D. $75.00
12. An employer with fewer than 15 employees might be required to offer medical insurance benefits to a pregnant employee because the
A. employer offers medical insurance benefits to nonpregnant employees.
B. employer provides sick leave for employees.
C. state in which the employer operates requires it.
13. Which one of the following statements is correct about paid time off (PTO) programs?
A. An employee is assured a specified bank of leave days, for any purpose, at full pay.
B. An employee is assured a specified bank of leave days, for any purpose, at a slightly reduced level of pay.
C. A PTO program encourages employees to take time off for specified sick-leave days, regardless of whether they're sick or not.
D. PTO programs haven't impacted the average number of sick-leave days that employees are likely to take.
14. Bob, a 10-year employee of Company X, is in the Army Reserve. Bob's Reserve unit was called to serve overseas for three months. Company X told Bob that his position would be held for him until he returned. Bob was permanently injured, losing an arm and a foot while fighting overseas. What will happen when he returns?
A. Bob would receive 100 percent of his pay after his 30 days of sick leave were used.
B. Bob would receive no disability payments.
C. Bob would receive 100 percent of his pay from Company X for the first six months of his disability and 60 percent thereafter.
D. Bob would receive 100 percent of his pay from Company X as soon as he returned to the United States.
15. Regarding underwriting considerations, what information may an employer have to provide to an insurance company to show that the company is insurable?
A. The employer's financial records
B. References from customers
C. The firm's total number of employees
D. The employees' health histories
16. If an employer has offices in New York, New Jersey, and Los Angeles, how would that employer determine which state regulations govern the group insurance contract?
A. Each office would abide by the requirements of its own state.
B. The state with the most stringent regulations would govern the contract.
C. The state with the most employees would govern the contract.
D. The state in which the insurance contract was delivered would govern the contract.
17. Suppose an employee who earns $2,000 per month is entitled to a disability income benefit of 60 percent and a monthly disability benefit of $500 under Social Security. He or she also receives a monthly family benefit of $450 and has a 70 percent benefit that's applicable to the total benefits payable from the long term plan. Which one of the following approaches would give the employee the highest benefit payment?
A. Full-integration
B. Full-percentage
C. Dual-integration
D. Dual-percentage
18. Suppose an employer makes a job offer to a potential employee. However, the employer then discovers that the potential new hire has a level of hearing loss that would interfere with his job performance. Even though the employer feels the job candidate is the best qualified among current applicants, he withdraws the job offer because it would cost the company a significant amount of money to accommodate his disability. The company is supported in its decision by the _______ Act.
A. Americans with Disabilities
B. Mental Health Parity
C. Social Security
D. Health Insurance Portability and Accountability
19. A disability plan with a COLA would most likely help prevent which one of the following scenarios from happening?
A. An employee can't get a reduction in the cost of prescription medication.
B. An employee doesn't have medical insurance to cover the cost of hospitalization.
C. An employee can't afford the cost of groceries after retirement.
20. What is the term used to describe a situation in which an employee maintains his or her group coverage after employment is terminated?
A. Portability
B. Comity
C. Persistency
D. Underwriting
