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| Question | Answer |
| When are employers of farm worker subject to FUTA? | 1. They paid $20,000 or more to the workers during a calendar quarter in the previous year or the current year to date 2. If 10 or more farm workers were employed during some part of a day (not necessarily at the same time) during any 20 or more different weeks during the previous year or the current year to date. |
| When are employers of household workers subject to FUTA? | If they pay $1,000 or more per calendar quarter to those who work in private homes, college clubs, or chapters of college sororities and fraternities. |
| Who determines UI eligibility requirements? | States |
| How many weeks is unemployment compensation paid for? | Maximum of 26 weeks |
| Who can extend the period of unemployment compensation payment? | The president. Congress will have to submit a bill to the president. |
| In what situation can the unemployment compensation payment period be extended? | When the unemployment rate is very high |
| How can employers reducing Unemployment Tax Rates? | Carefully man- aging their employment processes: - an effective hiring process - An effective performance-management program) - Maintaining accurate records of the reasons for termination for cause - HR department must be diligent in contesting ineligible unemployment claims |
| Which president signed the FMLA? | Bill Clinton |
| What is NDAA? | National Defense Authorization Act |
| What are 3 benefits under FMLA? | 1. 12 weeks of unpaid leave within a 12-month period (26 months for military caregiver leave) 2. Continuation of health benefits 3. Reinstatement to the same position or an equivalent position at the end of the leave |
| Are employers allowed to retroactively designated leave as FMLA qualified? | Yes as long as sufficient notice is given to the employee and the retroactive designation doesn’t cause harm or injury to the employee |
| What would happen if the employers fail to appropriately designate that leave is FMLA-qualified at the time of the employee’s request? | The employee may be entitled to any loss of compensation and benefits caused by the employer’s failure. This can include monetary damages, reinstatement, promotion, or other suitable relief. |
| What would happen if an employer neglects to designate leave as FMLA? | Employees who are harmed may be entitled to restitution for their losses. |
| Does the DOL allow employers and employees who mutually agree on a resolution to settle past claims between them, avoiding costly and unnecessary litigation? | Yes, after 2008 amendment |
| Are employees allowed to waive their future FMLA rights? (Waiver of Righs) | No, the DOL does not permit this. |
| Until when can the employee's job restoration right continue? | Until the employee is released to full duty or until the end of the 12-month FMLA leave year. |
| What are recordkeeping requirements under the FMLA? | - Must be kept in accordance with recordkeeping standards established by the FLSA and may be maintained in employee personnel files - Leave records must be maintained for no less than 3 years |
| Which employers are covered under FMLA? | - All public agencies and schools, regardless of their size, and to private employers with 50 or more employees working within a 75-mile radius - 20 nonconsecutive weeks in the current and preceding calendar year |
| When are employers NOT subject to FMLA? | When the number of employees on the payroll is less than 50 for 20 nonconsecutive weeks in the current and preceding calendar year. E.g. if employers with 50 employees on the payroll for the first 20 weeks in 2011 reduce the number of employees for the rest of 2011 and remain at the reduced level throughout 2012, they must continue to comply with FMLA through the end of 2012. |
| What does Worksites Within a 75-Mile Radius mean? | - The number of employees at each worksite is based on the employees who report to work at that site or, the location from which their work is assigned. - A worksite may also consist of facilities that aren’t directly connected if they’re in reasonable geographic proximity, used for the same purpose, and share the same staff and equipment. |
| What are employers' Notice Obligations under FMLA? | 1. Informational Notice: to inform employees of their FMLA rights (upon hire, in staff handbook, collective bargaining agreement, or other written documents); Fact Sheet #28 2. Notice in Response to Leave Request: to provide eligibility, rights, and responsibilities for FMLA leave, and designate the leave as FMLA in response to an FMLA leave request (5 business days to respond; forms WH-381 and WH-382. |
| In case employers neglect to inform employees they are ineligible for FMLA leave prior to the date the leave begins, are the employees considered eligible to take the leave? | Yes. And the employer may not deny it at that point. |
| Who are eligible for FMLA? | - Work for an employer who is subject to FMLA - Have been employed by the employer for at least 12 months, which need not be consecutive - Worked at least 1,250 hours during the 12 months immediately preceding the leave |
| Who are considered key employees under FMLA? | - A salaried employee among the highest-paid 10 percent of employees at the worksite as defined previously. - The determination of which employees are the highest paid is calculated by dividing the employee’s year-to-date earnings (base salary, premium pay, incentive pay, and bonuses) and dividing the total earnings by the number of weeks worked. |
| Which employees may be denied reinstatement to the position they held or an equivalent position under FMLA? | Key employees if the employer demon- strates that the reinstatement would cause “substantial and grievous economic injury” to its operations. |
| What is employee notice requirement under FMLA? | - Forseeable leave: 30 days prior to the anticipated start date of leaves - Unforeseeable leave: employees to provide notice in accordance with the usual and customary practice for calling in an absence, unless unusual circumstances prevent the employee from doing so. |
| Event qualifying for FMLA | - Birth of a child and caring for the infant (the leave must be completed within 12 months of the child’s birth.) - Placement of an adopted or foster child with the employee (the leave must be completed within 12 months of the child’s placement.) - To provide care for the employee’s spouse, son, daughter, or parent with a serious health condition. - When an employee is unable to perform the functions of the job because of a seri- ous health condition. - To provide care for a covered service member with a serious injury or illness sustained while on active duty. In this situation, family members are eligible to take up to 26 weeks of leave in a 12-month period. - To provide leave for qualifying exigencies for families of members of the National Guard and Reserves. |
| What are Qualifying exigencies for families of members of the National Guard and Reserves under FMLA? | 1. Short-notice deployments 2. Military events and related activities 3. Childcare and school activities 4. Financial and legal arrangements 5. Counseling 6. Rest and recuperation 7. Post-deployment activities 8. Leave for other related purposes when agreed to by the employee and employer |
| What is the purpose of Medical Certification? | To verify requests for any qualified leave as long as the employee is notified of the requirements |
| 4 forms provided by DOL | 1. WH-380-E (for employee serious health condition) 2. WH-380-F (for family member serious health condition) 3. WH-384 (for exigency leave for military families) 4. WH-385 (for serious injury or illness to covered service member) |
| When can employers request an initial medical certification? | Within 5 business days of the employee leave request |
| How many days do employees have to submit the certification to employers? | At least 15 calendar days for the employee to submit the certification - but may allow more time. |
| If employers require additional information of employee's medical certification, how many days do employees have to submit the additional information? | 7 days |
| 3 Types of FMLA Leave | 1. Continuous FMLA leave (the employee is absent from work for an extended period of time) 2. A reduced FMLA leave schedule (employee’s regular work schedule is reduced for a period of time) 3. An intermittent FMLA leave (employee is absent from work for multiple periods of time because of a single illness or injury) |
| What is FMLA year? | the 12-month period during which employees may use the 12 weeks of leave |
| 4 methods to calculate FMLA year | 1. The calendar year 2. Any fixed 12-month period (such as the fiscal year or anniversary date) 3. The 12-month period beginning when a FMLA leave begins 4. A rolling 12-month period that is measured back from the date the FMLA leave is used by an employee |
| How many days do employee need to let employers know if they need to use intermittent leave? | At least 2 days’ notice of the need to use the intermittent leave whenever possible. |
| What would happen if employees who neither provide the fitness-for-duty certificate nor request an extension of the leave? | They are no longer entitled to reinstatement. |
| How do employers fund workers' compensation obligations? | - Purchase coverage through private insurance companies or state-sponsored insurance funds - The premiums for workers’ compensation coverage are based on a percentage of the employer’s payroll in various job categories. The percentages are different and depend on previous claim activity in each category. |
| What are non-subscriber plans? | Companies may self-fund workers’ compensation programs, meaning that they pay the total costs of any injuries or illnesses when they occur instead of paying insurance premiums. |
| What is a Defined Benefit plan? | A traditional pension plan in which the employer provides a specific benefit upon retirement. The funds in these plans aren’t accounted for individually. |
| What is A defined-contribution plan? | An individual plan in which the amount of funds contributed is known, but the amount of the benefit that is eventually paid out isn’t known because it depends on the investment returns that are earned. The funds are accounted for in individual accounts for each participant. |
| What is a nonforfeitable claim? | One that exists because of a participant’s service. Nonforfeitable claims are unconditional and legally enforceable. |
| Who is a Party in Interest? | A party in interest may be a fiduciary, a person or an entity providing services to the plan, an employer or employee organization, a person who owns 50% or more of the business, relatives of any of the above, or corporations that are involved with the plan in any of these functions. |
| Who is a Plan Administrator? | The person designated by the plan sponsor to manage the plan. |
| Who is a Plan Sponsor? | The entity that establishes the plan. This may be a single employer, a labor organization, or, in the case of a multiemployer plan, a group representing the parties that established the plan. |
| What is Qualified Plan? | A qualified plan meets ERISA requirements and provides tax advantages for both employees and employers. To be classified as a qualified plan, a pension plan can’t provide additional benefits for officers, shareholders, executives, supervisors, or other highly compensated employees—all employees in the organization must be eligible for all plan benefits. |
| What is a Nonqualified Plan? | A nonqualified retirement plan is one in which the benefits exceed the limitations of qualified plans or don’t meet other IRS requirements for favorable tax treatment. These plans aren’t required to include all employees, so they may provide additional benefits to officers, shareholders, executives, supervisors, or other highly compensated employees. |
| 4 main categories of voluntary benefits | 1. Deferred compensation 2. Health and welfare benefits 3. Work-life balance benefits 4. Other benefits |
| Federal Laws Regulating Voluntary Benefits | 1. Employee Retirement Income Security Act of 1974 (ERISA) 2. |
| What is ERISA? | Created by Congress to set standards for private pensions and some group welfare programs such as medical and life insurance |
| What are 3 types of reports are organizations required to file? | 1. Summary Plan Description (SPD) 2. Annual Reports 3. Participant Benefit Rights Reports |
| What information is covered in a summary plan description (SPD)? | Provides plan participants with information about the provisions, policies, and rules established by the plan and advises them on actions they can take in using the plan |
| If there are changes in the SPD, how often must the SPD be prepared and distributed to participants? | Every 5 years |
| If there is not changes, how often must the SPD be prepared and distributed to participants? | Every 10 years |
| What needs to be covered in the annual reports? | - Financial statements - Number of employees in the plan - Names and addresses of the plan fiduciaries - Any persons compensated by the plan (such as an accountant, for example) during the preceding year be disclosed, amount of compensation paid to each etc. |
| Who needs to audit the annual reports? | A CPA or other qualified public accountant |
| Who must prepare the actuarial reports? | An enrolled actuary who has been licensed jointly by the Department of the Treasury and the DOL to provide actuarial services for U.S. pension plans. |
| Who is given authority to simplify filling and reporting requirements for plans with fewer than 100 participants? | The DOL |
| How often are the plan participants entitled to receive the participant benefit rights reports? | Once per year |
| How long must ERISA records be maintained? | 6 years from the date they were due to be filed with the DOL |
| When are annual reports to be filed with the DOL? | Within 210 days of the end of the plan year |
| How many days do employers have to resubmitted rejected plans? | Within 45 days, or the DOL can retain a CPA to audit the report on behalf of the participants. |
| Can DOL bring civil actions on behalf of plan participants if necessary to resolve any issues? | Yes |
| Under ERISA, who is a participant in a benefit plan? | An employee who has met the eligibility requirements for the plan |
| Under ERISA, what are the minimum participation requirements for a benefit plan? | - 1 year of service has been completed or the employee has reached the age of 21, whichever is later - If the plan provides for 100% vesting after 2 years of service>> completion of 2 years of service or reaching age 21, whichever is later - Employees may not be excluded because they have reached a specified age. - When employees have met the minimum service and age requirements, they must become participants no later than the first day of the plan year after they meet the requirement, or 6 months after the requirements are met, whichever is earlier. |
| What is vesting? | Refers to the point at which employees own the contributions their employer has made to the pension plan, regardless of whether they remain employed with the company. |
| How many types of vetsing? | 1. Immediate 2. Delayed |
| What is immediate vesting? | Immediate vesting occurs when employees are 100%, or fully, vested as soon as they meet the eligibility requirements of the plan. |
| What is delayed vesting? | Delayed vesting occurs when participants must wait for a defined period of time prior to becoming fully vested. |
| What are 2 types of delayed vesting? | 1. Cliff Vesting 2. Graded Vesting |
| What is cliff vesting? | With cliff vesting, participants become 100% vested after a specified period of time. ERISA sets the maximum period at 5 years for qualified plans, which means participants vest nothing until they have completed the 5 years of service, after which they’re fully vested. |
| What is graded vesting aka. graduated vesting aka. gradual vesting? | Graded vesting establishes a vesting schedule that provides for partial vesting each year for a specified number of years. |
| Under ERISA, after how many year can a participant achieve full vesting under graded vesting/graduated vesting/gradual vesting? | 7 years |
| Under ERISA, after how many years can a participant achieve 20% vesting? | After 3 years. After that, 20% vesting every year until achieving full vesting after 7 years of service |
| What are qualified domestic relations orders (QDRO)? | Legal orders issued by state courts or other state agencies to require pension payments to alternate payees. An alternate payee must be a spouse, a former spouse, a child, or another dependent of a plan participant. |
| Does ERISA define funding requirements for pension plans and set standards for those who are responsible for safeguarding the funds until they’re paid to employees? | Yes |
| What is ERISA requirement for pension funding? | The funds be maintained in trust accounts separate from business operating funds. |
| Who determines how much money is required to fund the accrued obligations of the plan (for pension plan)? | An enrolled actuary |
| How often do the pension funds need to be deposited? | - Quarterly - the final contribution must be made no later than 8-1/2 months after the end of the plan year. |
| For purposes of ERISA, what is a fiduciary? | A person, a corporation, or another legal entity that holds property or assets on behalf of, or in trust for, the pension fund. |
| What is prudent person standard of care? | According to ERISA, it is a common law concept that requires all actions be undertaken with “the care, skill, prudence, and diligence ... that a prudent man acting in like capacity” would use. |
| What would happen when there are losses to the pension plan resulting from any breach of fiduciary responsibility that they commit? | They may be held liable and may be required to make restitution for the losses and be subject to legal action. |
| Does ERISA specifically prohibit transactions between pension plans and parties in interest? | Yes |
| What are criminal penalties for willful violations of ERISA? | $5,000 and $100,000 and imprisonment for up to 1 year |
| Who can bring civil actions to recover benefits or to force compliance with the law? | - Plan participants - Their beneficiaries - Fiduciaries - The DOL |
| 7 Laws Impacting Deferred Compensation | 1. Retirement Equity Act (REA) of 1984 2. Older Worker Benefit Protection Act (OWBPA) of 1990 3. Unemployment Compensation Amendments of 1992 4. Omnibus Budget Reconciliation Act (OBRA) of 1993 5. Small Business Job Protection Act of 1996 6. Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 7. Pension Protection Act (PPA) of 2006 |
| What covered under Retirement Equity Act (REA) of 1984? | 1. Lowered age limits for participation and vesting in pension plans. 2. Required written approval from a spouse if the participant didn’t want to provide survivor benefits in the plan and placed restrictions on the conditions that could be placed on survivor benefits. |
| What does Older Worker Benefit Protection Act (OWBPA) of 1990 cover? | - Prohibition on discrimination against older workers in all employee benefit plans unless any age-based reductions are justified by significant cost considerations. - Allows seniority systems as long as they don’t require involuntary terminations of employees based on their age and extends ADEA protections to all employee benefits. |
| How many days do employees age 40 have to consider the waiver agreements to waive their rights to make claim under ERISA? | 45 days |
| Under ERISA, what do employers have to provide to employees in cases of group terminations (e.g. a reduction in force or early retirement program) | - The eligibility requirements for any exit incentive programs - Any time limits for the programs - A list of the job titles and ages of employees who have been selected or who are eligible for the program. |
| What is the federal agency responsible for enforcement of the OWBPA ? | The EEOC |
| What does Unemployment Compensation Amendments of 1992 cover? | Reduction in rules for rolling over lump-sum distributions of qualified retirement plans into other plans and subjected some distributions to 20% income tax withholding. |
| What does Omnibus Budget Reconciliation Act (OBRA) of 1993 cover? | - Requires that health plans honor court-issued qualified medical child-support orders for dependent children of employees - Requires group health plans provide coverage for dependent adopted children when those children are placed for adoption in a covered employee’s home. |
| What does Small Business Job Protection Act of 1996 cover? | - Actual deferral percentage (ADP) tests for 401(k) plans to relieve the costs of administering qualified plans for small businesses - Redefinition of highly compensated employees - Detailed minimum participation requirements and changes to disclosure requirements for qualified plans. |
| What does Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 cover? | A number of changes to contribution limits, increasing many contribution limits, and allowing for catch- up contributions for employees older than 50 years of age. |
| What is the main focus of Pension Protection Act (PPA) of 2006? | To require employers to fully fund their pension plans to avoid future cash shortfalls in the plans as employees retire - Requirement for defined- contribution plans that include employer stock to provide at least three alternative invest- ment options and allow employees to divest themselves of the employer’s stock |
| What is the penalty for employers that don't comply with Pension Protection Act (PPA)? | 10% excise tax |
| What was one of the biggest changes to pension rules made by the PPA? | To allow employers to automatically enroll employees in 401(k) plans |
| What does ERISA requirements apply to? | Both deferred compensation and health and welfare benefit programs |
| What amendment did COBRA made to ERISA in 1986? | ERISA was amended to requires businesses with 20 or more employees to provide health-plan continuation coverage under certain circumstances. Employers that meet this requirement must continue benefits for those who leave the company or for their dependents when certain qualifying events occur. |
| When must employers notify employees of the availability of COBRA coverage ? | - When the employees enter the plan - Within 30 days of the occurrence of a qualifying event. |
| What are qualifying events that trigger COBRA and length of coverage? | 1. Employee death (36 months) 2. Divorce or legal separation (36) 3. Dependent child no longer covered (36) 4. Reduction in hours (18) 5. Reduction in hours when disabled* (29 + 11 if disabled within 60 days of a reduction in hours) 6. Employee termination (18) 7. Employee termination when disabled* (29 + 11 if disabled within 60 days of a termination) 8. Eligibility for SSA benefits (18) 9. Termination for gross misconduct (0) |
| How much may employers charge COBRA participants for? | A maximum of 102% of the group premium for coverage |
| When may employers discontinue COBRA coverage? | If payments aren’t received within 30 days of the time they’re due. |
| When do employees have to notify employer after a qualifying event? | Within 60 days otherwise the employees risk the loss of continued coverage |
| What are 2 amendments to ERISA regarding health and welfare benefits? | 1. COBRA (Consolidated Omnibus Budget Reconciliation Act) 2. HIPAA (Health Information Portability and Accountability Act |
| What does HIPAA cover? | - Prohibits discrimination on the basis of health status as evidenced by an individual’s medical condition or history, claims experience, utilization of health-care services, disability, or evidence of insurability - Places limits on health insurance restrictions for preexisting conditions - Definition of protected health information (PHI), patient information that must be kept private, including physical or men- tal conditions, information about health care given, and payments that have been made. |
| Under HIPAA, what are health insurance restrictions for preexisting conditions? | Insurers may exclude those conditions from coverage for 12 months or, in the case of a late enrollment, for 18 months. |
| Under HIPAA, what are considered preexisting conditions? | Conditions for which treatment was given within 6 months of enrollment in the plan. |
| When can insurers discontinue an employer's group coverage? | - If the employer neglects to pay the premiums - If the employer obtained the policy through fraudulent or intentional misrepresentation - If the employer doesn’t comply with material provisions of the plan - If the insurer is no longer offering coverage in the employer’s geographic area - If none of the plan participants reside in the plan’s network area - If the employer fails to renew a collective bargaining agreement or fails to comply with its provisions. |
| What is protected health information (PHI)? | Patient information that must be kept private, including physical or mental conditions, information about health care given, and payments that have been made. |
| What are covered entities? | Health plans, health care providers, and clearinghouses that conduct business electronically |
| Are FSA exempt from other HIPAA requirements? | Yes |
| Do employers have to comply with the privacy requirement for FSAs? | Yes, because they’re considered group health plans for privacy reasons |
| What are the civil penalties for violation against HIPAA requirements? | $100 per violation and up to $25,000 per person each year |
| 3 levels of criminal penalties | 1. A conviction for obtaining or disclosing PHI can result in a fine of up to $50,000 and 1 year in prison. 2. Obtaining PHI under false pretenses can result in fines of up to $100,000 and 5 years in prison. 3. Obtaining or disclosing PHI with the intent of selling, transferring, or using it to obtain commercial advantage or personal gain can be punished with a fine of up to $250,000 and 10 years in prison. |
| What does Mental Health Parity Act of 1996 require? | It requires insurers to provide the same limits for mental health benefits in their plans as they provide for other health benefits. |
| WPDA | Welfare and Pension Disclosure Act |
| What is Deferred compensation? | Deferred compensation refers to tax-deferred retirement plans, such as individual retirement accounts (IRAs), 401(k) programs, or traditional employer pension plans. |
| What is a qualified deferred compensation plan? | One that meets all ERISA requirements and protects employees from loss of benefits due to employer mismanagement of pension funds. |
| 3 qualified deferred compensation plans | 1. Defined-Benefit Plans 2. Cash-Balance Plans 3. Defined-Contribution Plans |
| How are benefits determined in cash-balanced plans (CBPs)? | - Benefits are determined by using a hypothetical personal pension account (PPA); each month, this account is increased by a set rate—for example, 5% of the employee’s salary. The account also accumulates interest, typically related to the interest rate on Treasury bills. - Downsize: CBPs significantly reduce pension benefits for older workers when traditional defined-benefit plans have been converted to CBPs |
| What is a defined-benefit plan? | - A defined-benefit plan is one in which the employer provides a pension for employees based on a formula that looks at two factors: salary and length of service with the company. - In defined-benefit plans, employers take the risk for paying out the promised benefit at retirement. |
| 4 types of defined-benefit plans | 1. Profit-Sharing Plans aka discretionary contributions 2. Money-Purchase Plans 3. Target-Benefit Plans 4. 401(k) Plans |
| What is a Profit-Sharing Plan aka discretionary contributions? | It allows employers to contribute deferred compensation based on a percentage of company earnings each year. |
| What plan uses a fixed percentage of employee earnings to defer compensation? | Money-Purchase Plans |
| What plan uses actuarial formulas to calculate the contribution amount needed to reach a predetermined benefit amount at retirement? | target-benefit plan |
| What plan does not allow provision of greater benefits to highly compensated employees (HCEs) than other employees? | 401(k) plans |
| What plan allows contribution from both employers and employees? | 401(k) plans |
| In what plan that employees are ultimately responsible for ensuring that the funds are properly managed and available for use when they’re ready to retire? | 401(k) plans |
| Define highly compensated employees (HCEs) under defined-benefit plans | - Earned $115,000 or more during the current or prior year - Owns 5% or more of the company - At the company’s discretion, is one of the top-paid 20% of employees. |
| In what plan requires an actual deferral percentage (ADP) test ? | 401(k) |
| What is the purpose of the actual deferral percentage (ADP) test | To ensure that the plan is within limits set by IRS regulations |
| What would a company do if the ADP test indicates that HCE participants are realizing greater benefits from the plan than non-HCE participants? | To correct this by one of the 3 options: 1. Refunding the excess contributions to HCE participants, which will increase their taxable income for the prior year 2. Increasing matching contributions to non-HCE employees in order to pass the test 3. Aggregating the plan with other plans sponsored by the employer, if available OTHERWISE it will lose the tax benefits of the plan |
| What plan are not protected by ERISA and are generally made available only to a limited number of employees at the executive level? | Nonqualified deferred-compensation plans also know as top-hat plans |
| What plans allow highly compensated employees to defer income in excess of limits placed on qualified plans? | Nonqualified deferred-compensation plans |
| Two types of nonqualified plans | 1. Grantor or Rabbi Trusts 2. Excess Deferral Plans |
| 6 types of medical insurance plans | 1. Health Maintenance Organizations (HMOs) 2. Preferred Provider Organizations (PPOs) 3. Point of Service (POS) Plans 4. Exclusive Provider Organizations (EPOs) 5. Physician Hospital Organizations (PHOs) 6. Fee-for-Service (FFS) Plans |
| What managed-care plan focuses on preventive care and controlling health costs and uses a gatekeeper? | Health Maintenance Organizations (HMOs) |
| What plans use a network of health-care providers for patient services and don’t require patients to be referred by a gatekeeper? | Preferred Provider Organizations (PPOs) |
| What plans include network physicians but allow for referrals outside the network; and require employees to select a primary care physician (PCP) from doctors in the network? | Point of Service (POS) Plans |
| What plans consist of a network and include hospitals; and plan's physicians may see only those patients who are part of the plan; and plan patients may see only those health-care providers in the network; otherwise they will not receive reimbursement for health care obtained outside the network? | Exclusive Provider Organizations (EPOs) |
| What plans contract directly with employer organiza- tions to provide services? | Physician Hospital Organizations (PHOs) |
| What plans are typically the most expensive to employers and employees because it places no restrictions on the doctors or hospitals available to the patient; and patients are required to pay for services out-of-pocket and submit claims to be reimbursed for expenses? | Fee-for-Service (FFS) Plans |
| In managed-care settings, how do providers determine premiums ? | Based on the costs incurred by the group during the current coverage period. The costs are analyzed by type, and premiums for the following period are adjusted based on this experience rating. |
| How long can long-term disability last for? | Anywhere from 2 years until age 65. |
| In which plans the employer creates a claim fund and pays all claims through it; and assumes the risk for unusual claims that may exceed the amount budgeted for the plan? | Self-funded plans |
| In which plan the employers must conduct annual discrimination tests to ensure that HCEs aren’t using the plan disproportionately to non-HCEs? | Self-funded plans |
| What plans use stop-loss insurance to prevent a single catastrophic claim from devastating the claim fund? | Partially self-funded plans |
| What are health purchasing alliances (HPAs)? | Formed by smaller employers in the geographic area to negotiates and con- tract for the plans on behalf of all members of the group. |
| What are considered Work/Life Benefits? | 1. Time-off Programs (Vacation Pay, Sick Pay, Holiday Pay, Paid Time Off (PTO), Sabbaticals and Leaves of Absence, Jury Duty Pay, Bereavement Leave, Parental Leave) 2. Wellness Benefits ( nutrition counseling; education programs for weight control, smoking, and stress reduction; and a program of physical exercise, education about substance abuse, spinal care, and prenatal care) 3. Childcare and Eldercare |
| What are Other Voluntary Benefits? | 1. Flexible Spending Accounts aka Section 125 plans 2. Cafeteria Plans (a wide variety of benefit options in response to various needs of different employee groups) 3. Employee Assistance Programs |
| What section authorizes dependent-care account? | Section 129 |
| What kinds of tests are required by the IRS requires employers tto ensure that FSA plans are being used consistently? | 1. Eligibility tests 2. Utilization tests such as the key-employee-concentration test and dependent-care test |
| What are Statutory Deductions? | - Social Security - Medicare - Federal income tax - State income tax - Unemployment insurance (in some states) - Disability insurance (in some states) - Other state and local taxes |
| What are Disposable earnings? | What is left in an employee’s paycheck after all legally mandated deductions have been made, such as federal and state income tax, Social Security, state and local taxes, disability insurance, and so on |
| According to Tittle III, what are 2 methods for calculating the maximum weekly garnishment? | 1. The 1st method allows garnishment of up to 25% of disposable earnings 2. The 2nd method is calculated by multiplying the federal minimum wage ($7.25 per hour as of July 2011) by 30 ($217.50). Any disposable earnings that exceed that amount ($217.50) must be sent directly to the recipient designated in the order and not to the employee. |
| What does CCPA stand for? | Consumer Credit Protection Act (CCPA) |
| What is the amount of child-support garnishment Title III allows? | - Up to 50% of an employee’s disposable earnings if the employee is currently supporting a spouse or child - Up to 60% if not |
| Is there restrictions on child-support garnishment? | No. |
| Per the FLSA, what information needs to be recorded if younger than 19 years of age? | Apart from records that identify employees, such as their name, address, and Social Security number, along with their birth date , their sex, and their occupation. |
| What does PRWORA stand for? | Personal Responsibility and Work Opportunity Reconciliation Act of 1996. |
| Per PRWORA, when do employers need to report all new hires to the State Department of New Hires? | Within 20 days of their hire date |
| 2 methods to measure impact of total rewards programs | 1. Business Impact Measures 2. Tactical Accountability Measures |
| What are Business Impact Measures ? | One of the clearest indications that there is a problem with the total rewards package in an organization is an increase in turnover and exit interviews that indicate employees are easily able to find higher compensation and/or a richer, more appro- priate benefits package with other employers. |
| What are 2 metrics under Tactical Accountability Measures? | 1. Compensation as a Percent of Operating Expenses 2. Benefits as a Percent of Operating Expenses |
| What are Compensation as a Percent of Operating Expenses ? | - This metric provides information about the cost of human capital relative to other operating expenses for an organization. The higher the compensation costs are, the more impact HR programs can have on the bottom line. - To calculate this metric, divide the total compensation costs (base salary, variable pay, and any deferred compensation) by the total operating expenses. |
| What are Benefits as a Percent of Operating Expenses? | - This measure helps view increased benefit costs in the context of other expenses. Tracking the cost of benefits relative to other operating expenses can help organizations make decisions about the appropriate mix of benefits to offer as costs rise and to view increasing benefits costs in the context of other expense increases. - This metric is calculated by dividing the cost of benefits (health and welfare, paid time off, and so on) by the total operating expenses. |
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