Understanding Employee Benefits

Understanding Employee Benefits

Are you ready to test your understanding of employee benefits? This ten-question multiple-choice quiz will explore what benefits are available and their purpose. After completing all ten questions, click "What's my grade?" at the end of the quiz to see how you did.

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If you have a "cafeteria plan" from your employer, you:
Cafeteria Plans are defined by the Internal Revenue Service in Section 125 of the U.S. tax code. They allow employees to withhold a portion of their pre-tax salary to cover certain medical or child-care expenses. Typically, employees are allowed to choose between a flexible mix of pre-tax health insurance premium deductions, flexible spending accounts (FSAs), and dependent care flexible spending accounts.

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Which of the following is not a type of healthcare "managed care plan"?
There are three types of managed care plans: Health Management Organizations, or HMOs; Preferred Provider Organizations, or PPOs; and Point of Service Plans, or POS. HMOs provide healthcare services on a prepaid basis, and HMO members must use the physicians and health facilities within the prescribed HMO network. PPOs provide network-based services at discounted rates, and members pay for services as they are used. PPO plans are usually sponsored by an insurance company, employer, or other types of organizations such as a union or trade association. Point of Service plans for a blend between the HMO and PPO models in that the plan allows for the use of both in-network services and out-of-network services.

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Which of the following are not typical components of disability plans?
Disability insurance provides income protection when you are still alive but unable to perform your particular occupation. This is the case in instances where you have a short-term illness or injury, including the birth of a child, or when such an illness or injury prevents you from working for even longer periods of time. Typically, short-term disability covers you for periods of time of less than a year, while long-term disability goes into effect for longer periods.

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Which of the following can be paid out of a Flexible Spending Account (FSA) per IRS rules?
Flexible Spending Accounts or FSAs are employer-sponsored benefits that allow employees to set up accounts funded by payroll-deducted pre-tax dollars and to pay for eligible expenses out of that FSA account. Publication 502 by the IRS outlines the IRS's medical and dental expenses for reimbursement using FSA plans. The IRS classifies psychiatric care expenses as medical expenses.

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Under most worker's compensation insurance plans offered by an employer, which of the following is the insured typically entitled to?
Workers' Compensation is a form of insurance that provides medical benefits and income/wage replacement to injured employees as a result of their employment. Typically, this compensation is provided in exchange for the employee relinquishing their right to sue their employer for negligence or other causes.

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Under the Family Medical Leave Act, how many weeks of unpaid, job protected leave are eligible employees entitled to?
The Family Medical Leave Act (FMLA) was passed in 1993, requiring covered employers to provide employees up to 12 weeks a year with job protection and unpaid leave for qualified medical and family reasons. Employees must have worked for their current employer for at least 12 months and 1,250 hours within the last 12 months.

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Employers with 20 or more employees are usually required to continue group health coverage that otherwise might be terminated under what Federal legislation?
The Consolidated Omnibus Budget Reconciliation Act was passed in 1985 that mandates that the health insurance program will be continued after leaving employment.

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Which of the following employee benefits count as taxable income on your federal return?
An employee benefit is a form of non-monetary payment. Any such benefit is taxable income for that employee unless tax law specifically excludes it. Fortunately, accident and health benefits, educational assistance, and group term life insurance coverage are all excluded by tax law. That is not true for unemployment benefits. Unemployment benefits are taxed as regular income and taxed along with any of your other regular income according to the tax bracket you align with.

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Under the Federal Unemployment Tax Act (FUTA), who is required to pay unemployment insurance taxes?
The Federal Unemployment Tax Act (FUTA) is a U.S. federal law that requires employers to pay federal employer tax that is used to fund state workforce unemployment agencies. Employers report this tax by filing Form 940 annually with the Internal Revenue Service.

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Employers are increasingly turning to workplace wellness programs in order to?
Wellness programs typically include gym membership, recreational programs, weight loss assistance, immunizations and flu shots, stop smoking programs, and medical screenings. All of these can help reduce overall healthcare costs, get you up and moving around rather than sitting at a desk, and are a great employee perk that can help companies attract the best people.

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