Chapter 03 – Regulating Employee Benefits
Chapter 03
Regulating Employee Benefits
1. Employers can deduct the cost of the benefits they offer employees, from their annual
income, as a business expense, if the cost is considered an ordinary and necessary
expense. (The Internal Revenue Code)
2. The Americans with Disabilities Act of 1990 pertains to all private sector employees, all
government employees and labor unions. (The Americans with Disabilities Act of 1990)
3. Cliff vesting schedules must grant employees 100% vesting after 3 years of service. (Title I:
Protection of Employee Benefits)
4. According to IRS guidelines, an employer can deduct the costs of their employees’ benefits
only during the year the benefits were paid. (The Internal Revenue Code)
5. According to FLSA guidelines, employees are entitled to pay at a rate of one-and-one-half
times their regular pay, when they work over 8 hours in a work day. (The Fair Labor Standards
Act of 1938)
6. The Equal Pay Act is an amendment to ERISA and is designed to insure that women and men
receive equal pay for equal work. (The Equal Pay Act of 1963)
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14. Diversifying a pension plan’s investments to minimize the risk of large losses is considered
a fiduciary responsibility. (Title I: Protection of Employee Rights)
15. The Federal Unemployment Tax Act is levied against employees to finance unemployment
insurance benefits. (The Internal Revenue Code)
16. HIPPA reduced the exclusion from health insurance coverage, due to preexisting
conditions, for up to 12 months. (The Health Insurance Portability and Accountability Act of
1996)
17. According to ERISA guidelines, companies can deduct benefit costs when they meet its
nonqualification rules. (The Employee Retirement Income Security Act of 1974)
18. The Civil Rights Act of 1991 was enacted, in part, due to overturn several Supreme Court
rulings that limited employee rights. (The Civil Rights Act of 1991)
19. The NLRA applies to private sector companies, except for companies whose main business
is passenger or freight rail or air carrier. (Labor Unions and Employee Benefits: The National
Labor Relations Act of 1935)
20. The Older Workers Benefit Protection Act set limits on the development and
implementation of employer early retirement practices. (The Age Discrimination in
Employment Act of 1967 (ADEA))
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21. The Pension Protection Act of 2006 was passed for the protection of defined benefit plans
only. (The Pension Protection Act of 2006)
22. Patients’ consent is required for use and disclosure of health records as of 2003. (The Health
Insurance Portability and Accountability Act of 1996)
23. The Equal Employment Opportunity Commission enforces FLSA. (The Fair Labor
Standards Act of 1938)
24. The Equal Pay Act is an amendment of ERISA. (The Equal Pay Act of 1963)
25. Business necessity is not a legally admissible defense against charges of employment
discrimination. (The Civil Right Act of 1991)
26. The Lorance v. AT&T Technologies decision is an important example of the Civil Rights
Act of 1991. (The Civil Right Act of 1991)
27. Under the Americans with Disabilities Act of 1990, an employer cannot refuse to hire a
person with a disability. (The Americans with Disabilities Act of 1990)
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28. The U.S. Department of Labor enforces HIPAA. (The Health Insurance Portability and
Accountability Act of 1996)
29. The Pension Protection Act does not provide any advantages for the Pension Benefit
Guarantee Corporation. (The Pension Protection Act of 2006)
30. The Portal-to-Portal act of 1974 defines work hours. (The Fair Labor Standards Act of
1938)
31. Workers were at a disadvantage after the Great Depression. (Labor Unions and Employee
Benefits: The National Labor Relations Act of 1935)
32. The NLRA applies to agricultural and domestic workers. (Labor Unions and Employee
Benefits: The National Labor Relations Act of 1935)
33. Paid time off is a permissive bargaining subject under NLRA provisions. (Labor Unions
and Employee Benefits: The National Labor Relations Act of 1935)
34. FICA and FUTA are the main taxes that apply to employee benefits. (The Internal Revenue
Code)
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35. ERISA regulates paid time off programs. (The Employee Retirement Income Security Act
of 1974)
36. According to the WARN Act, employers must give employees at least 30 days advance
notice of a plant closing or mass layoff. (Labor Unions and Employee Benefits: The National
Labor Relations Act of 1935)
37. FLSA applies to all types of employees across all industries. (The Fair Labor Standards Act
of 1938)
38. Defined contribution plans are eligible to participate in PBGC. (Title IV: Plan Termination
Insurance)
39. Title II of GINA restricts the deliberate acquisition of genetic information by employers and
others covered by Title II and strictly limits such entities from disclosing genetic
information. (Genetic Information Nondiscrimination Act of 2008)
40. The Equal Employment Opportunity Commission enforces the ADEA. (The Age
Discrimination in Employment Act of 1967 (ADEA))
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67. Briefly discuss the key provisions of the Pension Protection Act of 2006. (The Pension
Protection Act of 2006)
68. Discuss the role of labor unions with regard to employee benefits. (Labor Unions and
Employee Benefits: The National Labor Relations Act of 1935)
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69. Give a brief overview of the main provisions of HIPAA. (The Health Insurance Portability
and Accountability Act of 1996)
Main Points
70. Discuss the recent enactment of GINA (2008) and its relevance to benefit plans. (Genetic
Information Nondiscrimination Act of 2008)
Main Points