WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. Regarding medical plans, what is the out-of-pocket maximum?

A) The limit the member will be required to pay at each doctor visit
B) The most that the member will be liable for in relation to co-insurance
C) The lifetime limit for benefits to any one employee
D) The maximum the plan will pay if the member is covered by another insurance plan

2. The concept of bona fide occupational qualifications has most direct relevance to which of the following components of employee compensation programs?

A) Salary surveys
B) Job specifications
C) Job descriptions
D) Performance evaluations

3. What are usual, customary and reasonable charges (UCR)?

A) The charges that are allowable for any given medical procedure with no pre-treatment authorization
B) The charges that are published annually in the Global Insurers' Medical Cost Comparison Guide
C) The charges that are typically paid up front by a plan participant for services rendered.
D) The charges that an insurance carrier determines are normal for a particular medical procedure within a specific geographical area

4. Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?

A) Implement the merit increase budget as is because the anticipated financial obligations have made it necessary
B) Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible
C) Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases
D) Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount

5. Which of the following statements regarding the Worker Economic Opportunity Act is most accurate?

A) Stock options may be granted at a 20% discount
B) Employers must include stock profits in overtime calculations.
C) Employees must hold options for at least 3 months.
D) Employees are not required to participate

Solutions: