BWRR3043 CONFIDENTIAL @UUM UNIVERSITI UTARA MALAYSIA FINAL EXAMINATION FIRST SEMESTER SESSION 2015/2016 COURSE CODE/NAME : BWRR3043 EMPLOYEE BENEFITS MANAGEMENT DATE : 22 DECEMBER 2015 (TUESDAY) TIME 2 9,00- 11.30 AM (2 % HOURS) : BTA 13-18 INSTRUCTIONS: 1. This examination paper contains SIX (6) questions in SIX (6) printed pages excluding the cover page. Die craciine er aracl fed ie ontver All’ suedione n becmaper ered cree 3. Candidates are NOT ALLOWED to take both examination question and the answer booklet out of the examination hall. 4. Candidates are bound by the UUM’s RULES AND PROCEDURES ON ACADEMIC FRAUD. DO NOT OPEN THIS EXAMINATION PAPER UNTIL INSTRUCTED CONFIDENTIALBWRR3043 EMPLOYEE BENEFITS MANAGEMENT “MATRIC NO. QUESTION ONE (10 MARKS) a) b) Give definition of employee benefits. (1 mark) Name THREE (3) types of employee benefits offers under the following categories. (Example: “Paid time off benefits”: the answers are Sick leave, Maternity leave, Vacation and Sabbatical leave] i) _ Extra cash payment to employees (marks) ii) Cost of services to employees @B marks) List any THREE (3) refevants acts to the employee benefits practices in Malaysia. Q marks) QUESTION TWO (10 MARKS) a) by 4) There is a misconception related to the matter of “who is paying for the cost of employee benefits”. This misconception indicates that the paying, for employee benefits is “free add-ons” concept while the reality is not true as being practice in organizations. Explain the tradeoff involved in this concept. @ marks) Revise the Top-Down approach under the Strategic Planning of employee benefits plan in the organization. (2 marks) Based on the life cycle stage, the likely preferred type of employee benefits is align with the employee demographic and live event. What is then the TWO (2) most desired employee benefit preferred by “young and unmarried” employees? @ marks) Compose TWO (2) objectives of communicating of employee benefits plan to employees? (4 marks)BWRRGO43 EMPLOYEE BENEFITS MANAGEMENT MATRIC NO. QUESTION THREE (20 MARKS) a) Answer the following questions related to the characteristics of the group insurance contract: i) Examine any FOUR (4) general underwriting principles of the group insurance? (8 marks) ii) Analyse the Accelerated Benefit in the group contract provisions? Q marks) b) Analyse your ideas by answering the following questions related to disability benefit i) Differientiate the definitions between short term disability (STD) and long- term disability (LTD). (2 marks) ii) “An employee had a heart attack while lifting some heavy materials at work”. Based on that situation, analyse whether he is entitle or not to claim under the workmen’s compensation laws? (2 marks) iii) Differentiate between permanent partial disability with temporary partial disability. Give example for each type of disability. (4 marks) iv) Debate the meaning of workmen applied in the Malaysian Workmen’s Compensation Laws. (2 marks)‘BWRB3043 EMPLOYEE BENEFITS MANAGEMENT MATRIC XO, QUESTION FOUR (20 MARKS) 2) Apply your health benefits knowledge in the following questions: i) Give THREE (3) reasons why does the healtheare cost so much? G marks) ii) Explain the meaning of government daily cash allowance included in the hospital and surgical insurance. (2 marks) iii) Briefly differientiate between Basic Medical Coverage and Major Medical Coverage in medical expenses benefits. (4 marks) iv) Describe the defect in the fee-for-service systems and how to solve it? (3 marks) b) Ong is analyzing two options of group health insurance plans offered by her employer as follows. Option 1: The first group health insurance pian consists of a medical plan plus a supplemental major medical plan, The annual limit for basic medical plan is RM10,000 meanwhile the annual limit for supplemental major medicat plan is, RMS50,000. The insured will be subject to a deductible of RM1,500 before the benefits under the supplemental major medical plan are payable. The supplemental major medical plan is a plan with 70 percent coinsurance. Option 2: The second group health insurance plan is a comprehensive major medical plan. The comprehensive major medical plan has an annual limit of RM60,000. The insured will be subject to a deductible of RM1,500 which can be accumulated from any illnesses or accidents giving rise to eligible claimable medical expenses. The comprehensive major medical plan is a 70 percent coinsurance plan.BWRR3043 EMPLOYEE BENEFITS MANAGEMENT MATRIC NO, Based on the information given, calculate the claim amount payable to Ong on. the following medical plans for a covered medical expense of RM25,000: i) Basic medical plan plus supplemental major medical plan, (3 marks) ii) Comprehensive major medical plan. G marks) iii) Based on the calculations above, which plan would Ong prefer? Justify your answer. (2 marks) QUESTION FIVE (20 MARKS) a) What is an unemployment insurance? Is there any current Jaw provision that impose this unemployment insurance in the Malaysian workforce? (2 marks) b) Complete the table below on the differences between Social insurance and Private insurance: You have to copy the table into the answer booklet. ii) ? Larger amount available, depending on individual desires and ability to pay iii) ? Benefits establish by legal contract (contractual right) iv) ? Competition y) ? ‘Must operate on fully funded basis ©) Categorise FOUR (4) types of workers who are exempted from SOCSO coverage. (4 marks)BWRR30413 EMPLOYEE BENEFITS MANAGEMENT MATRIC NO. 4) The employer pays 1.75% for Employment Injury Insurance Scheme and Invalidity Pension Scheme under the SOCSO schemes. What is the employee’s share of contribution of his or her wages should be paid for coverage under the Invalidity Pension Scheme? (1 mark) e) List FOUR (4) major cost controls applied in the dental insurance. (4 marks) f) You have been asked to do two presentations on other (discretionary) types of employee benefits practices in Malaysia. What is the name of your TWO (2) selected benefits in your presentations? Briefly explain them. (4 marks) QUESTION SIX (20 MARKS) a) Compose your understanding on the Malaysian retirement systems by answering the followings: i) Beside Social Security, Defined Benefits (DB) and Defined Contribution (DC) Plans, provide THREE (3) other sources of retirement income for an individual. marks) ii) Give areal example of the Defined Contribution (DC) Plans in Malaysia (1 mark) iii) Which Plan (DB or DC) that best fit the nature of today’s workforce which have frequent job changing nature? (1 mark) iv) Analyse THREE (3) conditions where pension payment for government retiree will cease even though she/he is still alive (3 marks)» ‘BW RR3043 EMPLOYEE BENEFITS MANAGEMENT MATRIC NO, ¥) Provide the formula to calculate the benefit amount on gratuity payment to government pensioners. (2 marks) vi) What is the percentage of a guaranteed minimum annual dividend promised to be paid out by Employees Provident Fund (EPF) in Malaysia? (1 mark) vii) What is the percentage (portion) of Account 1 in the EPF? When can you make withdrawal from Account 1? (2 marks) viii) Compare the protection provided by an insurance and by an annuity? (2 marks) You are given the following informations related to Loh’s house and her EPF saving account: * Cost of house = RM200,000 * Balance in EPF Account II = RM38,000 * Loan amount = 90% of the house price Compute the amount that Loh could withdraw under the housing-withdrawal scheme of her EPF account. (S marks) END OF QUESTIONS