Compensation and Benefits Flashcards

Under COBRA, how long may a terminated employee typically continue group health coverage?

Answer: Up to 18 months

COBRA generally allows qualified beneficiaries to continue group health coverage for up to 18 months following termination or reduction in hours.

What is 'job evaluation' in the context of compensation?

Answer: A systematic process of determining the relative worth of jobs within an organization

Job evaluation uses methods such as point factor, job ranking, or job classification to establish internal pay hierarchies based on job content and requirements.

Which term describes compensation paid to employees for work not performed, such as holidays and vacation?

Answer: Paid time off (PTO) / paid leave

Paid time off for vacations, holidays, sick leave, and personal days is indirect compensation representing pay for time not worked.

What is the purpose of a 'compa-ratio' in compensation management?

Answer: To compare an employee's actual salary to the midpoint of their pay range

Compa-ratio (actual salary ÷ range midpoint × 100) indicates whether an employee is paid below ( 100%) the market midpoint.

What distinguishes a 'merit increase' from a 'cost-of-living adjustment (COLA)'?

Answer: Merit increases are tied to individual performance; COLAs apply uniformly to offset inflation

Merit increases reward individual performance differentially, while COLAs are flat adjustments given to all employees to preserve purchasing power against inflation.

Under the ACA, what is the 'employer mandate' for applicable large employers (ALEs)?

Answer: Offer affordable, minimum value health coverage to full-time employees or face potential penalties

ALEs (50+ full-time equivalent employees) must offer health coverage meeting minimum value and affordability standards to full-time staff or risk IRS penalties under the Employer Shared Responsibility provisions.