Question

All of the following are plan provisions used to control the employer’scosts of providing employee benefits EXCEPT:

Limitations on benefits.

Noncontributory financing.

Probationary periods.

Cost containment techniques such as third-party administrators

Answer 1

The answer is Option Second(Non-contributory Financing).

Under Non-contributing Financing, the employer bears the complete costs. This is done upon the fulfilment of certain conditions. Since the employee doesn't have to bear any costs. That means this is not a method for controlling costs.

Third party administrators also provide support to the employees. They process the claims for the employer who insures the employees. Hence the employer is at the risk of incurring costs.

All the methods like probationary period and cost containment techniques help the employer in controlling the costs. Probationary period helps in gauging the employee's efficiency so that steps can be taken if the employee is deviating from standards.