Which of these describes a type of fringe benefit?

Prepare for the Qualified 401(k) Administrator Test. Utilize engaging flashcards and multiple-choice questions, each with hints and explanations. Ace your exam with confidence!

Health insurance is a prime example of a fringe benefit because it provides employees with additional benefits beyond their standard wages or salaries. Fringe benefits are non-wage compensations offered to employees to enhance their overall compensation package. These benefits can include a variety of offerings such as medical insurance, dental insurance, retirement plans, and paid time off.

Unlike standard hourly wages and commissions, which are direct compensation based on work performed, health insurance serves as a supplementary benefit intended to support employees' health and well-being. Pay for performance can also be seen as direct compensation based on employee output, so it does not fit within the typical definition of a fringe benefit. By providing health insurance, employers can improve job satisfaction and attract and retain talent, demonstrating the value of fringe benefits as part of a comprehensive employment package.

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