AFC Employment Benefits and Workplace Financial Programs

Question 1

A client leaves their employer and wants to continue their group health insurance. Under which federal law may they continue coverage, and for how long (for an individual employee)?

Accepted Answer

COBRA; up to 18 months

Answer

ERISA; up to 12 months

Answer

HIPAA; up to 36 months

Answer

ACA; up to 24 months

Question 2

What is the key difference between a Flexible Spending Account (FSA) and a Health Savings Account (HSA)?

Accepted Answer

FSA funds generally expire at year-end ('use it or lose it'), while HSA funds roll over indefinitely

Answer

HSAs are only available to employees with PPO plans

Answer

FSA contributions are made by employers only

Answer

HSAs must be used within 12 months or are forfeited

Question 3

An employer offers a 401(k) match of 50% of employee contributions up to 6% of salary. An employee earning $60,000 contributes 4% to their 401(k). How much will the employer contribute annually?

Accepted Answer

$1,200

Answer

$1,800

Answer

$3,600

Answer

$2,400

Question 4

A client asks about contributing to a Dependent Care FSA (DCFSA). Which of the following expenses is eligible for reimbursement?

Accepted Answer

Licensed daycare costs for a child under age 13

Answer

College tuition for a 20-year-old dependent

Answer

Overnight summer camp for a 12-year-old

Answer

Medical expenses for a dependent child

Question 5

What does 'vesting schedule' mean in the context of employer-sponsored retirement benefits?

Accepted Answer

The timeline over which an employee earns ownership of employer contributions to their retirement account

Answer

The schedule for when an employee must begin taking required minimum distributions

Answer

The period during which an employee can change their investment allocation

Answer

The deadline by which the employee must enroll in the retirement plan

Question 6

An employee wants to reduce their taxable income by maximizing pre-tax benefit contributions. Which of the following is a pre-tax benefit that directly lowers federal income tax liability?

Accepted Answer

Traditional 401(k) contributions

Answer

Roth IRA contributions

Answer

After-tax brokerage account deposits

Answer

Personal savings account deposits