Benefits and Compensation Flashcards
7 cards from real APA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Benefits and Compensation flashcards as text
Under COBRA, what is the maximum continuation coverage period for a qualified beneficiary who loses coverage due to the covered employee's termination of employment?
Answer: 18 months
COBRA provides up to 18 months of continuation coverage for loss of coverage due to voluntary or involuntary termination of employment or reduction in hours.
An employee's Section 125 cafeteria plan election is irrevocable during the plan year EXCEPT when a qualifying life event occurs. Which of the following is NOT a qualifying change in status?
Answer: Employee receives a salary increase
A salary increase does not qualify as a change in status allowing mid-year cafeteria plan election changes; qualifying events are personal or family status changes.
What is the IRS annual limit for employee contributions to a Health Savings Account (HSA) for self-only HDHP coverage in 2024?
Answer: $4,150
For 2024, the HSA contribution limit for self-only HDHP coverage is $4,150, increased from $3,850 in 2023.
Which type of nonqualified deferred compensation plan allows executives to defer salary into a plan that is funded and protected from the employer's creditors?
Answer: Secular trust
A secular trust is funded and assets are protected from the employer's creditors, though they are immediately taxable to the employee when vested.
For FUTA purposes, which type of payment is excluded from the definition of wages?
Answer: Group-term life insurance premiums up to $50,000 coverage
Employer-paid premiums for up to $50,000 of group-term life insurance coverage are excluded from FUTA wages.
A nonqualified stock option (NSO) granted to an employee is generally taxable at which point?
Answer: When the option is exercised
NSOs are taxable as ordinary income when exercised, based on the spread between the fair market value and the exercise price.
Under the FLSA, which employees are generally exempt from overtime pay requirements under the 'white-collar' exemptions?
Answer: Employees paid on a salary basis at least $684 per week in bona fide executive, administrative, or professional roles
The FLSA white-collar exemptions apply to employees paid at least $684/week ($35,568/year) on a salary basis who primarily perform executive, administrative, or professional duties.