APA Benefits and Compensation 2

Question 1

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?

Accepted Answer

18 months

Answer

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.

Question 2

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?

Accepted Answer

Employee receives a salary increase

Answer

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.

Question 3

What is the IRS annual limit for employee contributions to a Health Savings Account (HSA) for self-only HDHP coverage in 2024?

Accepted Answer

$4,150

Answer

For 2024, the HSA contribution limit for self-only HDHP coverage is $4,150, increased from $3,850 in 2023.

Question 4

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?

Accepted Answer

Secular trust

Answer

A secular trust is funded and assets are protected from the employer's creditors, though they are immediately taxable to the employee when vested.

Question 5

For FUTA purposes, which type of payment is excluded from the definition of wages?

Accepted Answer

Group-term life insurance premiums up to $50,000 coverage

Answer

Employer-paid premiums for up to $50,000 of group-term life insurance coverage are excluded from FUTA wages.

(APA) American Payroll Association Certification Practice Test

(APA) American Payroll Association Certification Practice Test

APA Benefits and Compensation 2