CBP Benefits Administration and Strategy 2

Question 1

What is a 'private exchange' in the context of employer-sponsored benefits?

Accepted Answer

An employer-sponsored or vendor-operated online platform where employees choose benefits from multiple carriers using defined employer contributions

Answer

A private exchange is a commercial (non-government) benefits marketplace that allows employees to choose from multiple plan options using a fixed employer-defined contribution, shifting some decision-making to employees.

Question 2

What is the strategic value of a 'defined contribution' approach to benefits?

Accepted Answer

It gives the employer cost certainty by providing a fixed dollar amount while employees choose their own benefits

Answer

A defined contribution benefits strategy fixes the employer's financial exposure by setting a specific dollar amount per employee, allowing employees to allocate that amount across benefit options of their choosing.

Question 3

Which technology system serves as the single source of truth for employee benefit elections, eligibility, and enrollment data?

Accepted Answer

Benefits Administration System (BAS) or HRIS

Answer

A Benefits Administration System (BAS) or integrated HRIS maintains the authoritative record of employee eligibility, enrollments, life events, and benefit elections across all plans.

Question 4

What is the primary risk of poor data quality in benefits administration systems?

Accepted Answer

Incorrect eligibility, coverage, or premium data leading to claim denials, compliance failures, and financial errors

Answer

Poor benefits data quality can cause employees to be enrolled in the wrong plans, pay incorrect premiums, experience denied claims, and expose the employer to ERISA compliance violations.

Question 5

What is a 'dependent eligibility audit' used for in benefits management?

Accepted Answer

Confirming that individuals enrolled as dependents on the health plan actually qualify under plan rules

Answer

A dependent eligibility audit verifies that all individuals enrolled as dependents (spouses, children) meet the plan's eligibility criteria, removing ineligible dependents to reduce costs and legal exposure.

CBP - Certified Benefit Professional Practice Test

CBP - Certified Benefit Professional Practice Test

CBP Benefits Administration and Strategy 2