CCP Benefits Design & Administration 1 — Questions and Answers
Question 1: Which type of health plan requires employees to select a primary care physician and obtain referrals to see specialists?
- Preferred Provider Organization (PPO)
- Health Maintenance Organization (HMO) (Correct answer)
- High-Deductible Health Plan (HDHP)
- Point-of-Service (POS) Plan
Correct answer: Health Maintenance Organization (HMO)
HMOs require members to choose a primary care physician who coordinates all care and provides referrals to specialists within the network.
Question 2: Under ERISA, what is the maximum number of days an employer has to deposit employee 401(k) contributions into the plan trust after the pay date for large plans?
- 7 business days
- 15 business days (Correct answer)
- 30 calendar days
- 45 calendar days
Correct answer: 15 business days
The DOL's safe harbor rule for large plans (generally 100+ participants) requires deposits within 15 business days following the month in which amounts are withheld.
Question 3: A Health Savings Account (HSA) can only be used in conjunction with which type of health plan?
- PPO
- HMO
- High-Deductible Health Plan (HDHP) (Correct answer)
- Traditional indemnity plan
Correct answer: High-Deductible Health Plan (HDHP)
IRS rules require that an individual be enrolled in a qualified High-Deductible Health Plan to be eligible to contribute to an HSA.
Question 4: Which benefit is classified as a legally required benefit under U.S. federal law?
- Group life insurance
- Paid vacation leave
- Social Security contributions (Correct answer)
- Dental insurance
Correct answer: Social Security contributions
Social Security (FICA) contributions are mandated by federal law for most employers and employees, making them a legally required benefit.
Question 5: What is the primary purpose of a Flexible Spending Account (FSA) in an employee benefits program?
- To invest employee contributions in mutual funds tax-deferred
- To allow employees to pay for eligible expenses with pre-tax dollars (Correct answer)
- To provide employer-funded supplemental health coverage
- To accumulate rollover funds for retirement health costs
Correct answer: To allow employees to pay for eligible expenses with pre-tax dollars
An FSA allows employees to set aside pre-tax dollars from their paycheck to pay for qualified medical or dependent care expenses, reducing taxable income.
Question 6: The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers to offer continued health coverage to qualified beneficiaries for how long after a qualifying event such as termination?
- 12 months
- 18 months (Correct answer)
- 24 months
- 36 months
Correct answer: 18 months
COBRA generally provides qualifying employees and covered dependents up to 18 months of continued health coverage following a qualifying event such as job loss.
Question 7: Which of the following best describes a defined benefit pension plan?
- Employees contribute a fixed percentage and bear the investment risk
- The employer guarantees a specific retirement benefit based on a formula (Correct answer)
- Benefits are determined solely by account balance at retirement
- Employees choose investments from a menu of fund options
Correct answer: The employer guarantees a specific retirement benefit based on a formula
In a defined benefit plan, the employer promises a specific monthly benefit at retirement calculated by a formula typically based on salary and years of service.
CCP Benefits Design & Administration 1
Which type of health plan requires employees to select a primary care physician and obtain referrals to see specialists?