CCP Benefits Design & Administration 2 — Questions and Answers
Question 1: Under the Mental Health Parity and Addiction Equity Act (MHPAEA), employer-sponsored health plans must ensure that mental health and substance use disorder benefits are:
- Unlimited in duration and cost
- No more restrictive than medical/surgical benefits (Correct answer)
- Provided at no cost-sharing to employees
- Administered by a separate insurer
Correct answer: No more restrictive than medical/surgical benefits
MHPAEA requires that financial requirements and treatment limitations for mental health/substance use disorder benefits be no more restrictive than those applied to comparable medical and surgical benefits.
Question 2: What is a key advantage of a defined contribution plan over a defined benefit plan from an employer's perspective?
- Employees receive a guaranteed retirement income
- Investment risk is transferred to the employee (Correct answer)
- Employer contributions are not tax-deductible
- The plan is exempt from ERISA requirements
Correct answer: Investment risk is transferred to the employee
In a defined contribution plan, the employer's obligation ends with making contributions; employees bear the investment risk, which reduces the employer's long-term liability.
Question 3: Which approach to benefits benchmarking compares an organization's benefit costs and offerings against competitors in the same industry and labor market?
- Total compensation benchmarking (Correct answer)
- Internal equity analysis
- Benefits gap analysis
- Benefit cost-per-employee analysis
Correct answer: Total compensation benchmarking
Total compensation benchmarking includes salary plus all benefits, allowing organizations to assess competitive positioning across all components of the rewards package.
Question 4: Which federal law governs the portability, nondiscrimination, and renewability provisions for group health insurance?
- ERISA
- COBRA
- HIPAA (Correct answer)
- ACA
Correct answer: HIPAA
HIPAA (Health Insurance Portability and Accountability Act) established rules for health coverage portability, limits on pre-existing condition exclusions, and nondiscrimination in group health plans.
Question 5: In a self-funded health plan, which financial tool does an employer typically purchase to limit liability for catastrophic individual claims?
- Stop-loss insurance (Correct answer)
- Reinsurance treaty
- Health maintenance bond
- Catastrophic claim reserve
Correct answer: Stop-loss insurance
Stop-loss insurance protects self-funded employers by reimbursing claims that exceed a specified threshold (specific stop-loss) or aggregate annual claims beyond a set amount.
Question 6: A company wants to offer a voluntary benefit that allows employees to purchase additional life insurance without medical underwriting during open enrollment. This is best described as:
- Guaranteed issue life insurance (Correct answer)
- Universal life insurance
- Term life conversion
- Supplemental accidental death coverage
Correct answer: Guaranteed issue life insurance
Guaranteed issue life insurance allows eligible employees to enroll up to a specified coverage amount without providing evidence of insurability, making it accessible during open enrollment.
Question 7: Under the Affordable Care Act (ACA), large employers (50+ FTEs) that fail to offer minimum essential coverage to full-time employees may be subject to which penalty?
- COBRA excise tax
- Employer Shared Responsibility Payment (Correct answer)
- ERISA plan termination fee
- HIPAA noncompliance penalty
Correct answer: Employer Shared Responsibility Payment
The ACA's Employer Shared Responsibility provisions (pay-or-play) impose the Employer Shared Responsibility Payment on applicable large employers that do not offer qualifying coverage and have at least one full-time employee who receives a premium tax credit.
CCP Benefits Design & Administration 2
Under the Mental Health Parity and Addiction Equity Act (MHPAEA), employer-sponsored health plans must ensure that mental health and substance use disorder benefits are: