CPP Benefits Administration 2 — Questions and Answers
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?
- 18 months (Correct answer)
- 29 months
- 36 months
- 24 months
Correct answer: 18 months
COBRA provides 18 months of continuation coverage when coverage is lost due to termination of employment or reduction in hours.
Question 2: Which section of the Internal Revenue Code governs cafeteria plans that allow employees to choose between taxable and non-taxable benefits?
- Section 401(k)
- Section 125 (Correct answer)
- Section 132
- Section 129
Correct answer: Section 125
IRC Section 125 governs cafeteria plans, allowing employees to pay for qualifying benefits with pre-tax dollars.
Question 3: An employee enrolls in a Health FSA and elects $2,400 for the plan year. After two months, they have spent $600 and leave the company. How much can the employer recover?
- $1,800
- $2,400
- $600 (Correct answer)
- $0
Correct answer: $600
Under the uniform coverage rule, the employer can only recover the amount already reimbursed ($600) minus contributions made, net of what was contributed.
Question 4: What is the IRS annual contribution limit for a Health Savings Account (HSA) for an individual with self-only HDHP coverage in 2024?
- $3,850
- $4,150 (Correct answer)
- $7,750
- $3,200
Correct answer: $4,150
For 2024, the HSA contribution limit for self-only HDHP coverage is $4,150.
Question 5: Which of the following benefits is subject to FICA taxes when provided by an employer?
- Group term life insurance premiums for coverage up to $50,000
- Employer contributions to a qualified 401(k) plan
- Employer-paid health insurance premiums
- Cash bonuses paid to employees (Correct answer)
Correct answer: Cash bonuses paid to employees
Cash bonuses are wages subject to FICA; employer 401(k) contributions, health premiums, and group term life up to $50,000 are excluded.
Question 6: Under the ACA employer shared responsibility provisions, what is the threshold of full-time equivalent employees that makes an employer an 'applicable large employer' (ALE)?
- 25 FTEs
- 100 FTEs
- 50 FTEs (Correct answer)
- 75 FTEs
Correct answer: 50 FTEs
An employer with 50 or more full-time equivalent employees is an applicable large employer subject to ACA employer mandate provisions.
Question 7: When must an employer notify employees of their COBRA rights following a qualifying event?
- Within 14 days of the qualifying event
- Within 30 days of the qualifying event
- Within 44 days of the employer learning of the event (Correct answer)
- Within 60 days of the qualifying event
Correct answer: Within 44 days of the employer learning of the event
The plan administrator must send the COBRA election notice within 14 days of receiving notice of the qualifying event, giving a total maximum of 44 days from the event.
CPP Benefits Administration 2
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?