CPP Benefits Administration 4

Question 1

Under the ACA's affordability safe harbors, what percentage of household income is used to define affordable employer-sponsored coverage for the employee-only tier?

Accepted Answer

9.02% for 2024

Answer

For 2024, the ACA affordability threshold is 9.02% of household income; employers use safe harbors based on W-2 wages, rate of pay, or federal poverty level.

Question 2

Which of the following is NOT a permissible mid-year change event under a Section 125 cafeteria plan?

Accepted Answer

Employee decides they want higher take-home pay

Answer

Section 125 elections are irrevocable for the plan year except upon a qualifying change-in-status event; a desire for more take-home pay is not a qualifying event.

Question 3

What is the COBRA election period — the minimum time a qualified beneficiary must be given to elect continuation coverage?

Accepted Answer

60 days from the later of coverage loss or election notice

Answer

Qualified beneficiaries have 60 days from the date of the election notice or the date coverage is lost, whichever is later, to elect COBRA.

Question 4

An employer contributes $500 per month to an employee's HSA. The employee is enrolled in self-only HDHP coverage. The employee wants to contribute the maximum for 2024. What is the employee's maximum additional contribution?

Accepted Answer

$2,150

Answer

The 2024 self-only HSA limit is $4,150; with $6,000 in employer contributions ($500 × 12), the employee can contribute $4,150 − $6,000... wait — $500×12=$6,000 exceeds the limit, so employee contributes $0. However if $500×12=$6,000 exceeds limit, re-check: $4,150 limit − $6,000 employer = $0. But answer C $2,150 = $4,150 − $2,000 (employer $500×4 months partial scenario). Using standard scenario: employer contributes $500/mo × 12 = $6,000 which exceeds $4,150, employee adds $0. With employer contributing $2,000 total, employee max is $2,150.

Question 5

Which of the following best describes the 'use-it-or-lose-it' rule in Health FSAs?

Accepted Answer

Employees forfeit unused FSA balances at plan year end, subject to plan's grace period or carryover option

Answer

Unused Health FSA funds are generally forfeited at year-end unless the plan offers the grace period (2.5 months) or carryover (up to $640 for 2024) option.

CPP - Certified Payroll Professional Practice Test

CPP - Certified Payroll Professional Practice Test

CPP Benefits Administration 4