CPS CPS Benefits & Deductions Management

Question 1

Which section of the Internal Revenue Code governs pre-tax flexible spending accounts (FSAs) offered by employers?

Accepted Answer

Section 125

Answer

Section 401(k)

Answer

Section 457

Answer

Section 403(b)

Question 2

What type of payroll deduction is processed only after all applicable taxes have been calculated and withheld?

Accepted Answer

Post-tax deduction

Answer

Pre-tax deduction

Answer

Tax-exempt deduction

Answer

Mandatory deduction

Question 3

Under ERISA, which type of employee benefit plan is required to provide employees with a Summary Plan Description (SPD)?

Accepted Answer

Both welfare benefit plans and pension plans covered by ERISA

Answer

State disability plans only

Answer

Only defined contribution plans

Answer

Only group health plans

Question 4

Which of the following deductions is considered MANDATORY and cannot be refused by an employee?

Accepted Answer

Federal income tax withholding

Answer

401(k) contributions

Answer

Union dues

Answer

Health insurance premiums

Question 5

What is the primary purpose of a Section 129 Dependent Care Flexible Spending Account (DCFSA)?

Accepted Answer

To allow employees to set aside pre-tax funds for qualified childcare and dependent care expenses

Answer

To cover the cost of elder care insurance premiums only

Answer

To provide post-tax savings for college tuition

Answer

To fund employer-sponsored daycare facilities exclusively

Question 6

What federal law requires employers to offer COBRA continuation coverage to employees who lose group health insurance due to a qualifying event?

Accepted Answer

ERISA's COBRA provisions under the Consolidated Omnibus Budget Reconciliation Act

Answer

ADA

Answer

HIPAA

Answer

FMLA