CPC Employee Benefits Law & Regulatory Updates 1 — Questions and Answers
Question 1: Which federal law primarily regulates employee benefits plans?
- FMLA
- ERISA (Correct answer)
- OSHA
- ADA
Correct answer: ERISA
The Employee Retirement Income Security Act (ERISA) of 1974 is the foundational federal law governing most private-sector employee benefit plans. It sets minimum standards for pension and health plans, protecting participants and beneficiaries by requiring fiduciaries to act prudently and in their best interest. ERISA's comprehensive framework addresses reporting, disclosure, and fiduciary responsibilities.
Question 2: What does COBRA provide to employees?
- Immediate pension benefits
- Continuation of health insurance (Correct answer)
- Higher salaries
- Retirement contributions
Correct answer: Continuation of health insurance
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods. This continuation coverage is available under specific circumstances, such as job loss, reduction in hours, or other qualifying events, ensuring a temporary bridge for health coverage.
Question 3: Which law requires parity between mental health and physical health benefits?
- ACA
- MHPAEA (Correct answer)
- HIPAA
- FLSA
Correct answer: MHPAEA
The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires group health plans and health insurance issuers to ensure that financial requirements and treatment limitations for mental health or substance use disorder benefits are no more restrictive than those for medical/surgical benefits. This ensures equal access to care for mental and physical health conditions, preventing discrimination in coverage.
Question 4: What does HIPAA regulate regarding employee benefits?
- Retirement plan disclosures
- Health information privacy (Correct answer)
- 401(k) contributions
- Pension guarantees
Correct answer: Health information privacy
The Health Insurance Portability and Accountability Act (HIPAA) primarily regulates the privacy and security of protected health information (PHI). In the context of employee benefits, it sets standards for how health plans and their business associates must handle and protect individuals' medical records and other health information. HIPAA also includes provisions for health insurance portability.
Question 5: What is the purpose of the Affordable Care Act (ACA)?
- Eliminate private health insurance
- Expand healthcare coverage (Correct answer)
- Create employer-only plans
- Increase insurance premiums
Correct answer: Expand healthcare coverage
The Affordable Care Act (ACA), signed into law in 2010, aimed to expand access to affordable health insurance coverage for millions of Americans. It achieved this through measures like establishing health insurance marketplaces, expanding Medicaid eligibility, and implementing regulations that prevent insurers from denying coverage based on pre-existing conditions. The ACA sought to improve the quality and affordability of health insurance.
Question 6: Which organization enforces ERISA compliance?
- IRS
- DOL (Correct answer)
- SEC
- OSHA
Correct answer: DOL
The U.S. Department of Labor (DOL), specifically its Employee Benefits Security Administration (EBSA), is the primary agency responsible for enforcing ERISA. The DOL investigates violations, provides guidance, and ensures that fiduciaries adhere to their duties and that plan participants' rights are protected. They play a critical role in safeguarding employee benefits.
Question 7: What does the Family and Medical Leave Act (FMLA) guarantee?
- Higher retirement benefits
- Paid vacation leave
- Unpaid, job-protected leave (Correct answer)
- Bonus payouts
Correct answer: Unpaid, job-protected leave
The Family and Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons. These reasons include the birth or adoption of a child, caring for a seriously ill family member, or the employee's own serious health condition. FMLA ensures job security during critical life events.
Question 8: Which regulatory update requires transparency in retirement plan fees?
- 5500 filing update
- 408(b)(2) fee disclosure rule (Correct answer)
- 401(k) Safe Harbor update
- MHPAEA regulations
Correct answer: 408(b)(2) fee disclosure rule
The ERISA Section 408(b)(2) fee disclosure rule, implemented by the Department of Labor, mandates that service providers to ERISA-covered retirement plans disclose their compensation and potential conflicts of interest to plan fiduciaries. This rule significantly increased transparency, enabling fiduciaries to better assess the reasonableness of fees and make informed decisions in the best interest of participants.
Question 9: Which agency regulates health insurance marketplaces under the ACA?
- DOL
- CMS (Correct answer)
- SEC
- FTC
Correct answer: CMS
The Centers for Medicare & Medicaid Services (CMS), an agency within the U.S. Department of Health and Human Services, is responsible for regulating the health insurance marketplaces established by the Affordable Care Act (ACA). CMS oversees the operations of these marketplaces, ensuring compliance with federal standards and facilitating access to coverage for individuals and small businesses.
CPC Employee Benefits Law & Regulatory Updates 1
Which federal law primarily regulates employee benefits plans?