CEBS GBA 1 Exam Questions and Answers: A Comprehensive Study Guide, Exams of Nursing

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CEBS GBA 1 LATEST ACTUAL EXAM

2024 - 2025 QUESTIONS AND DETAILED

CORRECT ANSWERS (VERIFIED

ANSWERS) | A+ GRADE STUDY GUIDE

Money forfeited by employees under the use-it-or-lose-it rule in cafeteria plans is called an experience gain. These experience gains may not be: Correct Answer Returned to the employees who incurred the forfeitures. They may be:

• retained by the employer
• used to reduce admin expenses
• used to reduce employer's required salary reduction amounts
• donated to charity Numerous studies have examined the effectiveness of workplace wellness programs in promoting health or preventing disease. How effective are they proven to be based on the studies? Correct Answer These programs have had limited evidence of their effectiveness. Generally in a premium conversion cafeteria plan: Correct Answer There are no employer contributions. The "managed care backlash" of the late 1990s created significant growth in which of the following types of health care organizations? Correct Answer Preferred Provider Organizations (PPOs)

For a cafeteria plan to be afforded favorable tax treatment, the plan must allow participants to choose between how many benefits consisting of cash (or a taxable benefit that is treated as cash) and qualified benefits? Correct Answer Two or more The maximum annual contribution that can be made to a health savings account (HSA) is: Correct Answer A flat dollar amount for individuals and a flat dollar amount for families When a participant of a cafeteria plan makes a one-time election on coverage that stays in force from plan year to plan year unless the participant elects to make a change during the applicable election period, it is referred to as a(n): Correct Answer Evergreen election Which risk-handling techniques are being used by a firm that decides to not produce a dangerous chemical, to purchase insurance with a $10,000 deductible on its assets and to install a fire sprinkler system throughout the plant? Correct Answer Avoidance, retention, insurance and control Which of the following statements regarding dental care and the ACA is correct?

• Dental care is not an essential benefit for adults in the ACA
• The ACA requires dental coverage for all children

• Dental coverage is required by the ADA only if health coverage is provided under a self-insured/self- administered plan
• The ACA requires comprehensive dental care for adults and children
• The ACA excludes all dental care benefits Correct Answer Dental care is not an essential benefit for adults in the ACA A mechanism by which one attempts to prevent or reduce the probability of a loss taking place or to reduce the severity of the loss if it does take place is referred to as: Correct Answer Control Benefits for so-called lifestyle drugs are: Correct Answer Typically excluded from employer plans. Which of the following statements regarding workplace wellness programs is correct?
• A workplace wellness program should be designed to target the most fitness-conscious employees.
• Workplace wellness programs are used almost exclusively by large employers.
• The most significant drivers of cost of workplace wellness programs are incentives, equipment and outside service providers.
• Health screenings known as health risk assessments (HRAs) are prohibited if used in conjunction with workplace wellness programs
• Biometric testing for workplace wellness programs must be conducted by qualified physicians. Correct Answer The

most significant drivers of cost of workplace wellness programs are incentives, equipment and outside service providers. Which of the following statements regarding managed behavioral health organizations (MBHOs) and administrative services only (ASO) arrangements is correct?

• ASOs are especially effective for small employers
• ASOs are sometimes referred to as "fully insured" plans
• An ASO transfers the financial risk of health care costs to an insurance company
• A key advantage of ASOs is that employers can offer the same benefit to employees working in different states because ERISA exempts ASO plans from compliance with state laws and regulations.
• Employers who purchase an ASO contract agree to assume the financial risk for claims payments up to a certain (rather large) amount but claims in excess of the stipulated amount are paid by the MBHO Correct Answer A key advantage of ASOs is that employers can offer the same benefit to employees working in different states because ERISA exempts ASO plans from compliance with state laws and regulations. Dental treatments are placed into ten professional treatment categories. The repair of a natural tooth is included in which of the following categories? Correct Answer Restorative

Which of the following statements regarding the functional approach to employee benefit planning is correct?

• The functional approach assumes a business firm is interested in providing an industry-wide average level of employee benefits
• The functional approach is appropriate only for organizations that are well-established
• The functional approach is essentially a planning approach that aligns a total compensation philosophy with a strategic business objectives
• The functional approach is based primarily on the needs of employees and their dependents, rather than on the compensation and service of employees
• The primary goal of the functional approach is to balance short-term benefits with long-term employee benefits Correct Answer The functional approach is essentially a planning approach that aligns a total compensation philosophy with a strategic business objectives The ACA, in general, defined a full-time employee as one employed on average of at least how many hours per week? Correct Answer 30 The amount of covered medical expenses that a participant must incur before any medical benefits for non- preventative care services or treatment become payable under a plan is known as the: Correct Answer Deductible The Small Business Health Care Relief Act created the qualified small employer HRA (QSEHRA). This act applies

to businesses with fewer than how many employees? Correct Answer 50 The ACA aimed to make health insurance more affordable by providing tax credits to individuals ineligible for other affordable coverage and with income between which limits: Correct Answer 100% and 400% of the federal poverty line Which of the following statements regarding primary care physicians (PCPs) is correct?

• PCPs are not used in preferred provider organizations
• Pediatricians cannot be a PCP.
• PCPs are usually a general, family or internal medicine doctor (internist)
• OB/GYN doctors cannot be PCPs Correct Answer PCPs are usually a general, family or internal medicine doctor (internist) Insurance can be distinguished from gambling by which of the following factors? (More than one factor is possible)

1. Insurance handles existing risk while gambling creates a new risk
2. Insurance is speculative risk and gambling is pure risk
3. Insurance is based on a mutual sharing of losses that occur while gambling involves a gain for one party at the expense of another. Correct Answer 1 & 3 Insurance handles existing risk while gambling creates a new risk

Insurance is based on a mutual sharing of losses that occur while gambling involves a gain for one party at the expense of another. Which of the following is/are primary factors that have contributed to cafeteria plans becoming a standard benefit offering today?

1. The increasing costs of benefits
2. Cafeteria plans allow participants to pay for dependent care expenses through the plan and, at the same time, claim personal tax credits on their personal income tax returns.
3. The diverse workforce with differing benefit needs Correct Answer 1 & 3 The increasing costs of benefits The diverse workforce with differing benefit needs Which of the following statements regarding Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage is/are correct?
4. The cost of coverage under COBRA is limited, by law, to no more than 98% of the full cost of coverage for active employees
5. Employers are required to pay a significant portion of the cost of insurance for employees who continue their COBRA coverage
6. COBRA continuation coverage lasts only for a limited period of time Correct Answer COBRA continuation coverage lasts only for a limited period of time.

Which of the following statements regarding self-funding or self-insurance is (are) correct?

1. Self-insurance is sometimes used for property exposures but it cannot be used for employee benefit plans
2. Stop loss insurance utilizes the concept of self- insurance
3. An effective self-insurance program requires a large enough number of exposure units to make losses predictable Correct Answer 2 & 3. Stop loss insurance utilizes the concept of self-insurance An effective self-insurance program requires a large enough number of exposure units to make losses predictable Which of the following statements regarding the effectiveness of workplace wellness programs is (are) correct?
4. Health risk assessments, conducted at the conclusion of the program, can provide a complete diagnosis of a worker's health.
5. Incentives, such as cash, movie tickets, discounts on medical care, have been shown to be very effective in increasing worker participation in wellness programs.
6. Biometric testing for wellness programs is prohibited by Genetic Information Nondiscrimination Act (GINA) Correct Answer Incentives, such as cash, movie tickets, discounts on medical care, have been shown to be very effective in increasing worker participation in wellness programs.

An effective behavioral health program should include which of the following?

1. An integrated mental health/chemical dependency benefit.
2. Inpatient and outpatient services
3. An employee assistance program (EAP) Correct Answer 1, 2 & 3 Which of the following is (are) characteristics of modern prescription drug plans?
4. Plan members pay the full cost at the pharmacy and then file a claim for reimbursement
5. These plans are usually carved out from the medical benefit and are typically administered by a pharmacy benefit manager (PBM) or third party administrator (TPA)
6. These plans have not yet used mail service and the Internet but are expected to do so after regulatory permission is obtained. Correct Answer 1 & 2 Plan members pay the full cost at the pharmacy and then file a claim for reimbursement These plans are usually carved out from the medical benefit and are typically administered by a pharmacy benefit manager (PBM) or third party administrator (TPA) Which of the following is (are) features that are generally associated with consumer-directed health plans (CDHPs)?
7. Relatively low deductible
8. A personal spending account
9. Availability of information tools for enrollees Correct Answer 2 & 3

A personal spending account Availability of information tools for enrollees Which of the following is (are) major requirements of the ACA for employers who sponsor group health plans?

1. The Act eliminated the use of the "essential health benefits" list.
2. The Act eliminated lifetime maximum limitations.
3. The Act expanded coverage for preventative services. Correct Answer 2. The Act eliminated lifetime maximum limitations.
4. The Act expanded coverage for preventative services. A typical behavioral health speciality network might include which of the following health professionals?
5. Individual practitioners and multispecialty group practices
6. Medical doctors that specialize in addictionology
7. Developmental behavioral pediatricians Correct Answer All.
8. Individual practitioners and multispecialty group practices
9. Medical doctors that specialize in addictionology
10. Developmental behavioral pediatricians Which of the following is (are) descriptive of the functional approach to employee to benefit plan design?
11. It involves the evaluation of each benefit plan on a product-oriented basis
12. Using Social Security integration concepts is inconsistent with this approach

3. It is an organized system for classifying and analyzing the risks and needs of various categories of persons into logical categories of exposure to loss and employee needs Correct Answer 3. It is an organized system for classifying and analyzing the risks and needs of various categories of persons into logical categories of exposure to loss and employee needs In addition to medical flexible spending accounts (FSAs), the law permits which of the following other types of FSAs?
4. Dependent care FSAs that allow participants to set aside funds on a pretax basis to pay for certain dependent care expenses
5. FSAs to pay for parking and transit reimbursement
6. FSAs to pay for adoption assistance. Correct Answer 1. Dependent care FSAs that allow participants to set aside funds on a pretax basis to pay for certain dependent care expenses
7. FSAs to pay for parking and transit reimbursement
8. FSAs to pay for adoption assistance. Which of the following statements regarding the distinctions between health reimbursement accounts (HRAs) and health savings accounts (HSAs) is/are correct?
9. There is no federal limit on contributions to HSAs, but HRAs are subject to a rather low federal limit
10. An HRA must be funded solely by the employee, but HSAs are funded only by employers.

3. Nonmedical use is not allowed with HRAs, but such withdrawals are permitted with HSAs, subject to income tax and penalties if the participant is under age 65. Correct Answer 3. Nonmedical use is not allowed with HRAs, but such withdrawals are permitted with HSAs, subject to income tax and penalties if the participant is under age 65. Managed behavioral healthcare organizations have the potential to offer significant savings because of which of the following?
4. They allow large, self-funded employers to offer the same behavioral health benefits across all health plans offered.
5. They are usually managed by firms that specialize in behavioral health treatment.
6. The ACA strongly encourages the practice of carving out behavioral health benefits rather than covering them in more comprehensive health plans. Correct Answer 1. They allow large, self-funded employers to offer the same behavioral health benefits across all health plans offered.
7. They are usually managed by firms that specialize in behavioral health treatment. Which of the following is (are) basic differences between medicine and dentistry?
8. Medical care is rarely cosmetic; dental care often is.
9. Dental expenses generally are lower, more predictable and budgetable with the average medical claim being much higher than the average dental claim

3. There is greater emphasis on prevention in medicine than in dentistry. Correct Answer 1. Medical care is rarely cosmetic; dental care often is.
4. Dental expenses generally are lower, more predictable and budgetable with the average medical claim being much higher than the average dental claim Which of the following statements concerning maximum allowable cost (MAC) for drug benefits is (are) correct?
5. MAC programs reimburse up to a certain threshold on selected common generics.
6. Maximum allowable cost (MAC) is synonymous with average wholesale price (AWP).
7. The concept of MAC is only used by Medicaid. Correct Answer 1. MAC programs reimburse up to a certain threshold on selected common generics. Which of the following statements regarding workplace wellness programs is (are) correct?
8. Many large employers that sponsor workplace wellness programs ask employees to disclose personal health information via a questionnaire, known as health risk assessments (HRA)
9. Most large employers who sponsor workplace wellness programs say that financial incentives to participate in the plan are extremely effective.
10. Most employers require employees to submit to biometric testing (such as physical examination or lab test) as a requirement for participation in the employer's workplace wellness program. Correct Answer 1. Many large employers that sponsor workplace wellness

programs ask employees to disclose personal health information via a questionnaire, known as health risk assessments (HRA) Which of the following entities are eligible to participate in a cafeteria plan?

1. Sole proprietors
2. Partners in a partnership
3. 2% or greater shareholders in an S-Corporation Correct Answer None When planning retirement income, the replacement ratio includes which of the following sources of income?
4. Social security
5. Captial accumulation plans
6. Pension benefits Correct Answer 1. Social security
7. Captial accumulation plans
8. Pension benefits Which of the following policy provisions have historically been used by insurers to control adverse selection?
9. Pre-existing conditions clauses
10. Suicide clauses
11. Open enrollment period restrictions Correct Answer 1, 2 & 3
12. Pre-existing conditions clauses
13. Suicide clauses
14. Open enrollment period restrictions Which of the following factors affect(s) the cost of an employer-sponsored dental plan?

1. Design of the plan
2. Characteristics of the covered group
3. Employer's approach to plan implementation Correct Answer 1, 2 & 3
4. Design of the plan
5. Characteristics of the covered group
6. Employer's approach to plan implementation Which of the following is (are) taxable benefits in a cafeteria plan?
7. Whole life insurance premiums
8. Group term life insurance premiums for coverage greater than $50,
9. Long-term care insurance premiums Correct Answer 2. Group term life insurance premiums for coverage greater than $50, Which of the following statements regarding the types of formularies is (are) correct?
10. Preferred formularies encourage patients to use the preferred or formulary drugs in return for a reduced copayment.
11. Open formularies allow plan enrollees any covered prescription drug prescribed for them.
12. Closed formularies allow changes in the list of preferred drugs only once per year; otherwise the list is static. Correct Answer 1. Preferred formularies encourage patients to use the preferred or formulary drugs in return for a reduced copayment.
13. Open formularies allow plan enrollees any covered prescription drug prescribed for them.

Which of the following are common ways pharmacy benefit managers (PBMs) typically generate profits?

1. Charging payers an administrative fee per transaction based on the number of prescriptions or employees
2. Filling mail-service prescriptions from their wholly owned mail-order pharmacies
3. Requiring pharmacies to remit them the difference when a plan member pays a copay that exceeds the actual cost of a drug. Correct Answer 1. Charging payers an administrative fee per transaction based on the number of prescriptions or employees
4. Filling mail-service prescriptions from their wholly owned mail-order pharmacies Under the Genetic Information Nondiscrimination Act (GINA), which of the following statements is (are) correct?
5. Group health plans are permitted to establish premium contribution differentials on the basis of genetic information as long as they do not exceed 30%
6. GINA prohibits employment discrimination based on genetic information
7. GINA forbids employers from asking about individuals' genetic information but there is an exception for inquiries through voluntary wellness programs Correct Answer 2. GINA prohibits employment discrimination based on genetic information
8. GINA forbids employers from asking about individuals' genetic information but there is an exception for inquiries through voluntary wellness programs

Which of the following statements regarding flexible spending accounts is (are) correct?

1. FSAs allow individuals, before the start of the plan year, to elect a certain amount to be deducted on a pretax basis from their paycheck to pay for IRS-qualified medical expenses
2. Individuals cannot enroll in FSAs if they are covered by any other health plan
3. Employers are not allowed to contribute to FSAs Correct Answer 1. FSAs allow individuals, before the start of the plan year, to elect a certain amount to be deducted on a pretax basis from their paycheck to pay for IRS- qualified medical expenses Which of the following statements regarding the market acceptance of consumer directed health plans (CDHPs) is/are correct?
4. Generally, less than 25% of employers offer a CDHP as their only health plan, but a more typical scenario is for employers to offer a CDHP as a choice within a menu of plan offerings.
5. Among the largest employers, it is increasingly rare to find an employer that does not make CDHP choice available to its employees.
6. All health care expenditures are now "shoppable" because of the transparency CDHPs have brought to the healthcare market. Correct Answer 1. Generally, less than 25% of employers offer a CDHP as their only health plan, but a more typical scenario is for employers to offer a CDHP as a choice within a menu of plan offerings.

2. Among the largest employers, it is increasingly rare to find an employer that does not make CDHP choice available to its employees.
3. All health care expenditures are now "shoppable" because of the transparency CDHPs have brought to the healthcare market. Which of the following statements regarding health savings accounts (HSAs) is/are correct?
4. Contributions to these plans cannot be rolled over from year to year; unused amounts must be forfeited
5. There are penalties for money used for nonmedical expenses before age 65
6. HSAs are coupled with high-deductible health plans Correct Answer 2. There are penalties for money used for nonmedical expenses before age 65
7. HSAs are coupled with high-deductible health plans Which of the following accurately reflect(s) major federal tax advantages associated with employee benefit plans?
8. Most contributions to employee benefit plans result in tax credits for the employer
9. Most contributions to employee benefit plans are only deductible by the employer when considered income for the employee.
10. In certain types of capital accumulation plans, benefits accumulate tax-free to the employee until distributed Correct Answer 3. In certain types of capital accumulation plans, benefits accumulate tax-free to the employee until distributed

Which of the following statements regarding the impact of GINA on wellness programs and health risk assessments is/are correct?

1. Wellness programs that avoid implementing a health risk assessment which solicits genetic information are in general GINA-compliant
2. GINA allows exceptions for inquiries through voluntary wellness programs
3. GINA imposes limits on participatory wellness programs only if such programs are offered outside a group health plan Correct Answer 1. Wellness programs that avoid implementing a health risk assessment which solicits genetic information are in general GINA-compliant
4. GINA allows exceptions for inquiries through voluntary wellness programs Which of the following statements describe(s) reforms enacted by the ACA?
5. The Act precluded insurance companies from denying coverage due to a pre-exisiting condition.
6. In general, the Act prohibited group health plans from offering coverage with any lifetime or annual limits on the dollar value of essential benefits.
7. Imposing coverage requirements on applicable large employers (ALEs) defined as those with more than 20 full- time employees (including full-time equivalent employees) Correct Answer 1. The Act precluded insurance companies from denying coverage due to a pre-exisiting condition.

2. In general, the Act prohibited group health plans from offering coverage with any lifetime or annual limits on the dollar value of essential benefits. How many employees does an employer need to have in order to be an applicable large employer (ALE) under ACA. Correct Answer 50 full-time employees or full-time equivalents All of the following are requirements an employer must meet to offer an Excepted Benefits - Health Reimbursement Account (ER-HRA) except:
3. Employees must be covered in the employer's general health plan (GHP) in order to be eligible for the EB-HRA
4. The amount made available through the EB-HRA cannot exceed a legally set level
5. An EB-HRA must be made available to all "similarly situated individuals" under the same terms regardless of any adverse health factors
6. Employers with more than 100 participants must file a 5500 if such information is not provided in another fashion.
7. There is no specific exception from the nondiscrimination rules for an EB-HRA Correct Answer 1. Employees must be covered in the employer's general health plan (GHP) in order to be eligible for the EB-HRA All of the following statements regarding behavioral health care benefits are correct EXCEPT:
8. The majority of behavioral health care benefits sold in the United States today are purchased by large groups that buy comprehensive health care benefits

2. Behavioral benefits are sold through multiple channels, including large brokerage and consulting firms, large managed behavioral health care organization (MBHO) sales forces and health carrier sales forces.
3. Under the ACA, MBHOs can only be funded through fully insured arrangements
4. The vast majority of employer sponsored plans cover inpatient and outpatient mental health treatment services
5. Coverage for behavioral benefits include intermediate mental health treatment services such as residential treatment and partial (or day) hospitalization as well as intensive outpatient services. Correct Answer 3. Under the ACA, MBHOs can only be funded through fully insured arrangements A broad view of employee benefits includes all of the following types of benefits except:
6. Employer's payment for direct wages
7. Employer's payment for vacation pay
8. Employer's share of Social Security taxes
9. Employer's share of medical-related payments
10. Employer's share of retirement and savings plan payments Correct Answer 1. Employer's payment for direct wages All of the following are common key characteristics of the group insurance technique used in employee benefit plans except:
11. A minimum number of individuals eligible
12. A waiting period applied before benefits commence
13. A steady flow of new entrants

4. A disallowance of any commission payments
5. An automatic determination of benefits Correct Answer
6. A disallowance of any commission payments All of the following are common basic features of a health maintenance organization (HMO) except:
7. An HMO plan requires an individual to select a primary care physician (PCP) from a network of providers
8. Reduced benefits are available for care received outside of the HMO network of providers
9. An individual's out-of-pocket expense is routinely a flat dollar amount called a copay
10. The PCP is empowered to authorize, via referrals, access to additional or specialty care
11. With rare exceptions, individuals have no need to file claims for reimbursement.
12. Generally, premiums are lower premiums compared to other models due to the level of managed care from the PCP system Correct Answer 2. Reduced benefits are available for care received outside of the HMO network of providers An HMO is a closed network of providers - no out-of- network care is covered All of the following are requirements for an ideal insurable risk except:
13. There must be a large number of heterogeneous exposure units that have different loss characteristics being insured against.

2. The insurer must be able to determine if the loss is covered under the policy, and if it is, how much the insurer will pay.
3. The premium must be subject to calculation
4. The premium must be reasonable or economically feasible.
5. The loss should be accidental and unintentional from the standpoint of the insured. Correct Answer 1. There must be a large number of heterogeneous exposure units that have different loss characteristics being insured against. All of the following statements regarding the ADA are true except:
6. The act in general forbids workers from inquiring about another worker's health status.
7. The act makes exceptions for certain medical inquiries.
8. A wellness program is deemed a voluntary one under the act as long as an employer neither requires participation nor penalizes employees who do not participate
9. In case of violations of the act's privacy rules, employees' recourse is to file a complaint with their state's enforcement authority
10. The act is applicable to employers with 15 or more workers Correct Answer 4. In case of violations of the act's privacy rules, employees' recourse is to file a complaint with their state's enforcement authority

All of the following are key factors of the covered group that are usually considered in the cost of a dental plan except:

1. Gender distribution
2. Length of service
3. Geographic location and presence of fluoridation
4. Income levels
5. Occupations Correct Answer 2. Length of service All of the following are correct statements concerning the Taft-Hartley Act except:
6. It is also called the Labor Management Relations Act (LMRA)
7. It sets forth the framework for good-faith collective bargaining over wages, hours, conditions and terms of employment
8. The Act includes the rules for the collective bargaining for employee benefits
9. It relies on the Fair Labor Standards Act (FLSA) to establish the distinction between retirement and welfare benefits
10. It is the legislative basis on which jointly trusteed benefit plan are founded. Correct Answer 4. It relies on the Fair Labor Standards Act (FLSA) to establish the distinction between retirement and welfare benefits A prescription drug rebate occurs when: Correct Answer There is an agreement between a pharmacy benefit manager and a drug manufacturer.

The concept designed to make victims of losses whole again reflect the principle of: Correct Answer Indemnification The design of any employee benefit plan should start with deciding: Correct Answer What are the overall objectives of the plan. A peril as the term applies to the insurance mechanism is defined as: Correct Answer The cause of loss A healthcare plan that has no restrictions on a member's choice of provider, no "steerage," and no basic utilization management is known as: Correct Answer Indemnity plan The legislation that plays a fundamentally important role in protecting sensitive patient information gathered during behavioral treatment is: Correct Answer Health Insurance Portability and Accountability Act (HIPAA) A dental plan in which certain procedures are reimbursed on a scheduled basis and others are reimbursed on a nonscheduled basis is called a(n): Correct Answer Combination plan Regarding return on investment (ROI) evaluations and calculations, ROI evaluations usually: Correct Answer Only consider the payback for the investor in terms of the money they get back for the money they put in.