CEBS GBA 1 EXAM STUDY GUIDE
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Which of the following statements correctly describes minimum
requirements that group benefit plans typically must meet in order to be
prospectively rated on contract renewal? - ANSWER ✔ The more
unpredictable the event that will trigger a claim, the larger the minimum
group size and premium requirements
2. Which of the following statements correctly describes the term graduation as
it applies to mortality tables? - ANSWER ✔ It is a mathematical process that
removes anomalies that should not appear in the mortality data
3. If the plan sponsor pays the premium, which of the following group insured
benefits is taxable to the plan member? - ANSWER ✔ Long-term disability
(LTD)
4. Which of the following statements correctly describes phases of a group plan
marketing? - ANSWER ✔ Plan features of both contributory and
noncontributory benefit plans must be communicated to plan members
during the enrollment process
5. Which of the following statements correctly describes a characteristic of an
insurable risk? - ANSWER ✔ The loss must have financial significance to
, the insured (The loss must not be catastrophic to the insurer. Option C: The
loss must occur by chance. Option D: The loss must be predictable for the
insurer.)
6. With respect to marketing a group insurance plan, which of the following
statements best describes insurer representatives known as account
executives? - ANSWER ✔ They are involved in enrolling group members
and installing new plans
7. Which of the following statements correctly describes the statistical concept
known as the law of large numbers? - ANSWER ✔ Future probabilities of
loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
8. Which of the following statements correctly describes an insured plan that is
insurer-administered? - ANSWER ✔ For self-insured plans with an
administrative services only (ASO) arrangement, the insurer bills the plan
sponsor monthly for administration fees
9. 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? - ANSWER ✔ Avoidance, retention, insurance and control
10.A healthcare organization is contemplating a possible investment in a new
technology and is conducting a return on investment (ROI) analysis. Which
of the following are typically used to define the returns to be valued?
I. Savings in time
II. Savings in cost
III. Cash returns - ANSWER ✔ II and III only
,11.Which of the following is (are) reasons typically cited for offering carved-
out prescription drug plans?
I. The administration costs of carved-out plans are easier to pass
along to participants.
II. Non-carved-out plans often cost more because some retail chain
pharmacy systems turn off monitoring edits when dispensing
prescription drugs to these plans' participants.
III. Pharmacy benefit managers (PBMs) administering carved-out
plans are willing to pay physicians for dispensing certain drugs in
the office while non-carved-out plans refuse to do so. - ANSWER
✔ None
12.Which of the following entities are eligible to participate in a cafeteria plan?
I. Sole proprietors
II. Partners in a partnership
III. 2% or greater shareholders in an S-corporation - ANSWER ✔
None
13.What is ERISA? - ANSWER ✔ Employee Retirement Income Security Act,
1974
-Regulates private pension and welfare group benefit plans
- Prevents states from regulating multistate employers on
provision of health benefits
Often called 'full risk' or 'risk based', MBHOs assume financial risk for
providing services and pay claims. When utilization and corresponding
claims exceed expected levels, the MBHO must absorb overages.
14.MBHOs are paid a predetermined, fixed premium. An average monthly
premium for a fully insured, full-risk plan (excluding an EAP) ranges
between 3% and 6% of medical plan's premium.
, This is called? - ANSWER ✔ Fully insured arrangement
There are two primary cost drivers for fully insured arrangements:
› Group utilization
› Unit costs for practitioner and facility care
15.Purchasers agree to assume financial risk up to a certain amount and the
MBHO assumes any costs above that amount
Premiums based on projected claims costs
This is called? - ANSWER ✔ Shared risk arrangement
16.Often called 'self-funded' or 'self-insured', purchasers assumes financial risks
for health care costs - ANSWER ✔ Administrative Services Only (ASO)
Arrangements
May be administered by independent TPAs for:
› Claims processing
› Administrative and medical management
For a fee, the MBHO handles:
› Medical management
› Utilization review
› Benefit administration
› Administrative functions such as claims payment
17.Based on the National Committee for Quality Assurance (NCQA), MBHOs
must: - ANSWER ✔ demonstrate they meet quality standards such as:
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Which of the following statements correctly describes minimum
requirements that group benefit plans typically must meet in order to be
prospectively rated on contract renewal? - ANSWER ✔ The more
unpredictable the event that will trigger a claim, the larger the minimum
group size and premium requirements
2. Which of the following statements correctly describes the term graduation as
it applies to mortality tables? - ANSWER ✔ It is a mathematical process that
removes anomalies that should not appear in the mortality data
3. If the plan sponsor pays the premium, which of the following group insured
benefits is taxable to the plan member? - ANSWER ✔ Long-term disability
(LTD)
4. Which of the following statements correctly describes phases of a group plan
marketing? - ANSWER ✔ Plan features of both contributory and
noncontributory benefit plans must be communicated to plan members
during the enrollment process
5. Which of the following statements correctly describes a characteristic of an
insurable risk? - ANSWER ✔ The loss must have financial significance to
, the insured (The loss must not be catastrophic to the insurer. Option C: The
loss must occur by chance. Option D: The loss must be predictable for the
insurer.)
6. With respect to marketing a group insurance plan, which of the following
statements best describes insurer representatives known as account
executives? - ANSWER ✔ They are involved in enrolling group members
and installing new plans
7. Which of the following statements correctly describes the statistical concept
known as the law of large numbers? - ANSWER ✔ Future probabilities of
loss are not valid unless a large number of incidents exist to ensure the
outcomes are less likely to deviate
8. Which of the following statements correctly describes an insured plan that is
insurer-administered? - ANSWER ✔ For self-insured plans with an
administrative services only (ASO) arrangement, the insurer bills the plan
sponsor monthly for administration fees
9. 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? - ANSWER ✔ Avoidance, retention, insurance and control
10.A healthcare organization is contemplating a possible investment in a new
technology and is conducting a return on investment (ROI) analysis. Which
of the following are typically used to define the returns to be valued?
I. Savings in time
II. Savings in cost
III. Cash returns - ANSWER ✔ II and III only
,11.Which of the following is (are) reasons typically cited for offering carved-
out prescription drug plans?
I. The administration costs of carved-out plans are easier to pass
along to participants.
II. Non-carved-out plans often cost more because some retail chain
pharmacy systems turn off monitoring edits when dispensing
prescription drugs to these plans' participants.
III. Pharmacy benefit managers (PBMs) administering carved-out
plans are willing to pay physicians for dispensing certain drugs in
the office while non-carved-out plans refuse to do so. - ANSWER
✔ None
12.Which of the following entities are eligible to participate in a cafeteria plan?
I. Sole proprietors
II. Partners in a partnership
III. 2% or greater shareholders in an S-corporation - ANSWER ✔
None
13.What is ERISA? - ANSWER ✔ Employee Retirement Income Security Act,
1974
-Regulates private pension and welfare group benefit plans
- Prevents states from regulating multistate employers on
provision of health benefits
Often called 'full risk' or 'risk based', MBHOs assume financial risk for
providing services and pay claims. When utilization and corresponding
claims exceed expected levels, the MBHO must absorb overages.
14.MBHOs are paid a predetermined, fixed premium. An average monthly
premium for a fully insured, full-risk plan (excluding an EAP) ranges
between 3% and 6% of medical plan's premium.
, This is called? - ANSWER ✔ Fully insured arrangement
There are two primary cost drivers for fully insured arrangements:
› Group utilization
› Unit costs for practitioner and facility care
15.Purchasers agree to assume financial risk up to a certain amount and the
MBHO assumes any costs above that amount
Premiums based on projected claims costs
This is called? - ANSWER ✔ Shared risk arrangement
16.Often called 'self-funded' or 'self-insured', purchasers assumes financial risks
for health care costs - ANSWER ✔ Administrative Services Only (ASO)
Arrangements
May be administered by independent TPAs for:
› Claims processing
› Administrative and medical management
For a fee, the MBHO handles:
› Medical management
› Utilization review
› Benefit administration
› Administrative functions such as claims payment
17.Based on the National Committee for Quality Assurance (NCQA), MBHOs
must: - ANSWER ✔ demonstrate they meet quality standards such as:
