GBA 1 - Practice Exam: Directing
Benefits Programs Part 1
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 prescription drug rebates is correct?
- CORRECT ANSWER: A rebate occurs when there is an agreement between a pharmacy
benefit manager and a drug manufacturer.
There are several methods for evaluating health system performance. Accreditation by the
NCQA is an example of which of the following methods?
- CORRECT ANSWER: Audit performance evaluation
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
The benefit-oriented philosophy of designing employee benefits tends to focus on:
- CORRECT ANSWER: Needs of employees
The amount of covered medical expenses that a participant must incur before any medical
benefits for non-preventive care services or treatment become payable under a plan is
known as the:
- CORRECT ANSWER: Deductible
The Supreme Court decision in National Federation of Independent Business v. Sebelius
had a profound effect on the implementation of the Affordable Care Act (ACA). Which of
the following statements summarizes the impact of this case?
- CORRECT ANSWER: The decision made Medicare expansion by the states voluntary.
The Affordable Care Act (ACA) aimed to make health insurance more affordable by
providing tax credits to individuals ineligible for other affordable coverage and with
income between which of the following limits:
- CORRECT ANSWER: 100% and 400% of the federal poverty line.
, The concept designed to make victims of losses whole again reflects the principle of:
- CORRECT ANSWER: Indemnification
A mechanism by which one attempts either 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
The Affordable Care Act (ACA), in general, defined a full-time employee as one employed
on average at least how many hours per week?
- CORRECT ANSWER: 30
If a cafeteria plan fails to pass the required nondiscrimination testing, then:
- CORRECT ANSWER: The highly compensated and key employees are taxed based on
the value of their benefits.
An insured individual has $12,000 of covered medical expenses... What will the insured pay
out of the total medical expenses if this is the first claim of the plan year?
- CORRECT ANSWER: $3,600
A behavioral health care carve-out program usually operates under a separate contract
and from a separate company known as a(n):
- CORRECT ANSWER: Managed behavioral health care organization (MBHO)
A peril as the term applies to the insurance mechanism is defined as:
- CORRECT ANSWER: The cause of a loss
The "managed care backlash" of the late 1990s gave direct rise to which of the following
types of health care organizations?
- CORRECT ANSWER: Preferred provider organizations (PPOs)
Which of the following is a requirement of the Health Insurance Portability and
Accountability Act (HIPAA) as it applies to wellness programs?
- CORRECT ANSWER: A program that is offered directly by an employer outside of a
group plan is not subject to HIPAA privacy rules.
The maximum annual contribution that can be made to a health savings account (HSA) is:
- CORRECT ANSWER: A fixed, indexed amount
Benefits for so-called lifestyle drugs:
- CORRECT ANSWER: Have been routinely excluded from all employer plans.
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
Benefits Programs Part 1
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 prescription drug rebates is correct?
- CORRECT ANSWER: A rebate occurs when there is an agreement between a pharmacy
benefit manager and a drug manufacturer.
There are several methods for evaluating health system performance. Accreditation by the
NCQA is an example of which of the following methods?
- CORRECT ANSWER: Audit performance evaluation
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
The benefit-oriented philosophy of designing employee benefits tends to focus on:
- CORRECT ANSWER: Needs of employees
The amount of covered medical expenses that a participant must incur before any medical
benefits for non-preventive care services or treatment become payable under a plan is
known as the:
- CORRECT ANSWER: Deductible
The Supreme Court decision in National Federation of Independent Business v. Sebelius
had a profound effect on the implementation of the Affordable Care Act (ACA). Which of
the following statements summarizes the impact of this case?
- CORRECT ANSWER: The decision made Medicare expansion by the states voluntary.
The Affordable Care Act (ACA) aimed to make health insurance more affordable by
providing tax credits to individuals ineligible for other affordable coverage and with
income between which of the following limits:
- CORRECT ANSWER: 100% and 400% of the federal poverty line.
, The concept designed to make victims of losses whole again reflects the principle of:
- CORRECT ANSWER: Indemnification
A mechanism by which one attempts either 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
The Affordable Care Act (ACA), in general, defined a full-time employee as one employed
on average at least how many hours per week?
- CORRECT ANSWER: 30
If a cafeteria plan fails to pass the required nondiscrimination testing, then:
- CORRECT ANSWER: The highly compensated and key employees are taxed based on
the value of their benefits.
An insured individual has $12,000 of covered medical expenses... What will the insured pay
out of the total medical expenses if this is the first claim of the plan year?
- CORRECT ANSWER: $3,600
A behavioral health care carve-out program usually operates under a separate contract
and from a separate company known as a(n):
- CORRECT ANSWER: Managed behavioral health care organization (MBHO)
A peril as the term applies to the insurance mechanism is defined as:
- CORRECT ANSWER: The cause of a loss
The "managed care backlash" of the late 1990s gave direct rise to which of the following
types of health care organizations?
- CORRECT ANSWER: Preferred provider organizations (PPOs)
Which of the following is a requirement of the Health Insurance Portability and
Accountability Act (HIPAA) as it applies to wellness programs?
- CORRECT ANSWER: A program that is offered directly by an employer outside of a
group plan is not subject to HIPAA privacy rules.
The maximum annual contribution that can be made to a health savings account (HSA) is:
- CORRECT ANSWER: A fixed, indexed amount
Benefits for so-called lifestyle drugs:
- CORRECT ANSWER: Have been routinely excluded from all employer plans.
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
