CEBS GBA - Actual Module 1 Test 2025/2026 ||100% Complete Questions and Verified Answers || Genuine 2025 Revised Update || Download to Pass!!!

CEBS GBA - Actual Module 1 Test 2025/2026 ||100% Complete Questions and Verified Answers || Genuine 2025 Revised Update || Download to Pass!!! Fringe Benefits - CORRECT ANS Addition of benefits as an offset to higher Labor Broad View - CORRECT ANS "Virtually any form of compensation other than direct wages" Limited (Narrow) View - CORRECT ANS Benefits that stem from an employment relationship, not underwritten or paid for directly by the government Reasons for growth in Employee Benefit Plans - CORRECT ANS Business, tax legislation, collective bargaining, efficiency of the approach Labor Management Relations Act (Taft Hartley Act) - CORRECT ANS Administered by the NLRB, requires good faith bargaining between employers and employees in the matters of hours, wages, and working conditions. Effect of the Industrial Revolution - CORRECT ANS Employees started moving to employers in Cities, the grouping of employees made it easier to cover all employees under one contract. Employer benefits are convenient and simple. Effect of World War II - CORRECT ANS Wages were limited due to the government; employee benefits were deemed as compensation. Group Technique - CORRECT ANS Only certain groups are eligible (a specific company's employees), steady flow of lives (cost increases as age increases), minimum number of lives. Functional Approach - CORRECT ANS Organized system for analysing audience, participants exposure to risk, focused on employee needs, reducing company loss, and being thoughtful of cost parameters, originated in 1967 by George C. Foust. Risk - CORRECT ANS Uncertainty when thinking in terms of a 'loss' (Loss referring to the insurance of a decrease in value). Eg. Illness, death, disability, unemployment, cost of medical bills . Peril - CORRECT ANS The cause of personal/property loss, destruction, or damage. Hazard - CORRECT ANS A condition that increases the probability of a peril occurring or that can increase the loss in the event of a peril. Physical Hazard - CORRECT ANS The presence of flammable materials in absence of extinguishers, machines without safety mechanisms, faulty heating/air conditioner units. Moral Hazard - CORRECT ANS Dishonest, unethical, and immoral people - those who steal/damage company property; file fraudulent medical claims, abuse sick time, falsify pay records or expenses Morale Hazard - CORRECT ANS Those that arise through a person acting careless. It can also include the act of not securing items of value; failing to notify employees of hazards, etc. Pure Risk - CORRECT ANS Either risk will happen, or will not happen. These types of risks can be insured. E.g. sickness, accident, unemployment, disability, theft of property, etc. Speculative Risk - CORRECT ANS Either loss, no loss, or gain. E.g. Purchases of stock, new business ventures, gambling. In each, one could lose, break even, or gain. Personal Risk - CORRECT ANS The most important risk in employee benefits. Includes death, illness, accidents, unemployment, and old age. Can be measured with some degree of accuracy. Potential loss can be estimated through estimates of such factors as medical costs. Property Risk - CORRECT ANS Risk of uncertainty that leads to decrease in value of real personal property. Includes fire, flood, earthquake, wind, theft, auto collision. Types of property include home, furniture, cars, jewellery. Legal Liability Risk - CORRECT ANS A loss resulting from negligent acts of a person resulting in injury to another person. Stems from an injured plaintiff seeking damages. Personal risk - CORRECT ANS The type of risk that is the focal point of employee benefit plans? Methods of Handling Risk - CORRECT ANS Avoidance, Control, Retention, Transfer, Insurance Avoidance - CORRECT ANS Perfect choice as risk is basically never assumed. Does not alleviate all risk of a particular factor. Difficult to achieve in employee benefits due to illness, death, etc. Control - CORRECT ANS The attempt to prevent or reduce potential loss from taking place or to reduce severity of loss. E.g. smoke detectors, seat belts, physical exams, exercise and diet. Examples of this in employee benefits are wellness programs, accident prevention programs, bio metric screenings, smoke free environments. Retention - CORRECT ANS Also referred to as assumption. The risk is assumed and paid for by the person/entity suffering loss. Focuses on severity rather than probability. Transfer - CORRECT ANS Shifts the burden to another party. Two forms are insurance and non-insurance. Insurance - CORRECT ANS Common method of financing employee benefits. Premiums paid into a fund, and in the event of a loss, reimbursement to the person suffering the loss is made. Advantages of Insurance - CORRECT ANS Known premium cost, having an external administrator, may be more economical for the company to use insurance Disadvantages to Insurance - CORRECT ANS Many costs involved (administrative, licensing, commissions, taxes), insurer's ability to handle claims (processing times). Insurable Risk - CORRECT ANS A large number of homogeneous risks, loss should be verifiable and measurable, loss should not be catastrophic in nature, premium should be reasonable, loss should be accidental from the standpoint of the Insured are all characteristics of... Adverse Selection - CORRECT ANS Individuals who have a higher-than-average potential of insurable risks 'select against' the insurer. (People who have a terminal illness or who need surgery opt for insurance) Result of Adverse Selection - CORRECT ANS Dis-appropriate number of insureds incurring losses. Underwriting - CORRECT ANS Method of controlling adverse behaviour Self-Funding - CORRECT ANS Organization retains the risk Indemnity Plans - CORRECT ANS First type of employment-based medical plans. Covers catastrophic losses (hospital). Paid 100% of emergency and 80% other types of services. Deductible fees were generally under $500. Managed Care - CORRECT ANS This concept gave insurance providers a role in steering healthcare services. Provided the inception of HMO's, led to alternative models of medical insurance, and largely replaced traditional indemnity plans. HMO (Health Maintenance Organization) - CORRECT ANS Requires an individual to select a primary care physician (PCP) from a network of providers. Aside from emergency care, no benefits are available for outside this network. Expenses are generally a copay, and there is no need to file claims for reimbursement. PPO (Preferred Provider Organization) - CORRECT ANS Allows for limited benefits outside the preferred networks. Many of these types of plans have tiers within the preferred network, each with a varying level of out-of-pocket expenses. Out of pocket costs can be very expensive.