CEBS GBA Exam 3 Questions With
Correct Answers
An |employee |welfare |benefit |plan |has |four |basis |elements. |What |are |these |elements? |(Mod |
1.1) |- |ANSWER✔✔✔-1) |There |must |be |a |plan, |fund |or |program.
2) |The |plan, |fund |or |program |is |established |or |maintained |by |an |employer.
3) |The |plan, |fund |or |program |is |for |the |purpose |of |providing |specifically |listed |benefits, |
through |the |purchase |of |insurance |or |otherwise.
4) |Benefits |are |provided |to |participants |and |beneficiaries.
Explain |how |a |"plan, |fund |or |program" |for |an |employee |benefit |plan |is |defined |(Mod |1.1) |- |
ANSWER✔✔✔-The |phrase |"plan, |fund |or |program" |is |not |defined |in |ERISA |but |rather |has |
been |laid |out |in |several |court |cases. |Courts |have |held |a |"plan, |fund |or |program" |under |ERISA |
is |established |if, |from |the |surrounding |circumstances, |a |reasonable |person |can |ascertain |the |
intended |benefits, |the |class |of |beneficiaries, |the |source |of |financing |and |the |procedure |to |
receive |benefits.
Describe |the |procedures |required |to |establish |an |ERISA |employee |welfare |benefit |plan |(Mod |
1.1) |- |ANSWER✔✔✔-No |particular |formalities |are |required |to |create |an |ERISA |plan |and |no |
single |action |in |and |of |itself |necessarily |constitutes |establishment |of |ERISA |employee |welfare |
benefit |plan. |Thus, |ERISA |plans |have |been |deemed |to |be |"established |or |maintained" |by |a |
practice |that |would |cause |a |reasonable |EE |to |perceive |an |ongoing |commitment |by |the |ER |to |
provide |EE |benefits. |This |would |include |any |contributions |by |an |ER |toward |payment |of |
benefits |or |by |the |ER |simply |administering |the |benefit.
It |is |easy |to |have |a |plan, |fund |or |program |- |generally |any |ongoing |administrative |scheme |will |
satisfy |this |condition. |Showing |that |an |ER |maintains |a |plan |is |also |easy |- |any |contribution |by |
the |ER |towards |payment |of |benefits |or |administration |of |the |plan |is |enough |(including |a |
contribution |toward |insurance |coverage).
,List |the |types |of |employee |welfare |benefit |plans |not |covered |under |ERISA |and |specifically |
excluded |under |the |statute |(Mod |1.1) |- |ANSWER✔✔✔-1) |Governmental |Plans: |includes |plans |
established |by |the |US |Gov't, |the |gov't |of |any |state |or |political |subdivision |and |any |agency |of |
any |of |the |foregoing |or |a |plan |to |which |the |Railroad |Retirement |Act |applies, |as |well |as |certain |
plans |associated |with |Native |American |Tribal |gov'ts.
2) |Church |plans: |a |plan |established |and |maintained |for |its |EE's |by |a |church |or |by |a |convention
|or |association |of |churches |is |exempt |from |tax |under |IRC |Sec |501.
3) |A |plan |maintained |to |comply |with |state |laws |on |Worker's |Comp, |Unemployment |or |
Mandated |Disability |Insurance.
4) |A |plan |maintained |outside |the |US |primarily |for |nonresident |aliens.
5) |Plans |that |cover |only |self-employed |individuals |and |that |cover |no |"common-law |
employees" |generally |not |subject |to |ERISA.
6) |Plans |that |cover |only |married |shareholders |of |a |corporation |are |not |treated |as |ERISA |plans.
ER |should |be |aware |that |is |may |be |required |to |comply |with |other |federal |laws |that |affe
List |the |types |of |benefits |provided |by |ERISA |health |and |welfare, |and |provide |examples |of |such
|plans |(Mod |1.1) |- |ANSWER✔✔✔-a) |Medical, |Surgical |or |Hospital |Care |or |Benefits
b) |Benefits |in |the |event |of |sickness, |accident, |disability, |death |or |unemployment
c) |Vacation |Benefits
d) |Apprenticeship |or |other |training |benefits
e) |Day-care |centers
f) |Scholarship |funds
g) |Prepaid |legal |services
Ex: |Medical |Insurance, |Dental, |Vision, |Prescription |Drug |Plans, |Drug |or |Alcohol |Treatment |
programs, |FSAs, |EAPs, |Wellness |Programs, |AD&D |and |STD/LTD |Plans.
,Discuss |whether |plans |that |involve |payroll |practices |are |treated |as |ERISA |health |and |welfare |
plans |(Mod |1.1) |- |ANSWER✔✔✔-The |payment |of |an |employee's |normal |compensation |in |full |
or |in |part |out |of |the
employer's |general |assets |for |periods |when |the |employee |is |physically |or |mentally
unable |to |work—that |is, |an |unfunded |short-term |disability |plan—is |generally |not |a
welfare |benefit |plan |subject |to |ERISA. |However, |if |a |disability |program |provides
more |than |an |employee's |normal |compensation |or |is |funded |in |any |way—for
example, |it |is |provided |through |insurance |- |the |program |will |be |a |welfare |benefit |plan |subject |
to |ERISA.
The |Dept |of |Labor |(DOL) |regulations |list |additional |types |of |payroll |practices |as |not |being |
ERISA |plans. |These |include |plans |where |compensation |is |paid |to |an |EE:
a) |While |absent |on |holiday/vacation
b) |While |absent |on |active |military |duty
c) |While |absent |for |jury |duty/witness
d) |On |account |of |periods |of |time |during |which |the |EE |performs |little |or |no |work |while |in |
training
e) |EE |is |relieved |of |duties |while |on |sabbatical |leave
For |a |voluntary |benefit |arrangement |to |be |exempt |from |ERISA |based |on |the |DOL |safe |harbor, |
it |must |meet |certain |requirements, |which |are? |(Mod |1.1) |- |ANSWER✔✔✔-a) |No |ER |or |EE |
organization |contributions
b) |Participation |is |completely |voluntary
c) |No |ER |consideration |except |for |reasonable |compensation |and |administration
d) |No |employer |endorsement
Explain |the |meaning |of |the |term |"no |employer |endorsement" |(Mod |1.1) |- |ANSWER✔✔✔-
Means |an |ER |can |publicize, |collect |premiums, |remit |premiums, |provide |employee |information |
to |an |insurance |company |and |maintain |a
, file |on |the |voluntary |plan. |However, |an |employer |cannot |express |positive |normative
judgment |and |cannot |urge/encourage |employee |participation. |The |participation |of
the |employer |or |employee |organization |should |be |limited |to |the |duties |specified |in
the |regulation, |none |of |which |involve |the |exercise |of |discretionary |duties. |An
employer |hoping |to |rely |on |this |exemption |should |also |be |careful |not |to |create |the
impression |that |the |benefit |is |part |of |its |benefit |package |by, |for |example, |including |it
in |enrollment |materials |or |encouraging |employees |to |enroll. |DOL |warns |in |the |final
Family |and |Medical |Leave |(FMLA) |regulations |that |if |a |plan |is |intended |to |be
exempt |from |ERISA |under |this |provision, |the |ER |should |not |pay |an |EE's |premium |while |the |EE |
is |on |FMLA |leave.
Define |each |of |the |following |ERISA |terms: |
a) |plan |administrator/sponsor
b) |participant
c) |beneficiary |(Mod |1.2) |- |ANSWER✔✔✔-(a) |Plan |administrator/plan |sponsor
A |plan |administrator |is |a |person |with |statutory |responsibility |for |ensuring |that |all |of |the |
required |filings |with |the |federal |government |are |timely |made |and |is |the |person |upon |whom |
the |statute |imposes |authority |to |make |important |disclosures
to |participants |about |plan |benefits. |Generally, |the |plan |administrator |is |designated |in |the |plan |
document. |However, |if |the |plan |administrator |is |not |so |designated, |then |the |responsibility |
defaults |to |the |plan |sponsor, |which |is |usually
the |employer. |Generally, |in |a |single |employer |situation, |the |employer |is |the |plan |sponsor. |
Therefore, |the |employer |is |ultimately |responsible |for |all |reporting |and |disclosure |requirements
|and |should |implement |a |process |to |make |certain |those |responsibilities |are |followed.
b) |Participant:
The |term |participant |has |been |interpreted |broadly |to |include |employees |in, |or |reasonably |
expected |to |be |in, |currently |covered |empl
Correct Answers
An |employee |welfare |benefit |plan |has |four |basis |elements. |What |are |these |elements? |(Mod |
1.1) |- |ANSWER✔✔✔-1) |There |must |be |a |plan, |fund |or |program.
2) |The |plan, |fund |or |program |is |established |or |maintained |by |an |employer.
3) |The |plan, |fund |or |program |is |for |the |purpose |of |providing |specifically |listed |benefits, |
through |the |purchase |of |insurance |or |otherwise.
4) |Benefits |are |provided |to |participants |and |beneficiaries.
Explain |how |a |"plan, |fund |or |program" |for |an |employee |benefit |plan |is |defined |(Mod |1.1) |- |
ANSWER✔✔✔-The |phrase |"plan, |fund |or |program" |is |not |defined |in |ERISA |but |rather |has |
been |laid |out |in |several |court |cases. |Courts |have |held |a |"plan, |fund |or |program" |under |ERISA |
is |established |if, |from |the |surrounding |circumstances, |a |reasonable |person |can |ascertain |the |
intended |benefits, |the |class |of |beneficiaries, |the |source |of |financing |and |the |procedure |to |
receive |benefits.
Describe |the |procedures |required |to |establish |an |ERISA |employee |welfare |benefit |plan |(Mod |
1.1) |- |ANSWER✔✔✔-No |particular |formalities |are |required |to |create |an |ERISA |plan |and |no |
single |action |in |and |of |itself |necessarily |constitutes |establishment |of |ERISA |employee |welfare |
benefit |plan. |Thus, |ERISA |plans |have |been |deemed |to |be |"established |or |maintained" |by |a |
practice |that |would |cause |a |reasonable |EE |to |perceive |an |ongoing |commitment |by |the |ER |to |
provide |EE |benefits. |This |would |include |any |contributions |by |an |ER |toward |payment |of |
benefits |or |by |the |ER |simply |administering |the |benefit.
It |is |easy |to |have |a |plan, |fund |or |program |- |generally |any |ongoing |administrative |scheme |will |
satisfy |this |condition. |Showing |that |an |ER |maintains |a |plan |is |also |easy |- |any |contribution |by |
the |ER |towards |payment |of |benefits |or |administration |of |the |plan |is |enough |(including |a |
contribution |toward |insurance |coverage).
,List |the |types |of |employee |welfare |benefit |plans |not |covered |under |ERISA |and |specifically |
excluded |under |the |statute |(Mod |1.1) |- |ANSWER✔✔✔-1) |Governmental |Plans: |includes |plans |
established |by |the |US |Gov't, |the |gov't |of |any |state |or |political |subdivision |and |any |agency |of |
any |of |the |foregoing |or |a |plan |to |which |the |Railroad |Retirement |Act |applies, |as |well |as |certain |
plans |associated |with |Native |American |Tribal |gov'ts.
2) |Church |plans: |a |plan |established |and |maintained |for |its |EE's |by |a |church |or |by |a |convention
|or |association |of |churches |is |exempt |from |tax |under |IRC |Sec |501.
3) |A |plan |maintained |to |comply |with |state |laws |on |Worker's |Comp, |Unemployment |or |
Mandated |Disability |Insurance.
4) |A |plan |maintained |outside |the |US |primarily |for |nonresident |aliens.
5) |Plans |that |cover |only |self-employed |individuals |and |that |cover |no |"common-law |
employees" |generally |not |subject |to |ERISA.
6) |Plans |that |cover |only |married |shareholders |of |a |corporation |are |not |treated |as |ERISA |plans.
ER |should |be |aware |that |is |may |be |required |to |comply |with |other |federal |laws |that |affe
List |the |types |of |benefits |provided |by |ERISA |health |and |welfare, |and |provide |examples |of |such
|plans |(Mod |1.1) |- |ANSWER✔✔✔-a) |Medical, |Surgical |or |Hospital |Care |or |Benefits
b) |Benefits |in |the |event |of |sickness, |accident, |disability, |death |or |unemployment
c) |Vacation |Benefits
d) |Apprenticeship |or |other |training |benefits
e) |Day-care |centers
f) |Scholarship |funds
g) |Prepaid |legal |services
Ex: |Medical |Insurance, |Dental, |Vision, |Prescription |Drug |Plans, |Drug |or |Alcohol |Treatment |
programs, |FSAs, |EAPs, |Wellness |Programs, |AD&D |and |STD/LTD |Plans.
,Discuss |whether |plans |that |involve |payroll |practices |are |treated |as |ERISA |health |and |welfare |
plans |(Mod |1.1) |- |ANSWER✔✔✔-The |payment |of |an |employee's |normal |compensation |in |full |
or |in |part |out |of |the
employer's |general |assets |for |periods |when |the |employee |is |physically |or |mentally
unable |to |work—that |is, |an |unfunded |short-term |disability |plan—is |generally |not |a
welfare |benefit |plan |subject |to |ERISA. |However, |if |a |disability |program |provides
more |than |an |employee's |normal |compensation |or |is |funded |in |any |way—for
example, |it |is |provided |through |insurance |- |the |program |will |be |a |welfare |benefit |plan |subject |
to |ERISA.
The |Dept |of |Labor |(DOL) |regulations |list |additional |types |of |payroll |practices |as |not |being |
ERISA |plans. |These |include |plans |where |compensation |is |paid |to |an |EE:
a) |While |absent |on |holiday/vacation
b) |While |absent |on |active |military |duty
c) |While |absent |for |jury |duty/witness
d) |On |account |of |periods |of |time |during |which |the |EE |performs |little |or |no |work |while |in |
training
e) |EE |is |relieved |of |duties |while |on |sabbatical |leave
For |a |voluntary |benefit |arrangement |to |be |exempt |from |ERISA |based |on |the |DOL |safe |harbor, |
it |must |meet |certain |requirements, |which |are? |(Mod |1.1) |- |ANSWER✔✔✔-a) |No |ER |or |EE |
organization |contributions
b) |Participation |is |completely |voluntary
c) |No |ER |consideration |except |for |reasonable |compensation |and |administration
d) |No |employer |endorsement
Explain |the |meaning |of |the |term |"no |employer |endorsement" |(Mod |1.1) |- |ANSWER✔✔✔-
Means |an |ER |can |publicize, |collect |premiums, |remit |premiums, |provide |employee |information |
to |an |insurance |company |and |maintain |a
, file |on |the |voluntary |plan. |However, |an |employer |cannot |express |positive |normative
judgment |and |cannot |urge/encourage |employee |participation. |The |participation |of
the |employer |or |employee |organization |should |be |limited |to |the |duties |specified |in
the |regulation, |none |of |which |involve |the |exercise |of |discretionary |duties. |An
employer |hoping |to |rely |on |this |exemption |should |also |be |careful |not |to |create |the
impression |that |the |benefit |is |part |of |its |benefit |package |by, |for |example, |including |it
in |enrollment |materials |or |encouraging |employees |to |enroll. |DOL |warns |in |the |final
Family |and |Medical |Leave |(FMLA) |regulations |that |if |a |plan |is |intended |to |be
exempt |from |ERISA |under |this |provision, |the |ER |should |not |pay |an |EE's |premium |while |the |EE |
is |on |FMLA |leave.
Define |each |of |the |following |ERISA |terms: |
a) |plan |administrator/sponsor
b) |participant
c) |beneficiary |(Mod |1.2) |- |ANSWER✔✔✔-(a) |Plan |administrator/plan |sponsor
A |plan |administrator |is |a |person |with |statutory |responsibility |for |ensuring |that |all |of |the |
required |filings |with |the |federal |government |are |timely |made |and |is |the |person |upon |whom |
the |statute |imposes |authority |to |make |important |disclosures
to |participants |about |plan |benefits. |Generally, |the |plan |administrator |is |designated |in |the |plan |
document. |However, |if |the |plan |administrator |is |not |so |designated, |then |the |responsibility |
defaults |to |the |plan |sponsor, |which |is |usually
the |employer. |Generally, |in |a |single |employer |situation, |the |employer |is |the |plan |sponsor. |
Therefore, |the |employer |is |ultimately |responsible |for |all |reporting |and |disclosure |requirements
|and |should |implement |a |process |to |make |certain |those |responsibilities |are |followed.
b) |Participant:
The |term |participant |has |been |interpreted |broadly |to |include |employees |in, |or |reasonably |
expected |to |be |in, |currently |covered |empl
