CEBS GBA Exam 1: Foundations of Group
Benefits —Newest Exam & Concept Review
(2026–2027 Edition) INSTANT PDF
DOWNLOAD
CEBS GBA Exam 1: Group Benefits Foundations
1. Which of the following best describes the "Functional Approach" to employee benefit
planning?
A. Focusing solely on the tax-deductibility of premiums
B. An organized system for classifying and analyzing an employer’s total benefits
program
C. A method used only for small, non-unionized businesses
D. The process of eliminating all non-mandated benefits
Explanation: The functional approach evaluates the entire benefits program as a
coordinated whole to ensure it meets the needs of employees and avoids overlapping
coverages or gaps.
2. Under ERISA, which of the following is considered a "Fiduciary"?
A. Any employee who receives benefits from the plan
B. The insurance agent who sold the policy but has no decision-making power
C. Anyone who exercises discretionary authority or control over plan
management or assets
D. Only the CEO of the sponsoring corporation
Explanation: ERISA defines a fiduciary based on function. If a person has discretionary
authority over the plan’s administration or assets, they are a fiduciary held to a high
standard of care.
3. What is the primary purpose of a "Summary Plan Description" (SPD)?
A. To provide the IRS with a tax audit trail
B. To explain the plan’s provisions to participants in a clear, understandable
manner
, C. To list the salaries of all plan administrators
D. To serve as a contract between the employer and the insurance carrier
Explanation: ERISA requires that participants be given an SPD so they understand
their rights, obligations, and how the plan works.
4. Which of the following is a characteristic of a "Fully Insured" group health plan?
A. The employer holds the ultimate risk for all claims
B. The employer pays a fixed premium to an insurance company, which then
assumes the financial risk
C. The plan is exempt from all state premium taxes
D. The plan must be administered by a Third-Party Administrator (TPA)
Explanation: In a fully insured model, the risk is transferred to the carrier. In contrast,
self-funded plans retain the risk.
5. How does the "Cadillac Tax" (though repealed) influence current plan design
discussions?
A. It mandated that all plans must cover luxury vehicle insurance
B. It created a push toward "High-Deductible Health Plans" (HDHPs) to stay under
cost thresholds
C. It required employers to offer only one choice of medical plan
D. It eliminated the tax-free status of employer-provided healthcare
Explanation: Although the tax was repealed, the years spent preparing for it
popularized HDHPs and "skinny" plans to keep total premiums below high-cost
thresholds.
6. Which federal act prohibits employers from discriminating against employees
based on pregnancy or childbirth?
A. COBRA
B. The Pregnancy Discrimination Act (PDA)
C. The Taft-Hartley Act
D. HIPAA
Explanation: The PDA, an amendment to Title VII of the Civil Rights Act, requires that
pregnancy be treated the same as any other medical disability.
7. In a "Point of Service" (POS) plan, what happens if a member goes out-of-
network without a referral?
Benefits —Newest Exam & Concept Review
(2026–2027 Edition) INSTANT PDF
DOWNLOAD
CEBS GBA Exam 1: Group Benefits Foundations
1. Which of the following best describes the "Functional Approach" to employee benefit
planning?
A. Focusing solely on the tax-deductibility of premiums
B. An organized system for classifying and analyzing an employer’s total benefits
program
C. A method used only for small, non-unionized businesses
D. The process of eliminating all non-mandated benefits
Explanation: The functional approach evaluates the entire benefits program as a
coordinated whole to ensure it meets the needs of employees and avoids overlapping
coverages or gaps.
2. Under ERISA, which of the following is considered a "Fiduciary"?
A. Any employee who receives benefits from the plan
B. The insurance agent who sold the policy but has no decision-making power
C. Anyone who exercises discretionary authority or control over plan
management or assets
D. Only the CEO of the sponsoring corporation
Explanation: ERISA defines a fiduciary based on function. If a person has discretionary
authority over the plan’s administration or assets, they are a fiduciary held to a high
standard of care.
3. What is the primary purpose of a "Summary Plan Description" (SPD)?
A. To provide the IRS with a tax audit trail
B. To explain the plan’s provisions to participants in a clear, understandable
manner
, C. To list the salaries of all plan administrators
D. To serve as a contract between the employer and the insurance carrier
Explanation: ERISA requires that participants be given an SPD so they understand
their rights, obligations, and how the plan works.
4. Which of the following is a characteristic of a "Fully Insured" group health plan?
A. The employer holds the ultimate risk for all claims
B. The employer pays a fixed premium to an insurance company, which then
assumes the financial risk
C. The plan is exempt from all state premium taxes
D. The plan must be administered by a Third-Party Administrator (TPA)
Explanation: In a fully insured model, the risk is transferred to the carrier. In contrast,
self-funded plans retain the risk.
5. How does the "Cadillac Tax" (though repealed) influence current plan design
discussions?
A. It mandated that all plans must cover luxury vehicle insurance
B. It created a push toward "High-Deductible Health Plans" (HDHPs) to stay under
cost thresholds
C. It required employers to offer only one choice of medical plan
D. It eliminated the tax-free status of employer-provided healthcare
Explanation: Although the tax was repealed, the years spent preparing for it
popularized HDHPs and "skinny" plans to keep total premiums below high-cost
thresholds.
6. Which federal act prohibits employers from discriminating against employees
based on pregnancy or childbirth?
A. COBRA
B. The Pregnancy Discrimination Act (PDA)
C. The Taft-Hartley Act
D. HIPAA
Explanation: The PDA, an amendment to Title VII of the Civil Rights Act, requires that
pregnancy be treated the same as any other medical disability.
7. In a "Point of Service" (POS) plan, what happens if a member goes out-of-
network without a referral?
