COLORADO EMPLOYEE BENEFIT SPECIALIST
CERTIFICATION EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) Q&A 2026
|INSTANT DOWNLOAD PDF
1. Which law primarily governs employee benefit plans in
private-sector organizations in the United States?
A. HIPAA
B. ERISA
C. COBRA
D. ACA
Correct Answer: B. ERISA
Rationale: ERISA (Employee Retirement Income Security Act)
sets minimum standards for most voluntarily established
retirement and health plans in private industry. HIPAA governs
privacy, COBRA handles continuation coverage, and ACA
regulates health insurance coverage requirements.
2. What is the primary purpose of COBRA?
A. To provide retirement savings plans
B. To allow continued health coverage after job loss
C. To regulate payroll taxes
D. To manage disability insurance claims
,Correct Answer: B. To allow continued health coverage after
job loss
Rationale: COBRA allows employees and their families to
temporarily continue employer-sponsored health coverage
after qualifying events such as job loss or reduced hours.
3. Which plan allows employees to use pre-tax dollars for
qualified medical expenses?
A. PPO
B. HMO
C. FSA
D. COBRA
Correct Answer: C. FSA
Rationale: A Flexible Spending Account (FSA) allows employees
to contribute pre-tax income for eligible medical expenses,
reducing taxable income.
4. What does HIPAA primarily protect in employee benefits
administration?
A. Retirement contributions
B. Workplace safety
C. Medical information privacy
D. Wage disputes
Correct Answer: C. Medical information privacy
,Rationale: HIPAA ensures that employees’ protected health
information (PHI) is kept confidential and secure.
5. Which type of insurance replaces a portion of income if an
employee cannot work due to illness or injury?
A. Life insurance
B. Disability insurance
C. Dental insurance
D. Vision insurance
Correct Answer: B. Disability insurance
Rationale: Disability insurance provides income replacement
when an employee cannot work due to qualifying medical
conditions.
6. What does ERISA require employers to provide to plan
participants?
A. Free medical care
B. Plan information and fiduciary responsibility
C. Stock options
D. Paid vacation days
Correct Answer: B. Plan information and fiduciary
responsibility
Rationale: ERISA requires transparency, reporting, and fiduciary
responsibility in managing employee benefit plans.
, 7. Which of the following is a defined contribution retirement
plan?
A. Pension plan
B. 401(k) plan
C. Social Security
D. Medicare
Correct Answer: B. 401(k) plan
Rationale: A 401(k) is a defined contribution plan where
employees and sometimes employers contribute to individual
accounts.
8. What is the main function of an HSA (Health Savings
Account)?
A. Pay life insurance premiums
B. Save pre-tax money for medical expenses
C. Provide retirement income
D. Cover unemployment benefits
Correct Answer: B. Save pre-tax money for medical expenses
Rationale: HSAs allow tax-advantaged savings for qualified
healthcare expenses, typically paired with high-deductible
health plans.
CERTIFICATION EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) Q&A 2026
|INSTANT DOWNLOAD PDF
1. Which law primarily governs employee benefit plans in
private-sector organizations in the United States?
A. HIPAA
B. ERISA
C. COBRA
D. ACA
Correct Answer: B. ERISA
Rationale: ERISA (Employee Retirement Income Security Act)
sets minimum standards for most voluntarily established
retirement and health plans in private industry. HIPAA governs
privacy, COBRA handles continuation coverage, and ACA
regulates health insurance coverage requirements.
2. What is the primary purpose of COBRA?
A. To provide retirement savings plans
B. To allow continued health coverage after job loss
C. To regulate payroll taxes
D. To manage disability insurance claims
,Correct Answer: B. To allow continued health coverage after
job loss
Rationale: COBRA allows employees and their families to
temporarily continue employer-sponsored health coverage
after qualifying events such as job loss or reduced hours.
3. Which plan allows employees to use pre-tax dollars for
qualified medical expenses?
A. PPO
B. HMO
C. FSA
D. COBRA
Correct Answer: C. FSA
Rationale: A Flexible Spending Account (FSA) allows employees
to contribute pre-tax income for eligible medical expenses,
reducing taxable income.
4. What does HIPAA primarily protect in employee benefits
administration?
A. Retirement contributions
B. Workplace safety
C. Medical information privacy
D. Wage disputes
Correct Answer: C. Medical information privacy
,Rationale: HIPAA ensures that employees’ protected health
information (PHI) is kept confidential and secure.
5. Which type of insurance replaces a portion of income if an
employee cannot work due to illness or injury?
A. Life insurance
B. Disability insurance
C. Dental insurance
D. Vision insurance
Correct Answer: B. Disability insurance
Rationale: Disability insurance provides income replacement
when an employee cannot work due to qualifying medical
conditions.
6. What does ERISA require employers to provide to plan
participants?
A. Free medical care
B. Plan information and fiduciary responsibility
C. Stock options
D. Paid vacation days
Correct Answer: B. Plan information and fiduciary
responsibility
Rationale: ERISA requires transparency, reporting, and fiduciary
responsibility in managing employee benefit plans.
, 7. Which of the following is a defined contribution retirement
plan?
A. Pension plan
B. 401(k) plan
C. Social Security
D. Medicare
Correct Answer: B. 401(k) plan
Rationale: A 401(k) is a defined contribution plan where
employees and sometimes employers contribute to individual
accounts.
8. What is the main function of an HSA (Health Savings
Account)?
A. Pay life insurance premiums
B. Save pre-tax money for medical expenses
C. Provide retirement income
D. Cover unemployment benefits
Correct Answer: B. Save pre-tax money for medical expenses
Rationale: HSAs allow tax-advantaged savings for qualified
healthcare expenses, typically paired with high-deductible
health plans.
