GBA 3 / RPA 1 Practice Exam
Questions With New Update Solutions
/. A person's Social Security primary insurance amount (PIA) is... - Answer-✅The
worker's monthly retirement benefit at full retirement age
/.When an employee takes an international assignment, the employee might be given
"tax protection" which refers to... - Answer-✅Reimbursing the employee only in the
event he or she pays higher taxes as a result of the international assignment
/.A global trend taking place in defined contribution plans is... - Answer-✅Greater
reliance on plans with default investments
/.A Department of Labor audit quality study showed the percentage of employee benefit
plan audits that had "Unacceptable-Major" deficiencies that adversely affected audit
quality. The percentage is... - Answer-✅40%
/.A Social Security totalization agreement might be involved when an employee takes
an international assignment. The purpose of the agreement is... - Answer-✅The
agreement provides relief from dual social security coverage and taxation under both
systems and integrates or synchronizes the benefits earned under more than one
system.
/.The cost of an administrative claims audit in a self-funded health plan typically will be...
- Answer-✅Less than 1% of total annual claim spending
/.The Federal Trade Commission (FTC) case against a medical transcription services
company dealt with the exposure of personal medical information. According to the
FTC, the settlement in this case demonstrated... - Answer-✅That companies must be
held to high standards with regard to third-party vendor management and oversight
when it involves personal information
/.The Supreme Court case that made it difficult to argue that an Employee Retirement
Income Security Act plan should not have a contractual limitations period of certain
requirements are met - Answer-✅Heimeshoff v. Hartford Life & Accident Insurance
Company
/.Skilled nursing facility benefits under Medicare Part A are provided only if the
beneficiary has had a hospitalization of at least __ days - Answer-✅Three days
,/.What coverage is provided by "Medigap" insurance policies? - Answer-✅Medigap
covers health care service charges, such as copayments, coinsurance and deductibles,
not covered by Medicare Parts A and B.
/.At a minimum, if there have been no material changes in the plan, the Employee
Retirement Income Security Act requires employers to prepare and distribute new
Summary Plan Descriptions to participants at least every __ years - Answer-✅10
/.Provider network contracts of an administrative services (ASO) agreement for a self-
funded health plan allow a limited time period for recovering claims that were identified
as overpaid. This time period is usually... - Answer-✅One year
/.Form 5500 and other financial reports statutorily must be kept for a minimum of __
years after the filing date - Answer-✅Six
/.Leaders in the data analytics industry developed a Healthcare Analytics Adoption
Model that has a number of levels of analytics adoption that an organization passes
through as it gains sophistication in using its data to drive improvement. In this model,
what is the highest level of sophistication? - Answer-✅Personalized medicine and
prescriptive analytics
/.Approximately how many individuals are working in occupations covered by Social
Security? - Answer-✅9 out of 10 workers
/.Which benefit may not be offered in a cafeteria plan? - Answer-✅403(b) elective
deferrals
/.What is the highest rate at which Social Security benefits can be taxed, depending on
the person's income and tax bracket? - Answer-✅85%
/.What best describes whether the attorney-client privilege is applicable in the area of
employee benefits plans? - Answer-✅As a general rule, it applies; however, courts have
increasingly recognized that an exception may exist in communications involving
fiduciary activities.
/.The maximum premium that can be paid for a qualified longevity annuity contract is the
lesser of an indexed statutory amount or... - Answer-✅25% of a participant's aggregate
account balance
/.Plan fiduciaries must understand the core difference between "active" and "passive"
investment strategies. What best describes the difference? - Answer-✅Passive funds
typically seek to match the performance of an index of securities, while active funds
attempt to outperform the market.
, /.How much are the civil penalties imposed by the Employee Retirement Income
Security Act against certified public accounting (CPA) firms that perform deficient plan
audits? - Answer-✅Zero
/.Hospice care benefits available under Medicare are for terminally ill persons who have
a life expectancy of how many months or less? - Answer-✅Six months
/.A group that has been explicitly identified as being vulnerable to significant litigation
risk when employer securities are part of a retirement plan's investment portfolio is... -
Answer-✅Plan fiduciaries
/.If a defendant plan administrator in a Section 502(c)(1) penalty case is utilizing a no
"clear notice" defense, he or she is claiming the plaintiff... - Answer-✅Failed to make a
sufficiently specific request
/.Under federal law, the value of benefits provided to an employee's same sex civil
union partner... - Answer-✅is not exempt from federal income tax
/.The Employee Retirement Income Security Act generally requires qualified retirement
plan assets to be diversified. However, there is an exception to this important
diversification requirement. What is this exception? - Answer-✅Assets need not be
diversified if, under the circumstances, it is clearly prudent not to do so.
/.A pension plan investment carries an expense of 2%. If the expenses are decreased
by 50 basis points, what will be the new level of expenses? - Answer-✅1.5%
/.What is the procedure to establish an Employee Retirement Income Security Act
(ERISA) employee welfare benefit plan? - Answer-✅No particular formalities are
required to create an ERISA plan.
/.One of the basic disclosure documents required by the Employee Retirement Income
Security Act is the Summary of Benefits and Coverage. It must be presented in a
uniform format and cannot exceed how many double-sided pages? - Answer-✅4
/.What was the effect of the U.S. Supreme Court ruling in Tibble vs. Edison? - Answer-
✅The failure to properly monitor an investment fund once selected would be exposed to
fiduciary breach claims for six years from the date of such monitoring failure.
/.Generally, under best practice standards, how often should an Employee Retirement
Income Security Act investment committee meet? - Answer-✅Quarterly or twice a year
/.Way in which the U.S. health care system is different from health care systems in other
countries: - Answer-✅The U.S. is the only large economy in the world that does not offer
its citizens universal access to medical care.
Questions With New Update Solutions
/. A person's Social Security primary insurance amount (PIA) is... - Answer-✅The
worker's monthly retirement benefit at full retirement age
/.When an employee takes an international assignment, the employee might be given
"tax protection" which refers to... - Answer-✅Reimbursing the employee only in the
event he or she pays higher taxes as a result of the international assignment
/.A global trend taking place in defined contribution plans is... - Answer-✅Greater
reliance on plans with default investments
/.A Department of Labor audit quality study showed the percentage of employee benefit
plan audits that had "Unacceptable-Major" deficiencies that adversely affected audit
quality. The percentage is... - Answer-✅40%
/.A Social Security totalization agreement might be involved when an employee takes
an international assignment. The purpose of the agreement is... - Answer-✅The
agreement provides relief from dual social security coverage and taxation under both
systems and integrates or synchronizes the benefits earned under more than one
system.
/.The cost of an administrative claims audit in a self-funded health plan typically will be...
- Answer-✅Less than 1% of total annual claim spending
/.The Federal Trade Commission (FTC) case against a medical transcription services
company dealt with the exposure of personal medical information. According to the
FTC, the settlement in this case demonstrated... - Answer-✅That companies must be
held to high standards with regard to third-party vendor management and oversight
when it involves personal information
/.The Supreme Court case that made it difficult to argue that an Employee Retirement
Income Security Act plan should not have a contractual limitations period of certain
requirements are met - Answer-✅Heimeshoff v. Hartford Life & Accident Insurance
Company
/.Skilled nursing facility benefits under Medicare Part A are provided only if the
beneficiary has had a hospitalization of at least __ days - Answer-✅Three days
,/.What coverage is provided by "Medigap" insurance policies? - Answer-✅Medigap
covers health care service charges, such as copayments, coinsurance and deductibles,
not covered by Medicare Parts A and B.
/.At a minimum, if there have been no material changes in the plan, the Employee
Retirement Income Security Act requires employers to prepare and distribute new
Summary Plan Descriptions to participants at least every __ years - Answer-✅10
/.Provider network contracts of an administrative services (ASO) agreement for a self-
funded health plan allow a limited time period for recovering claims that were identified
as overpaid. This time period is usually... - Answer-✅One year
/.Form 5500 and other financial reports statutorily must be kept for a minimum of __
years after the filing date - Answer-✅Six
/.Leaders in the data analytics industry developed a Healthcare Analytics Adoption
Model that has a number of levels of analytics adoption that an organization passes
through as it gains sophistication in using its data to drive improvement. In this model,
what is the highest level of sophistication? - Answer-✅Personalized medicine and
prescriptive analytics
/.Approximately how many individuals are working in occupations covered by Social
Security? - Answer-✅9 out of 10 workers
/.Which benefit may not be offered in a cafeteria plan? - Answer-✅403(b) elective
deferrals
/.What is the highest rate at which Social Security benefits can be taxed, depending on
the person's income and tax bracket? - Answer-✅85%
/.What best describes whether the attorney-client privilege is applicable in the area of
employee benefits plans? - Answer-✅As a general rule, it applies; however, courts have
increasingly recognized that an exception may exist in communications involving
fiduciary activities.
/.The maximum premium that can be paid for a qualified longevity annuity contract is the
lesser of an indexed statutory amount or... - Answer-✅25% of a participant's aggregate
account balance
/.Plan fiduciaries must understand the core difference between "active" and "passive"
investment strategies. What best describes the difference? - Answer-✅Passive funds
typically seek to match the performance of an index of securities, while active funds
attempt to outperform the market.
, /.How much are the civil penalties imposed by the Employee Retirement Income
Security Act against certified public accounting (CPA) firms that perform deficient plan
audits? - Answer-✅Zero
/.Hospice care benefits available under Medicare are for terminally ill persons who have
a life expectancy of how many months or less? - Answer-✅Six months
/.A group that has been explicitly identified as being vulnerable to significant litigation
risk when employer securities are part of a retirement plan's investment portfolio is... -
Answer-✅Plan fiduciaries
/.If a defendant plan administrator in a Section 502(c)(1) penalty case is utilizing a no
"clear notice" defense, he or she is claiming the plaintiff... - Answer-✅Failed to make a
sufficiently specific request
/.Under federal law, the value of benefits provided to an employee's same sex civil
union partner... - Answer-✅is not exempt from federal income tax
/.The Employee Retirement Income Security Act generally requires qualified retirement
plan assets to be diversified. However, there is an exception to this important
diversification requirement. What is this exception? - Answer-✅Assets need not be
diversified if, under the circumstances, it is clearly prudent not to do so.
/.A pension plan investment carries an expense of 2%. If the expenses are decreased
by 50 basis points, what will be the new level of expenses? - Answer-✅1.5%
/.What is the procedure to establish an Employee Retirement Income Security Act
(ERISA) employee welfare benefit plan? - Answer-✅No particular formalities are
required to create an ERISA plan.
/.One of the basic disclosure documents required by the Employee Retirement Income
Security Act is the Summary of Benefits and Coverage. It must be presented in a
uniform format and cannot exceed how many double-sided pages? - Answer-✅4
/.What was the effect of the U.S. Supreme Court ruling in Tibble vs. Edison? - Answer-
✅The failure to properly monitor an investment fund once selected would be exposed to
fiduciary breach claims for six years from the date of such monitoring failure.
/.Generally, under best practice standards, how often should an Employee Retirement
Income Security Act investment committee meet? - Answer-✅Quarterly or twice a year
/.Way in which the U.S. health care system is different from health care systems in other
countries: - Answer-✅The U.S. is the only large economy in the world that does not offer
its citizens universal access to medical care.
