GBA 3 / RPA 1 PRACTICE EXAM 200 COMPREHENSIVE
QUESTIONS WITH ANSWERS & RATIONALES — COMPLETE
COVERAGE OF ERISA, RETIREMENT PLANS,
HEALTH BENEFITS, FIDUCIARY DUTIES, COMPLIANCE,
AND REGULATORY REQUIREMENTS
1. A person's Social Security primary insurance amount (PIA) is which of the
following?
A) The worker's average lifetime earnings adjusted for inflation
B) The worker's monthly retirement benefit at full retirement age
C) The maximum benefit available under Social Security
D) The worker's annual benefit amount before taxes
Correct Answer: B
Rationale: The Primary Insurance Amount (PIA) is the worker's monthly
retirement benefit payable at full retirement age. It serves as the base amount
from which all Social Security benefits (retirement, disability, survivor) are
calculated.
2. When an employee takes an international assignment and is given "tax
protection," this refers to:
A) The employee pays no taxes on foreign income
,B) The employer reimburses the employee only if he or she pays higher taxes as a
result of the assignment
C) The employee receives a tax deduction for international work
D) The employer pays all foreign taxes on behalf of the employee
Correct Answer: B
Rationale: Tax protection reimburses the employee only when the international
assignment results in higher taxes than would have been paid domestically. It does
not guarantee tax-free status or blanket tax payment by the employer.
3. A global trend taking place in defined contribution retirement plans is:
A) Reduced reliance on employer contributions
B) Greater reliance on plans with default investments
C) Elimination of participant-directed investments
D) Mandatory annuitization of all account balances
Correct Answer: B
Rationale: Defined contribution plans globally are increasingly using default
investment options (like target date funds) to help participants who do not
actively make investment elections. This trend reflects concerns about participant
inertia and inadequate retirement savings.
4. A Department of Labor audit quality study showed the percentage of
employee benefit plan audits that had "Unacceptable-Major" deficiencies
adversely affecting audit quality was approximately:
A) 20%
,B) 30%
C) 40%
D) 50%
Correct Answer: C
Rationale: The DOL audit quality study found that approximately 40% of employee
benefit plan audits had "Unacceptable-Major" deficiencies that adversely affected
audit quality, highlighting significant concerns about audit quality in this area.
5. A Social Security totalization agreement is designed to:
A) Eliminate all Social Security taxes for expatriates
B) Provide relief from dual Social Security coverage and taxation under both
systems while integrating benefits earned under multiple systems
C) Replace domestic Social Security benefits with international benefits
D) Double the Social Security benefits for international workers
Correct Answer: B
Rationale: Totalization agreements prevent dual Social Security coverage and
taxation when workers split their careers between the U.S. and another country.
They also coordinate benefits so workers can qualify for benefits based on
combined credits from both countries.
6. The cost of an administrative claims audit in a self-funded health plan
typically is:
A) 1-2% of total annual claim spending
B) 5-10% of total annual claim spending
, C) Less than 1% of total annual claim spending
D) 15-20% of total annual claim spending
Correct Answer: C
Rationale: Administrative claims audits in self-funded health plans typically cost
less than 1% of total annual claim spending, making them a cost-effective tool for
identifying overpayments and improving claims accuracy.
7. The FTC case against a medical transcription services company dealing with
exposure of personal medical information demonstrated that:
A) Only healthcare providers are responsible for patient data
B) Companies must be held to high standards regarding third-party vendor
management and oversight when personal information is involved
C) Medical transcription companies are exempt from privacy regulations
D) Only intentional data breaches are subject to enforcement
Correct Answer: B
Rationale: The FTC settlement established that companies must maintain high
standards for third-party vendor management and oversight when personal
medical information is involved, extending privacy responsibilities beyond direct
healthcare providers.
8. Medigap insurance policies provide coverage for:
A) Prescription drugs only
B) Healthcare service charges such as copayments, coinsurance, and deductibles
not covered by Medicare Parts A and B
QUESTIONS WITH ANSWERS & RATIONALES — COMPLETE
COVERAGE OF ERISA, RETIREMENT PLANS,
HEALTH BENEFITS, FIDUCIARY DUTIES, COMPLIANCE,
AND REGULATORY REQUIREMENTS
1. A person's Social Security primary insurance amount (PIA) is which of the
following?
A) The worker's average lifetime earnings adjusted for inflation
B) The worker's monthly retirement benefit at full retirement age
C) The maximum benefit available under Social Security
D) The worker's annual benefit amount before taxes
Correct Answer: B
Rationale: The Primary Insurance Amount (PIA) is the worker's monthly
retirement benefit payable at full retirement age. It serves as the base amount
from which all Social Security benefits (retirement, disability, survivor) are
calculated.
2. When an employee takes an international assignment and is given "tax
protection," this refers to:
A) The employee pays no taxes on foreign income
,B) The employer reimburses the employee only if he or she pays higher taxes as a
result of the assignment
C) The employee receives a tax deduction for international work
D) The employer pays all foreign taxes on behalf of the employee
Correct Answer: B
Rationale: Tax protection reimburses the employee only when the international
assignment results in higher taxes than would have been paid domestically. It does
not guarantee tax-free status or blanket tax payment by the employer.
3. A global trend taking place in defined contribution retirement plans is:
A) Reduced reliance on employer contributions
B) Greater reliance on plans with default investments
C) Elimination of participant-directed investments
D) Mandatory annuitization of all account balances
Correct Answer: B
Rationale: Defined contribution plans globally are increasingly using default
investment options (like target date funds) to help participants who do not
actively make investment elections. This trend reflects concerns about participant
inertia and inadequate retirement savings.
4. A Department of Labor audit quality study showed the percentage of
employee benefit plan audits that had "Unacceptable-Major" deficiencies
adversely affecting audit quality was approximately:
A) 20%
,B) 30%
C) 40%
D) 50%
Correct Answer: C
Rationale: The DOL audit quality study found that approximately 40% of employee
benefit plan audits had "Unacceptable-Major" deficiencies that adversely affected
audit quality, highlighting significant concerns about audit quality in this area.
5. A Social Security totalization agreement is designed to:
A) Eliminate all Social Security taxes for expatriates
B) Provide relief from dual Social Security coverage and taxation under both
systems while integrating benefits earned under multiple systems
C) Replace domestic Social Security benefits with international benefits
D) Double the Social Security benefits for international workers
Correct Answer: B
Rationale: Totalization agreements prevent dual Social Security coverage and
taxation when workers split their careers between the U.S. and another country.
They also coordinate benefits so workers can qualify for benefits based on
combined credits from both countries.
6. The cost of an administrative claims audit in a self-funded health plan
typically is:
A) 1-2% of total annual claim spending
B) 5-10% of total annual claim spending
, C) Less than 1% of total annual claim spending
D) 15-20% of total annual claim spending
Correct Answer: C
Rationale: Administrative claims audits in self-funded health plans typically cost
less than 1% of total annual claim spending, making them a cost-effective tool for
identifying overpayments and improving claims accuracy.
7. The FTC case against a medical transcription services company dealing with
exposure of personal medical information demonstrated that:
A) Only healthcare providers are responsible for patient data
B) Companies must be held to high standards regarding third-party vendor
management and oversight when personal information is involved
C) Medical transcription companies are exempt from privacy regulations
D) Only intentional data breaches are subject to enforcement
Correct Answer: B
Rationale: The FTC settlement established that companies must maintain high
standards for third-party vendor management and oversight when personal
medical information is involved, extending privacy responsibilities beyond direct
healthcare providers.
8. Medigap insurance policies provide coverage for:
A) Prescription drugs only
B) Healthcare service charges such as copayments, coinsurance, and deductibles
not covered by Medicare Parts A and B
