2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
CEBS GBA Exam 3 Questions with 100%
Correct & Verified Answers.
An employee welfare benefit plan has four basis elements. What are these
elements? (Mod 1.1) - ✔✔✔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) - ✔✔✔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) - ✔✔✔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).
®™ pg. 1
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
List the types of employee welfare benefit plans not covered under ERISA
and specifically excluded under the statute (Mod 1.1) - ✔✔✔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 affect EE benefit plans.
List the types of benefits provided by ERISA health and welfare, and provide
examples of such plans (Mod 1.1) - ✔✔✔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
®™ pg. 2
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
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) - ✔✔✔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 or while pursuing further
education.
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) -
✔✔✔a) No ER or EE organization contributions
®™ pg. 3
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
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) -
✔✔✔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) - ✔✔✔(a) Plan administrator/plan sponsor
®™ pg. 4
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
CEBS GBA Exam 3 Questions with 100%
Correct & Verified Answers.
An employee welfare benefit plan has four basis elements. What are these
elements? (Mod 1.1) - ✔✔✔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) - ✔✔✔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) - ✔✔✔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).
®™ pg. 1
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
List the types of employee welfare benefit plans not covered under ERISA
and specifically excluded under the statute (Mod 1.1) - ✔✔✔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 affect EE benefit plans.
List the types of benefits provided by ERISA health and welfare, and provide
examples of such plans (Mod 1.1) - ✔✔✔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
®™ pg. 2
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
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) - ✔✔✔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 or while pursuing further
education.
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) -
✔✔✔a) No ER or EE organization contributions
®™ pg. 3
, 2
CEBS GBA Exam 3 Questions with 100% Correct & Verified Answers
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) -
✔✔✔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) - ✔✔✔(a) Plan administrator/plan sponsor
®™ pg. 4
