CEBS GBA Exam 1 PRACTICE QUESTIONS AND 100%
VERIFIED ANSWERS RATED A+ 2025
Broad view of Employee Benefits (Mod 1.1) -correct answer --
>>Considers Employee Benefits to be virtually any form of
compensation other than direct wages paid to Employees (Ex:
WC, Unemployment, State DI, SS, Vacation, Holidays,
401K/Retirement, Employer share of Medical, Severance Pay,
Child Care, etc..)
Narrow view of Employee Benefits (Mod 1.1) -correct answer
-->>Any type of plan sponsored or initiated by Employees and
Employers and engaged in providing benefits that result from the
employment relationship and that are not underwritten or paid
directly by the government; (Ex: Benefits excluded include those
legally mandated - WC, SS).
Impact of Labor Unions on Employee Benefits (Mod 1.2) -
correct answer -->>Through Collective Bargaining, Employee
Benefit Plans have been impacted. In 1948 ruling states that the
duty to bargain in good faith over wages also included insurance
and fringes (pension). In WW Cross & Co, NLRB ruled wages
included health and accident plan.
What is the Taft-Hartley Act? (Mod 1.2) -correct answer --
>>The Labor Management Relations Act of 1947 is a United
States federal law that restricts the activities and power of labor
unions. This set forth good-faith collective bargaining over wages,
hours, terms of employment and benefits.
3 Examples of Tax Advantages of Employee Benefit Plans (Mod
1.2) -correct answer -->>1: Employer Contributions are Tax
Deductible
,2: Employer Contributions are not considered income to
Employees
3: Certain Retirement Benefits Accumulate Tax-Free until
distributed.
Examples of Questions that should be addressed when creating
benefit objectives (Mod 1.3) -correct answer -->>Ex: What
benefits should be provided? Who should be covered? Should
Employees have options? How should plan be financed? How
should plan be administered? How should plan be communicated
to Employees?
What is the Functional Approach to Employee Benefit Planning?
(Mod 1.4) -correct answer -->>Application of a systematic
method of analysis to an Employer's Total Employee Benefits
Program. It analyzes the organization's EBP as a whole in terms
of its ability to meet various employee's needs and to manage
loss exposures within the overall compensation goals and
parameters.
Why is the Functional Approach appropriate when planning,
designing and administering Employee Benefits? (Mod 1.4) -
correct answer -->>1: EE Benefits Significant Element of EE
Comp and are a Tax-Effective Way to Compensate
2: EE Benefit Represent Large Labor Cost, so ER's should
effectively plan/cost-control
3: In the past, EE Benefits were adopted on piece-meal basis;
helps to now fill gaps/overlap
4: Systematic Approach to planning helps to keep the EBP
current, competitive and in compliance with updated requirements
(ACA)
5: Benefits to be integrated properly together
,Compare Compensation/Service Oriented Benefit Philosophy with
the Needs-Oriented (Mod 1.4) -correct answer --
>>Compensation/Service: EBP comprised of primarily
compensation, service or both. Level of benefits tied to salary or
pay levels/years of service
Needs Orientated: Focuses on Needs of EE's and their
dependents
Identify Steps in Applying Functional Approach (Mod 1.4) -
correct answer -->>1: Classify EE/Dep Needs & Objectives
(in logical/functional categories)
2: Classify Categories of EE's to be protected
3: Analyze present benefits in terms of functional categories of
needs/objectives, persons to benefit, and regulatory requirements
4: Determine any gaps or overlap in benefits from all sources in
terms of functional categories of needs & the persons to be
protected
5: Consider recommendations for changes
6: Estimate costs/savings from each recommendation
7: Evaluate alternative methods of financing for those
recommended benefits (and existing ben)
8: Consider other cost-saving techniques
9: Decide upon appropriate benefits and methods of financing as
a result of analysis
10: Implement Changes
11: Communication Changes to Employees
12: Periodically re-evaluate EBP
Define Needs/Exposures covered under EBP (Mod 1.4) -correct
answer -->>1: Medical Expenses (EE/Dep)
2: Losses due to Disability (Short/Long Term)
3: Death (EE/Dep/Retirees)
4: Retirement Needs
, 5: Capital Accumulation Needs/Goals
6: Needs for Unemployment/Layoff/Termination
7: Needs for Financial/Retirement Counseling
8: Losses from property/liability exposures
9: Needs for Dependent Care Assistance
10: Needs for Educational Assistance (EE/Dep)
11: Needs for Custodial-Care Expenses (LTC)
12: Other Needs/Goals (Stock Purchase Plan)
Explain Concept of Replacement Ratio in terms of creating
Retirement/Disability Plans (Mod 1.5) -correct answer -->>A
Replacement Ratio is a person's gross income after retirement,
divided by his or her gross income before retirement. Should
include SS, capital accumulation benefits as well as retirement
plans.
Define Protection-Oriented Benefits (Mod 1.5) -correct answer
-->>Consist of Medical Expense Benefits, Life/STD/LTD
Insurance - protect against serious loss exposures that could spell
immediate financial disaster. As such, they have a relatively short
probationary period due to the need of immediate coverage.
Define Accumulation-Orientated Benefits (Mod 1.5) -correct
answer -->>Consist of Pension Plans, Profit-Sharing, Savings,
401K, etc...which reward an Employee for long service with an
Employer. Involve a longer probationary period since viewed as a
reward - not a disadvantage for long-term employees.
Impact of making a plan Contributory on Employee Participation
(Mod 1.5) -correct answer -->>Impacts group as a whole - not
everyone will elect due to cost. If participation is mandatory in a
contributory plan, may create employee relations problem.
VERIFIED ANSWERS RATED A+ 2025
Broad view of Employee Benefits (Mod 1.1) -correct answer --
>>Considers Employee Benefits to be virtually any form of
compensation other than direct wages paid to Employees (Ex:
WC, Unemployment, State DI, SS, Vacation, Holidays,
401K/Retirement, Employer share of Medical, Severance Pay,
Child Care, etc..)
Narrow view of Employee Benefits (Mod 1.1) -correct answer
-->>Any type of plan sponsored or initiated by Employees and
Employers and engaged in providing benefits that result from the
employment relationship and that are not underwritten or paid
directly by the government; (Ex: Benefits excluded include those
legally mandated - WC, SS).
Impact of Labor Unions on Employee Benefits (Mod 1.2) -
correct answer -->>Through Collective Bargaining, Employee
Benefit Plans have been impacted. In 1948 ruling states that the
duty to bargain in good faith over wages also included insurance
and fringes (pension). In WW Cross & Co, NLRB ruled wages
included health and accident plan.
What is the Taft-Hartley Act? (Mod 1.2) -correct answer --
>>The Labor Management Relations Act of 1947 is a United
States federal law that restricts the activities and power of labor
unions. This set forth good-faith collective bargaining over wages,
hours, terms of employment and benefits.
3 Examples of Tax Advantages of Employee Benefit Plans (Mod
1.2) -correct answer -->>1: Employer Contributions are Tax
Deductible
,2: Employer Contributions are not considered income to
Employees
3: Certain Retirement Benefits Accumulate Tax-Free until
distributed.
Examples of Questions that should be addressed when creating
benefit objectives (Mod 1.3) -correct answer -->>Ex: What
benefits should be provided? Who should be covered? Should
Employees have options? How should plan be financed? How
should plan be administered? How should plan be communicated
to Employees?
What is the Functional Approach to Employee Benefit Planning?
(Mod 1.4) -correct answer -->>Application of a systematic
method of analysis to an Employer's Total Employee Benefits
Program. It analyzes the organization's EBP as a whole in terms
of its ability to meet various employee's needs and to manage
loss exposures within the overall compensation goals and
parameters.
Why is the Functional Approach appropriate when planning,
designing and administering Employee Benefits? (Mod 1.4) -
correct answer -->>1: EE Benefits Significant Element of EE
Comp and are a Tax-Effective Way to Compensate
2: EE Benefit Represent Large Labor Cost, so ER's should
effectively plan/cost-control
3: In the past, EE Benefits were adopted on piece-meal basis;
helps to now fill gaps/overlap
4: Systematic Approach to planning helps to keep the EBP
current, competitive and in compliance with updated requirements
(ACA)
5: Benefits to be integrated properly together
,Compare Compensation/Service Oriented Benefit Philosophy with
the Needs-Oriented (Mod 1.4) -correct answer --
>>Compensation/Service: EBP comprised of primarily
compensation, service or both. Level of benefits tied to salary or
pay levels/years of service
Needs Orientated: Focuses on Needs of EE's and their
dependents
Identify Steps in Applying Functional Approach (Mod 1.4) -
correct answer -->>1: Classify EE/Dep Needs & Objectives
(in logical/functional categories)
2: Classify Categories of EE's to be protected
3: Analyze present benefits in terms of functional categories of
needs/objectives, persons to benefit, and regulatory requirements
4: Determine any gaps or overlap in benefits from all sources in
terms of functional categories of needs & the persons to be
protected
5: Consider recommendations for changes
6: Estimate costs/savings from each recommendation
7: Evaluate alternative methods of financing for those
recommended benefits (and existing ben)
8: Consider other cost-saving techniques
9: Decide upon appropriate benefits and methods of financing as
a result of analysis
10: Implement Changes
11: Communication Changes to Employees
12: Periodically re-evaluate EBP
Define Needs/Exposures covered under EBP (Mod 1.4) -correct
answer -->>1: Medical Expenses (EE/Dep)
2: Losses due to Disability (Short/Long Term)
3: Death (EE/Dep/Retirees)
4: Retirement Needs
, 5: Capital Accumulation Needs/Goals
6: Needs for Unemployment/Layoff/Termination
7: Needs for Financial/Retirement Counseling
8: Losses from property/liability exposures
9: Needs for Dependent Care Assistance
10: Needs for Educational Assistance (EE/Dep)
11: Needs for Custodial-Care Expenses (LTC)
12: Other Needs/Goals (Stock Purchase Plan)
Explain Concept of Replacement Ratio in terms of creating
Retirement/Disability Plans (Mod 1.5) -correct answer -->>A
Replacement Ratio is a person's gross income after retirement,
divided by his or her gross income before retirement. Should
include SS, capital accumulation benefits as well as retirement
plans.
Define Protection-Oriented Benefits (Mod 1.5) -correct answer
-->>Consist of Medical Expense Benefits, Life/STD/LTD
Insurance - protect against serious loss exposures that could spell
immediate financial disaster. As such, they have a relatively short
probationary period due to the need of immediate coverage.
Define Accumulation-Orientated Benefits (Mod 1.5) -correct
answer -->>Consist of Pension Plans, Profit-Sharing, Savings,
401K, etc...which reward an Employee for long service with an
Employer. Involve a longer probationary period since viewed as a
reward - not a disadvantage for long-term employees.
Impact of making a plan Contributory on Employee Participation
(Mod 1.5) -correct answer -->>Impacts group as a whole - not
everyone will elect due to cost. If participation is mandatory in a
contributory plan, may create employee relations problem.
