CEBS GBA Exam 1 Questions With
Correct Answers
Broad |view |of |Employee |Benefits |(Mod |1.1) |- |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) |- |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) |- |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) |- |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) |- |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) |- |
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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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.
Describe |arguments |of |flexibility |in |designing |employee |benefit |plans |as |it |relates |to |functional
|approach |(Mod |1.5) |- |ANSWER✔✔✔-Argument |1: |More |flexibility |EE |has, |more |likely |he |or |
she |will |select |a |benefit |that |best |meets |needs/goals |- |thus, |flexibility |in |plan |design/options |
facilitates |functional |approach.
Argument |2: |Works |against |functional |approach |because |some |EE's |may |not |recognize |all |their
|needs |and |leave |some |uncovered.
Define |concept |of |risk |(Mod |2.1) |- |ANSWER✔✔✔-Uncertainty |with |respect |to |possible |losses. |
Inability |to |determine |with |certainty |the |actual |number |and |value |of |claims.
Define |relationship |between |peril |and |hazard |(Mod |2.1) |- |ANSWER✔✔✔-Peril: |Cause |of |a |loss
|(fires, |floods, |theft, |death)
Correct Answers
Broad |view |of |Employee |Benefits |(Mod |1.1) |- |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) |- |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) |- |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) |- |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) |- |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) |- |
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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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) |- |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.
Describe |arguments |of |flexibility |in |designing |employee |benefit |plans |as |it |relates |to |functional
|approach |(Mod |1.5) |- |ANSWER✔✔✔-Argument |1: |More |flexibility |EE |has, |more |likely |he |or |
she |will |select |a |benefit |that |best |meets |needs/goals |- |thus, |flexibility |in |plan |design/options |
facilitates |functional |approach.
Argument |2: |Works |against |functional |approach |because |some |EE's |may |not |recognize |all |their
|needs |and |leave |some |uncovered.
Define |concept |of |risk |(Mod |2.1) |- |ANSWER✔✔✔-Uncertainty |with |respect |to |possible |losses. |
Inability |to |determine |with |certainty |the |actual |number |and |value |of |claims.
Define |relationship |between |peril |and |hazard |(Mod |2.1) |- |ANSWER✔✔✔-Peril: |Cause |of |a |loss
|(fires, |floods, |theft, |death)
