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CEBS - GBA 1 Module 1 Exam/23 Questions with Answers
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CEBS - GBA 1 Module 1 Exam/23Questions with Answers
1.1 Distinguish between the broad view and the narrow view of employee
benefits - -The broad view defines employee benefits as anything other than
direct compensation, including both government-mandated benefits and
private plans. (social security, pension plans etc.). The narrow view holds
that employee benefits are any benefit sponsored unilaterally or jointly by
employers and employees that is not subsidized by the government.
-1.2 List the categories of benefits that generally are considered to fall
under a broad view employee benefits - -• Legally required benefits (Social
Security)
• Payment for time not worked (rest, lunch, vacation, and holidays)
• Medical
• Retirement & savings plan payments
• Miscellaneous benefits (employee discounts, severance pay, education,
and child care)
-1.3 What benefits are typically excluded when the term "employee
benefits" is viewed and defined in a narrow sense? - -Those that are legally
mandated (Social Security and workers' compensation)
-2.1 Explain the types of businesses- or human resource-related reasons for
firms establishing employee benefit plans - -So businesses may attract &
retain capable employees. Good benefit plans foster corporate efficiency,
productivity, and improve employee morale.
-2.2 What impact have labor unions historically had in employee benefits? -
-Through the practice of collective bargaining labor unions have had an
impact on the growth of employee benefit plans. In 1948 the NLRB ruled in
the Inland Steel case that the duty to bargain in good faith over wages also
included insurance and fringes such as pension benefits. Following that, in
the W.W. Cross & Co. case, the NLRB ruled that wages included health and
accident plan.
-2.3 Explain the significance of the Taft-Hartley Act in employee benefit
planning. - -The Labor-Management Relations Act, also called the Taft-
Hartley Act, sets forth the framework for good-faith collective bargaining
over wages, hours, conditions and terms of employment and employee
benefits. It established the distinction between retirement benefits and
welfare benefits. It also provides framework for administration of those
benefits. It's the legal basis on which jointly trusteed benefit plans are
founded.
, -2.4 Summarize three major federal tax advantages associated with
employee benefit plans. - -• Most contributions are deductible as long as
they are reasonable business expenses
• Within limits, the contributions are not considered income to employees
• In certain retirement/capital plans, benefits accumulate tax-free until
dispersed
-2.5 Why is the employee benefit mechanism an effective and efficient way
of providing insurance coverage? - -It is convenient for employees as they
do not have to search for individual coverage and it is generally less
expensive. Providers state it is easier to communicate employee benefits
through an employer.
-3.1 What is the starting point in the design of any employee benefit plan? -
-Any employee benefit plan should start with setting overall objectives from
the standpoints of both the employer and the employees.
-3.2 List the types of overall questions that should be addressed in setting
benefit objectives. - -• What benefits should be provided?
o Benefits provide under both government programs and for the individual
employees should be considered
• Who should be covered by the benefit plan?
o Besides full-time employees, part-time, retirees, dependents of employees,
and survivors of deceased employees. All of which must adhere to all
governmental regulations.
• Should employees have benefit options?
o Due to changing workforce this question has assumed great prominence.
With the growth of flexible or cafeteria plans, employee choice is inevitable.
• How should the benefit plan be financed?
o A few factors should be decided first before answering this question:
♣ Is employer financing all costs?
♣ Or is it a shared approach with employees? If so, what percentage?
• How should the benefit plan be administered?
o Should the firm itself administer the plan? Should insurance carrier or other
benefit plan provider? Should outside organization such as a third-party
administrator (TPA) do this work?
• How should the benefit plan be communicated?
o Effective communication is vital to success of benefit plan.
-4.1 What is the functional approach to employee benefit planning? - -The
functional approach essentially is a systematic approach to an employer's
total employee benefits program
-4.2 Describe the reasons that the functional approach is considered to be
an appropriate approach for the effective planning, designing and
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