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CEBS GBA Exam 1 Latest /232 Complete Questions And Answers Graded (A+)
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CEBS GBA Exam 1 Latest 2023 -2024 /232Complete Questions And Answers Graded (A+)
Quiz :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..)
Quiz :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).
Quiz :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.
Quiz :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.
Quiz :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.
Quiz :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?
Quiz :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.
Quiz :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
Quiz :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
Quiz :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
Quiz :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)
Quiz :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.
Quiz :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.
Quiz :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.
Quiz :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.
Quiz :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.
, Quiz :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.
Quiz :Define relationship between peril and hazard (Mod 2.1) - Answer :Peril:
Cause of a loss (fires, floods, theft, death)
Hazard: Condition that increases probability that a peril will occur or tends to
increase severity of loss when a peril occurs.
Quiz :Define physical hazard, moral hazard, morale hazard (Mod 2.1) - Answer
:Physical: Physical Condition (Defective Wiring, No Fire Extinguisher), increases
chance of loss
Moral: Dishonesty increases chance of loss (Arson)...b/c of Moral, premiums
are higher to all. Attempt to control by careful UW and provisions such as
deductibles, waiting periods, exclusions
Morale: Carelessness or Indifference by insureds since they have insurance
(protected from loss).
Quiz :How does pure risk differ from speculative risk (Mod 2.2) - Answer :Pure
Risk: Situations where two alternatives are possible - risk will happen (no loss)
or it will happen and a financial loss takes place. Many EB Coverages fall into
this classification. Nothing positive can result from Pure Risk, but many are
insured (Fire, Auto, Illness, Disability)
Speculative Risk: Involve a possibility (that is not present in pure risk) of a gain.
Three potential outcomes: Loss, No Loss, Gain (Ex: Purchase Stock, Gambling)
Quiz :Most Important Type of Pure Risk (Mod 2.2) - Answer :Personal Risk
(Death, Illness, DI, Unemployment)
Quiz :Summarize Methods for Handling Risk (Mod 2.2) - Answer :1: Avoidance
- does not take on risk/gets rid of
2: Control - attempts to prevent or reduce the probability/severity of a loss
taking place
3: Retention - risk is assumed and paid for by the person suffering the loss
4: Transfer - one shifts the financial burden of risk to another party
5: Insurance - form of transfer which the financial burden is transferred to
insurance company
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