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Managing Flexible Benefits Quiz

Test Your Knowledge

Managing Flexible Benefits (Course B5)

Instructions: Choose an answer for each question and then click on the "Get Results" button at the end of the quiz.

1. Which of the following best defines cafeteria plans?
A. Written plans that allow employees to choose between cash and one or more qualified benefits
B. All of the tools available to the employer that may be used to attract, retain and motivate employees
C. Written plans that allow employees to choose from a limited number of benefits packages
D. Written plans that allow employees to choose between cash and one or more nonqualified benefits

2. Under which type of flexible benefits plan are employers more likely to provide employees with "flex credits" or "flex dollars" that are used to offset the cost of benefits?
A. Simple choice
B. Premium conversion
C. Flexible spending accounts
D. Full flex

3. Which of the following most accurately defines premium conversion plans?
A. They allow employees to choose from a limited number of benefits packages designed to accommodate the needs of varying demographic groups.
B. They allow employees to set aside money on a pre-tax basis to pay for eligible unreimbursed health expenses.
C. They provide employees with an allotment of flex dollars or credits with which to "purchase" benefits.
D. They allow employees to contribute on a pre-tax basis to any eligible employer-sponsored health or welfare plan.

4. What are the tax implications of flexible spending accounts?
A. Amounts set aside in employee accounts are free from federal income taxes and typically from state and local taxes.
B. Amounts set aside in employee accounts are tax free above 7.5% of employees' adjusted gross income.
C. Employers generally pay FICA on amounts set aside in employee accounts.
D. Employees pay FICA tax on premiums.

5. Which section of the Internal Revenue Code covers group term life insurance?
A. 79
B. 125
C. 401(k)
D. 501(c)(9)

6. Which of the following statements is most accurate regarding Section 125 plans?
A. An employee’s spouse or dependent can make selections at any time.
B. Self-employed and independent contractors are able to participate in the plan.
C. If benefits are self-insured, state insurance laws apply.
D. Elections are required prior to the beginning of the plan year, except for a change in status.

7. Which of the following best defines a hidden subsidy?
A. The amount of compensation an employee will receive if a given benefit is not selected.
B. The difference between the purchase price for a benefit and its actual cost to the employer.
C. The amount contributed by the employee through payroll deduction.
D. The actual full cost of a given benefit.

8. In the pricing process, what is considered to be the starting point for employers?
A. Identify and collect needed data
B. Estimate the cost of each flex option
C. Determine pricing for work-life benefits
D. Determine relationship between business objectives and HR strategy

The Test Your Knowledge questions are intended to provide a small sample of the information covered in a particular course. Passing this test should not be considered an indicator that you also will pass the related certification exam. No portion of this document may be reproduced in any form without express written permission from WorldatWork. Copyright 2005 WorldatWork.

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