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ISCEBS Fellow practice questions

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Question 1Health benefits

Under the ACA, a group health plan must extend dependent coverage to an employee's adult children up to which age, regardless of student status or marital status?

  1. Age 19
  2. Age 26 Correct answer.
  3. Age 30
  4. Age 23

Explanation

The ACA requires non-grandfathered group health plans offering dependent coverage to make it available to adult children until they turn 26. Student status, residency, financial dependency, and marital status cannot be used to deny this coverage.

Question 2Health benefits

A self-funded employer plan wants to avoid state insurance mandates. Which federal statute primarily allows this by preempting state laws that relate to employee benefit plans?

  1. ERISA Correct answer.
  2. COBRA
  3. GINA
  4. HIPAA

Explanation

ERISA's preemption provision generally supersedes state laws that relate to employee benefit plans, which is why self-funded plans are largely exempt from state insurance mandates. States regulate insured arrangements through their insurance codes, but self-funded plans escape that regime.

Question 3Health benefits

An employer with 60 full-time employees sponsors a group health plan. Which COBRA rule applies to this employer?

  1. COBRA applies, but continuation is limited to 6 months
  2. COBRA applies, and the maximum continuation period for most qualifying events is 18 months Correct answer.
  3. COBRA applies only to insured plans, not self-funded plans
  4. COBRA does not apply because the employer has fewer than 100 employees

Explanation

COBRA generally applies to employers with 20 or more employees, and the standard maximum continuation period is 18 months for termination or reduction in hours. Other qualifying events can extend coverage to 29 or 36 months.

Question 4Health benefits

Which statement best describes the HIPAA portability rule on preexisting condition exclusions for group health plans?

  1. Plans may not impose preexisting condition exclusions on any enrollee, and must credit prior creditable coverage Correct answer.
  2. Plans may impose a 12-month exclusion on any new enrollee regardless of prior coverage
  3. Plans may impose exclusions only for conditions diagnosed within 30 days of enrollment
  4. Plans may impose exclusions only on late enrollees with no prior creditable coverage

Explanation

The ACA eliminated preexisting condition exclusions for group health plans, and HIPAA's portability rules require crediting prior creditable coverage. The combination means plans cannot impose such exclusions and must recognize prior coverage.

Question 5Health benefits

A plan uses a health reimbursement arrangement (HRA) integrated with group medical coverage. Which design feature distinguishes an HRA from a health savings account (HSA)?

  1. HRA funds are employer-owned and generally forfeited at termination, while HSA funds are employee-owned and portable Correct answer.
  2. HRA contributions must be made by the employee, while HSA contributions must be made by the employer
  3. HRA funds must be held in a trust, while HSA funds may be held in a bank account
  4. HRA contributions are taxable to the employee, while HSA contributions are tax-free

Explanation

An HRA is an employer-funded, employer-owned account; unused balances typically revert to the employer on termination. An HSA is owned by the employee and remains portable, which is a core structural difference.

Question 6Health benefits

For 2024, an individual with self-only HDHP coverage may contribute up to which HSA amount (excluding the catch-up contribution)?

  1. $6,900
  2. $8,300
  3. $3,050
  4. $4,150 Correct answer.

Explanation

The 2024 HSA self-only contribution limit is $4,150, with a $1,000 catch-up for those 55 and older. Family coverage carries a higher limit, and the HDHP minimum deductible and out-of-pocket maximum are indexed separately.

Question 7Health benefits

A plan's summary plan description (SPD) must generally be furnished to participants within what timeframe after they become covered?

  1. 90 days Correct answer.
  2. 30 days
  3. 60 days
  4. 120 days

Explanation

ERISA requires the SPD to be furnished within 90 days after a participant becomes covered, or within 120 days after the plan is established. Updated summaries of material modifications must be provided within 60 days of adoption.

Question 8Health benefits

An employer offers a wellness program that imposes a premium surcharge on employees who do not meet a biometric target. Under HIPAA's wellness rules, which requirement applies to this outcomes-based program?

  1. The reward must be reasonably designed, voluntary, and offer a reasonable alternative standard Correct answer.
  2. The program must be available to all employees regardless of health status with no alternative
  3. The reward must be limited to 5 percent of the cost of coverage
  4. The program must be administered by the health insurer rather than the employer

Explanation

Outcomes-based wellness programs under HIPAA must be reasonably designed to promote health, voluntary, and offer a reasonable alternative standard for those who cannot meet the target. The reward limit is 30 percent of the cost of coverage, higher for tobacco-related programs.

Question 9Health benefits

Which federal law prohibits group health plans from discriminating based on genetic information, including family medical history?

  1. ADEA
  2. ADA
  3. FMLA
  4. GINA Correct answer.

Explanation

The Genetic Information Nondiscrimination Act restricts group health plans and insurers from using genetic information for underwriting or eligibility. It also bars employers from requesting genetic information, with limited exceptions.

Question 10Health benefits

A self-funded plan wants to cap annual benefits at $250,000 per participant. Under the ACA, which rule governs this design?

  1. Annual dollar limits are permitted only for grandfathered plans
  2. Annual dollar limits are permitted up to $1 million
  3. Annual dollar limits are prohibited for essential health benefits Correct answer.
  4. Annual dollar limits are permitted if the plan is self-funded

Explanation

The ACA prohibits annual dollar limits on essential health benefits for non-grandfathered plans in the individual and small group markets, and for self-funded and large group plans as well. Lifetime dollar limits on EHBs are also prohibited.

Question 11Health benefits

Which statement accurately describes the ACA's medical loss ratio (MLR) requirement for the individual and small group markets?

  1. Insurers must maintain an MLR of exactly 100 percent
  2. Insurers must spend at least 80 percent of premium on clinical services and quality, or issue rebates Correct answer.
  3. Insurers must spend at least 50 percent of premium on clinical services with no rebate requirement
  4. Insurers must spend at least 85 percent of premium on administrative costs

Explanation

In the individual and small group markets, the MLR threshold is 80 percent, and insurers must rebate the difference to enrollees if they fall short. The large group threshold is 85 percent.

Question 12Health benefits

An employee experiences a qualifying event and elects COBRA. Which statement about premium payments is accurate?

  1. The employee pays nothing during the COBRA period
  2. The employer may charge up to 102 percent of the applicable premium Correct answer.
  3. The employer must continue paying the full premium
  4. The employer may charge up to 150 percent of the applicable premium

Explanation

COBRA permits the plan to charge up to 102 percent of the applicable premium to cover administrative costs. A 150 percent charge is allowed only during the 11-month disability extension.

Question 13Health benefits

Which ACA provision requires non-grandfathered plans to cover preventive services without cost sharing?

  1. The Cadillac tax
  2. The employer mandate
  3. The preventive services requirement referencing USPSTF, HRSA, and ACIP recommendations Correct answer.
  4. The auto-enrollment provision

Explanation

The ACA requires non-grandfathered plans to cover certain preventive services with no cost sharing when delivered in-network. The requirement references recommendations from the USPSTF, HRSA, and ACIP.

Question 14Health benefits

An employer's plan uses a network of providers and offers out-of-network benefits subject to a deductible. Which term describes the maximum a participant pays out of pocket for in-network covered services before the plan pays 100 percent?

  1. Copayment
  2. Deductible
  3. Out-of-pocket maximum Correct answer.
  4. Coinsurance

Explanation

The out-of-pocket maximum caps the participant's cost sharing for covered in-network services; once reached, the plan generally pays 100 percent. It differs from the deductible, which is the amount paid before the plan begins sharing costs.

Question 15Health benefits

A plan applies a separate deductible to mental health services that is higher than the deductible for medical/surgical services. Which law is most directly implicated?

  1. USERRA
  2. COBRA
  3. ERISA reporting rules
  4. Mental Health Parity and Addiction Equity Act Correct answer.

Explanation

MHPAEA requires that financial requirements and treatment limitations for mental health and substance use disorder benefits be no more restrictive than the predominant requirements applied to substantially all medical/surgical benefits. A higher separate deductible generally violates parity.

Question 16Health benefits

Which statement best describes the ACA's employer shared responsibility provision for an applicable large employer?

  1. Employers must offer coverage to all employees or pay a penalty regardless of affordability
  2. Employers with 50 or more full-time equivalents may owe a penalty if they fail to offer minimum essential coverage to full-time employees or if coverage is unaffordable Correct answer.
  3. Only self-funded employers are subject to the employer mandate
  4. Employers with 10 or more employees must offer coverage or pay a penalty

Explanation

The employer shared responsibility provision applies to applicable large employers, generally those with 50 or more full-time equivalents. Penalties can arise from failing to offer minimum essential coverage or from offering coverage that is unaffordable or lacks minimum value.

Question 17Health benefits

A retiree is enrolled in a group health plan when the employer terminates the plan entirely. Which COBRA concept applies to the retiree's coverage?

  1. The retiree is not a qualified beneficiary because retirees are excluded
  2. The retiree may elect COBRA for 18 months only
  3. The retiree may elect COBRA for up to 36 months if the plan termination is a qualifying event Correct answer.
  4. The retiree must enroll in Medicare immediately and cannot elect COBRA

Explanation

A retiree covered under a group health plan at the time of the employer's bankruptcy or plan termination may be a qualified beneficiary, and certain events allow up to 36 months of continuation. Retirees are not categorically excluded from COBRA.

Question 18Health benefits

Which design feature is characteristic of a consumer-directed health plan paired with an HSA?

  1. A low-deductible PPO with no account
  2. A closed HMO with capitation payments
  3. A high-deductible health plan with a tax-advantaged savings account Correct answer.
  4. An indemnity plan with first-dollar coverage

Explanation

A consumer-directed health plan typically pairs a high-deductible health plan with a tax-advantaged account such as an HSA. The combination shifts first-dollar spending to the member while providing tax benefits and portability.

Question 19Health benefits

An employer wants to offer a level-funded arrangement. Which statement best describes this funding approach?

  1. The employer purchases a fully insured policy with no claims experience
  2. The employer pays all claims as incurred with no fixed payments
  3. The employer pays fixed monthly amounts based on expected claims, with surplus returned if claims are lower than expected Correct answer.
  4. The employer self-funds with no stop-loss protection

Explanation

Level-funded arrangements combine fixed monthly payments with the possibility of a refund or credit if claims run below expectations. They typically include stop-loss protection to cap catastrophic claims.

Question 20Health benefits

Which statement about stop-loss insurance in a self-funded health plan is accurate?

  1. Specific stop-loss protects against large individual claims, while aggregate stop-loss protects against total claims exceeding a threshold Correct answer.
  2. Stop-loss insurance is prohibited for self-funded plans
  3. Stop-loss insurance replaces ERISA fiduciary duties
  4. Specific stop-loss protects total claims, while aggregate stop-loss protects individual claims

Explanation

Specific stop-loss attaches to individual claims above a deductible, while aggregate stop-loss attaches when total plan claims exceed a predetermined level. Both protect the employer's financial exposure in a self-funded arrangement.

Question 21Health benefits

Under HIPAA privacy rules, which situation generally requires a covered entity to obtain a valid authorization before disclosing protected health information?

  1. Disclosure to the plan sponsor for payment purposes
  2. Disclosure to a vendor for marketing purposes Correct answer.
  3. Disclosure to the participant's treating physician for treatment
  4. Disclosure required by law

Explanation

HIPAA requires written authorization for uses and disclosures not otherwise permitted, such as marketing communications. Treatment, payment, and operations disclosures generally do not require authorization.

Question 22Health benefits

Which statement about Medicare Secondary Payer rules for working aged employees is accurate?

  1. Employers with fewer than 20 employees must offer Medicare-like coverage
  2. Medicare always pays secondary regardless of employer size
  3. Medicare pays primary for active employees covered by a group health plan of any size
  4. A group health plan of an employer with 20 or more employees generally pays primary for active employees age 65 or older Correct answer.

Explanation

For employers with 20 or more employees, the group health plan generally pays primary for active employees age 65 and older, and Medicare pays secondary. For smaller employers, Medicare generally pays primary.

Question 23Health benefits

An employer adopts a Section 125 cafeteria plan. Which feature is essential to this arrangement?

  1. Employees must be taxed on all benefits elected
  2. Employees may elect between taxable cash and qualified benefits on a pre-tax basis Correct answer.
  3. Employers must contribute the full cost of all benefits
  4. Employees may change elections at any time for any reason

Explanation

A cafeteria plan allows employees to choose between cash and qualified benefits on a pre-tax basis, providing tax advantages. Elections are generally irrevocable during the plan year absent a permitted status change.

Question 24Health benefits

A plan sponsor is evaluating whether to offer a health flexible spending arrangement (FSA). Which statement about the use-or-lose rule is accurate?

  1. FSA contributions are taxable to the employee
  2. Plans may offer a carryover of up to a set dollar amount or a grace period, but not both, to soften forfeiture Correct answer.
  3. Unused FSA balances are always refunded to the employee in cash
  4. Unused FSA balances automatically roll into an HSA

Explanation

Health FSAs generally follow a use-or-lose rule, but plans may adopt a carryover of a limited dollar amount or a grace period, but not both. This softens forfeiture while preserving the tax advantage.

Question 25Health benefits

A large employer's plan uses a reference-based pricing model for certain procedures. Which statement best describes the primary compliance concern?

  1. The plan is exempt from ERISA fiducary duties
  2. The plan may violate the ACA's prohibition on annual limits
  3. The plan may face balance-billing exposure for members and must address provider reimbursement disputes Correct answer.
  4. The plan must eliminate all cost sharing

Explanation

Reference-based pricing sets reimbursement at a benchmark, which can leave members exposed to balance billing when providers bill above that amount. Plans must manage provider disputes and member protections, along with applicable disclosure requirements.

Question 26Health benefits

Under the ACA, a non-grandfathered group health plan must extend dependent coverage to an employee's adult child until the child reaches what age, regardless of the child's marital or student status?

  1. Age 21
  2. Age 24
  3. Age 23
  4. Age 26 Correct answer.

Explanation

The ACA requires non-grandfathered plans that offer dependent coverage to make it available until the child turns 26, and marital status, residency, student status, and financial dependence no longer affect eligibility. Grandfathered group plans may exclude a child with access to other employer coverage until 2014 rules phase in, but the standard benchmark is age 26.

Question 27Health benefits

A self-funded employer plan covers 120 employees. Which statement describes its obligation under the ACA's internal claims and appeals rules?

  1. It must defer all appeals to the state insurance department
  2. It is exempt from internal appeals because self-funded plans are regulated only by ERISA
  3. It must maintain a full internal appeals process with at least two levels of review for adverse benefit determinations Correct answer.
  4. It may rely solely on the plan administrator's discretion without written appeal procedures

Explanation

Non-grandfathered group health plans, including self-funded ones, must maintain internal claims and appeals procedures that provide at least two levels of review for adverse benefit determinations and comply with the ACA's additional consumer protections. ERISA also imposes claims-procedure rules, so self-funding does not create an exemption.

Question 28Health benefits

A group health plan imposes a $500 annual limit on dental benefits but no limit on medical benefits. Which statement about this design under the ACA essential health benefits rules is accurate?

  1. The dental limit is permissible because dental benefits are generally outside the essential health benefits package for adults Correct answer.
  2. The dental limit is prohibited because all benefits must be unlimited
  3. The dental limit is permissible only if the plan is grandfathered
  4. The dental limit is prohibited unless the plan is fully insured

Explanation

The ACA's prohibition on annual dollar limits applies to essential health benefits. Adult dental benefits are generally not part of the EHB package, so a plan may impose a separate dollar limit on them, while medical EHB cannot be subject to annual dollar limits.

Question 29Health benefits

An employer with 75 full-time equivalent employees offers coverage but the plan's minimum value is 55 percent. Which consequence follows under the ACA employer shared responsibility rules?

  1. The employer is automatically exempt from the employer mandate
  2. The employer must convert to a fully insured arrangement
  3. The employer may owe an assessable payment if a full-time employee receives a premium tax credit through the Marketplace Correct answer.
  4. The employer owes no payment because coverage was offered

Explanation

An applicable large employer that offers coverage must offer minimum value (at least 60 percent actuarial value) and affordable coverage to avoid a potential assessable payment when a full-time employee obtains a premium tax credit. Offering a plan below 60 percent minimum value does not satisfy the requirement.

Question 30Health benefits

An employer wants to reimburse employees tax-free for individual market premiums through a stand-alone arrangement. Which statement about this design is accurate?

  1. The arrangement is permitted only for employers with fewer than 50 employees
  2. The arrangement is permitted if the employer also offers a high-deductible plan
  3. The arrangement is generally treated as a group health plan that violates ACA market reforms and may trigger excise taxes Correct answer.
  4. The arrangement is permitted because reimbursements are taxable to employees

Explanation

IRS guidance treats employer payment plans that reimburse individual market premiums as group health plans that fail ACA market reform requirements, exposing employers to excise taxes under Code section 4980D. Small-employer exceptions generally do not apply to this arrangement.

Question 31Health benefits

A plan sponsor is drafting an SBC. Which content element is required?

  1. A summary of the plan's fiduciary insurance coverage
  2. A description of the covered benefits and cost-sharing, including a coverage examples section Correct answer.
  3. A list of all network providers with their credentials
  4. A copy of the plan's investment policy statement

Explanation

The Summary of Benefits and Coverage must use a prescribed template covering covered benefits, cost sharing, and coverage examples showing how the plan would pay for certain scenarios. Provider directories and fiduciary documents are not SBC components.

Question 32Health benefits

A plan's SBC must be provided to participants how often, in addition to at the time of application and enrollment?

  1. Only when benefits change
  2. Every five years
  3. Only upon written request
  4. At least 60 days before the beginning of each plan year Correct answer.

Explanation

The SBC must be furnished at application and enrollment and at least 60 days before the start of each new plan year. It must also be provided within seven days of a request and upon a material change in coverage.

Question 33Health benefits

An employer maintains a health reimbursement arrangement that is integrated with a group health plan. Which statement about the HRA is accurate?

  1. The HRA must be offered only to highly compensated employees
  2. The HRA may be funded through employee salary reductions
  3. The HRA must be integrated with other group coverage and cannot be a stand-alone arrangement for active employees Correct answer.
  4. The HRA may reimburse individual market premiums without restriction

Explanation

An HRA is an employer-funded account and cannot be funded through salary reduction. For active employees, it must be integrated with other group health coverage to comply with ACA market reforms; stand-alone HRAs are generally not permitted.

Question 34Health benefits

A plan uses a prescription drug formulary with four tiers. Which statement about tiering and cost sharing is accurate?

  1. Plans may set different cost sharing by tier, subject to any applicable out-of-pocket maximum limits Correct answer.
  2. Tier structure must be identical across all plans in a state
  3. Tiered cost sharing is prohibited under the ACA
  4. Generic drugs must always be subject to the highest cost sharing

Explanation

Plans commonly use tiered formularies with differing cost sharing, and those amounts count toward the ACA out-of-pocket maximum for EHB. The ACA does not prohibit tiering, though nondiscrimination and transparency rules may apply.

Question 35Health benefits

An employer maintains a self-funded plan with a $500,000 specific stop-loss deductible. A participant incurs $800,000 in claims. Which statement describes the stop-loss carrier's role?

  1. The carrier replaces the plan's obligation to participants
  2. The carrier assumes fiduciary responsibility for the plan
  3. The carrier reimburses claims above the deductible, subject to the policy terms Correct answer.
  4. The carrier pays all claims from the first dollar

Explanation

Specific stop-loss insurance reimburses the plan for claims exceeding the attachment point, subject to policy terms and exclusions. The plan remains responsible to participants and retains fiduciary responsibility.

Question 36Health benefits

A self-funded plan is considering a reference-based pricing arrangement. Which statement best describes the participant risk?

  1. Participants may face balance billing when providers bill above the reference price Correct answer.
  2. The arrangement eliminates the need for an out-of-pocket maximum
  3. Participants are guaranteed in-network rates at all providers
  4. Providers are required by federal law to accept the reference price

Explanation

Reference-based pricing sets a payment ceiling, and providers may bill the difference to participants, creating balance-billing exposure. Plans often add protections, but the risk remains a key design consideration.

Question 37Health benefits

A group health plan covers 60 employees and offers a level-funded arrangement. Which statement best describes this funding approach?

  1. The employer transfers all risk to an insurance carrier with no refund possibility
  2. The employer self-funds with no stop-loss protection
  3. The employer pays claims only as incurred with no fixed monthly amount
  4. The employer pays fixed monthly amounts that include claims funding, administration, and stop-loss, with a possible surplus refund Correct answer.

Explanation

Level-funded arrangements combine fixed monthly payments for expected claims, administration, and stop-loss, and may return a surplus if claims are lower than projected. They offer some self-funding economics with more predictable cash flow.

Question 38Health benefits

An employer wants to offer a health savings account. Which requirement must be met for employees to contribute?

  1. The employee must be enrolled in Medicare
  2. The employee must be covered by a low-deductible PPO
  3. The employee must be covered by a qualifying high-deductible health plan and have no disqualifying coverage Correct answer.
  4. The employee must have a health FSA with a general-purpose carryover

Explanation

HSA eligibility requires coverage under a qualifying HDHP, no disqualifying coverage such as Medicare or a general-purpose health FSA, and no other impermissible coverage. The HDHP must meet the statutory minimum deductible and maximum out-of-pocket limits.

Question 39Health benefits

A participant in a health FSA terminates employment mid-year. Which statement about the FSA is generally accurate?

  1. The participant may always carry over the full unused balance to a new employer's FSA
  2. The participant may convert the balance to an HSA without restriction
  3. The plan may permit continued coverage through COBRA, but the participant may forfeit unused balances if the plan does not offer a carryover or grace period Correct answer.
  4. The participant is entitled to a cash refund of unused contributions

Explanation

Health FSAs are subject to the use-it-or-lose-it rule unless the plan adopts a carryover or grace period, and terminating employees generally cannot take unused balances as cash. COBRA continuation may be available but does not create a refund right.

Question 40Health benefits

A plan sponsor wants to add a telemedicine benefit. Which statement about coverage and cost sharing is accurate?

  1. The plan may set cost sharing for telemedicine, but it must be applied consistently with the plan's other benefits and applicable parity rules Correct answer.
  2. Telemedicine benefits are exempt from the out-of-pocket maximum
  3. Telemedicine must always be covered with no cost sharing
  4. Telemedicine is prohibited for self-funded plans

Explanation

Telemedicine is a plan design choice, and cost sharing may apply, subject to the plan's general rules and any applicable parity or state mandates. Amounts paid for EHB count toward the out-of-pocket maximum.

Question 41Health benefits

A plan uses a prior authorization requirement for certain surgeries. Which statement about this requirement is accurate?

  1. The plan must disclose the requirement and provide a process for adverse benefit determinations that includes appeal rights Correct answer.
  2. Prior authorization is prohibited for all surgical procedures
  3. Prior authorization decisions are not subject to internal appeals
  4. Prior authorization may be applied retroactively without notice

Explanation

Utilization management tools such as prior authorization are permitted if disclosed and administered consistently with claims-procedure rules, including appeal rights for adverse determinations. Retroactive application without notice raises compliance concerns.

Question 42Health benefits

An employer's plan covers 200 employees and is fully insured. Which statement about the ACA's medical loss ratio rebate is accurate?

  1. The insurer must generally spend a minimum percentage of premium on clinical services and quality, or pay rebates to enrollees Correct answer.
  2. The MLR requirement applies only to Medicare Advantage plans
  3. The employer must pay rebates directly to employees regardless of insurer action
  4. The MLR requirement applies only to self-funded plans

Explanation

In the large group market, insurers must generally meet an 85 percent MLR or pay rebates; the small group and individual markets use 80 percent. Rebates flow through the insurer and are distributed according to applicable rules.

Question 43Health benefits

A participant receives an adverse benefit determination from a non-grandfathered plan. Which statement about external review is accurate?

  1. External review requires the participant to file a lawsuit first
  2. The participant may request an independent external review after exhausting internal appeals, generally within four months of the final adverse determination Correct answer.
  3. External review is limited to claims exceeding $100,000
  4. External review is available only for grandfathered plans

Explanation

Non-grandfathered plans must provide external review of adverse benefit determinations after internal appeals are exhausted, with a typical four-month filing window. External review is independent of litigation and does not have a claim-value threshold.

Question 44Health benefits

A group health plan wants to impose a 12-month waiting period before coverage begins for new employees. Which statement about this design is accurate?

  1. Waiting periods are permitted only for grandfathered plans
  2. A waiting period of more than 90 days is generally prohibited for group health plans under the ACA Correct answer.
  3. Waiting periods are prohibited entirely
  4. Waiting periods of any length are permitted

Explanation

The ACA generally prohibits waiting periods exceeding 90 days for group health plans. Plans may use a 90-day or shorter waiting period, but a 12-month period would violate the rule.

Question 45Health benefits

A plan sponsor is evaluating a wellness program that includes a health risk assessment with a financial incentive. Which statement about the ADA and GINA interaction is accurate?

  1. The program may require disclosure of genetic information to receive an incentive
  2. The program is exempt from ADA requirements if it is voluntary
  3. The program may impose unlimited penalties on employees who decline participation
  4. The program must be reasonably designed to promote health and safety and must protect the confidentiality of medical information Correct answer.

Explanation

Wellness programs involving disability-related inquiries or medical examinations must be reasonably designed to promote health and safety, be voluntary, and protect confidentiality. GINA separately restricts collection of genetic information.

Question 46Health benefits

A plan covers mental health and substance use disorder benefits. Which statement about parity compliance is accurate?

  1. Parity prohibits any prior authorization for MH/SUD benefits
  2. Financial requirements and treatment limitations applied to MH/SUD benefits must be no more restrictive than the predominant requirements applied to medical/surgical benefits in the same classification Correct answer.
  3. Parity applies only to fully insured plans
  4. Parity requires identical benefits for every diagnosis

Explanation

MHPAEA requires that financial requirements and treatment limitations for mental health and substance use disorder benefits be no more restrictive than the predominant requirements applied to substantially all medical/surgical benefits in the same classification. Nonquantitative treatment limitations are also subject to comparative analysis.

Question 47Health benefits

An employer maintains a cafeteria plan. Which statement about qualified benefits is accurate?

  1. The plan may allow employees to pay premiums on a pre-tax basis through salary reduction Correct answer.
  2. The plan may discriminate in favor of highly compensated employees without consequence
  3. The plan may reimburse individual market premiums tax-free
  4. The plan may permit deferral of compensation beyond the plan year

Explanation

A cafeteria plan permits employees to elect qualified benefits, such as group health premiums, on a pre-tax salary reduction basis. Deferred compensation is not a permitted benefit, and nondiscrimination rules apply.

Question 48Health benefits

A participant in a high-deductible health plan with an HSA wants to contribute the family maximum for the year. Which statement about HSA contribution limits is accurate?

  1. The limit is doubled for employees over age 50
  2. Employer contributions are always taxable to the employee
  3. The limit applies only to employee contributions
  4. The combined employer and employee contributions cannot exceed the annual limit, with an additional catch-up contribution available to eligible individuals age 55 and older Correct answer.

Explanation

HSA contributions from all sources, employer and employee, are aggregated against the annual limit, and eligible individuals age 55 and older may make an additional catch-up contribution. Employer contributions are generally excludable from income.

Question 49Health benefits

A plan sponsor is reviewing its HIPAA privacy practices. Which statement about minimum necessary standards is accurate?

  1. Covered entities must make reasonable efforts to limit the use and disclosure of protected health information to the minimum necessary for the intended purpose, with exceptions for treatment and certain other activities Correct answer.
  2. Minimum necessary prohibits all disclosures to business associates
  3. Minimum necessary applies only to marketing communications
  4. Minimum necessary applies only to paper records

Explanation

The HIPAA minimum necessary standard requires reasonable efforts to limit PHI use and disclosure to what is needed for the purpose, with exceptions such as treatment, disclosures to the individual, and certain required disclosures. It applies to electronic and paper PHI.

Question 50Health benefits

A group health plan is subject to ERISA. Which statement about the plan's claims procedure is accurate?

  1. The plan may deny claims orally without written notice
  2. The plan may extend the appeal period indefinitely
  3. The plan must provide a written notice of adverse benefit determination with specific content, including the reason and appeal information Correct answer.
  4. The plan may delegate all fiduciary duties to participants

Explanation

ERISA claims procedures require written notice of adverse benefit determinations that includes the specific reason, plan provisions relied upon, and appeal information. Oral denials and indefinite appeal periods do not satisfy the regulation.