M1: Quizzes Flashcards
Complete
The health care reform law calls for providing an SBC to applicants and enrollees. The proposed regulations interpret the limitation as
double-sided pages.
A. two
B. six
C. ten
D. four
D. four
The DOL defines a ______ ________ in a health plan as any modification or change that incorporates the following:
- Eliminates benefits payable under the plan
- Reduces benefits payable under the plan (for example, from a change in formulas, methodologies, or schedules that serve as the basis for benefit determinations)
- Increases deductibles, copayments, or other amounts paid by a participant
A. summary modification
B. material reduction
C. reverse clawback
D. actuarial reduction
B. material reduction
_______ issued a safe harbor rule, meaning that plans are not required to comply with its conditions. However, compliance ensures that the plan’s electronic delivery method is found to be acceptable.
A. The IRS
B. The DOL
C. The PBGC
D. The FTC
B. The DOL
______ ______, including participant contributions, may be used only to pay plan benefits and reasonable administration costs.
A. Plan forfeitures
B. Investment income
C. Material modifications
D. Plan assets
D. Plan assets
______ is the main federal statute that provides the regulatory framework for private pension plans and employee welfare benefit plans.
A. The PPACA
B. The PBGC Act
C. ERISA
D. GINA
C. ERISA
A plan established and maintained for employees that is exempt from taxes under the IRS code section 501 is a ________ plan.
A. Church
B. MEPP
C. Association
D. Cafeteria
A. Church
If a plan is intended to be exempt, the DOL warns that ______ regulations do not allow employers to pay an employee’s premium while the employee is out.
A. FLSA
B. FMLA
C. FASB
D. IRS
B. FMLA
The term _____ has been interpreted broadly to include employees in, or reasonably expected to be, and currently covered employment.
A. Beneficiary
B. Dependent
C. Fiduciary
D. Participant
D. Participant
A _____ must be furnished automatically to participants when a plan is amended.
A. Form 5500
B. SPD
C. Investment policy statement
D. SMM
D. SMM
A ________ bond must be purchased to cover every person who handles plan funds.
A. Fidelity
B. Board
C. plan
D. fiduciary
A. Fidelity
A(n) _______ is a planned document that supplements an insurance companies certificate of coverage or insurance contract with the missing ERISA provisions.
A. Open plan document
B. Closed planned document
C. Wrapper plan document
D. Circular plan document
C. Wrapper plan document
All of the following are correct regarding acceptable methods of distributing required ERISA disclosure documents, except:
A. In-hand delivery to employees
B. First-class mail
C. Second or third-class mail, but return in forwarding postage is not guaranteed
D. Inclusion in a union or company publication, but only if certain requirements are met
C. Second or third-class mail, but return in forwarding postage is not guaranteed
(postage must be guaranteed)
If a summary plan description (SPD ) is not provided to a plan participant within 30 days of a written request, the plan administrator may be charged up to $____ per day.
A. $100
B. $210
C. $150
D. $110
D. $110
The Employee Retirement Income Security Act (ERISA), the regulatory framework for private plans as well as employee benefit plans, was enacted into legislation in ____.
A. 1969
B. 1980
C. 1974
D. 1976
C. 1974
When there is a discrepancy between the plan document and the summary plan description (SPD), courts have often ruled that the _____ terms will be enforced if they are more beneficial to the plans participants.
A. Plan document
B. SBC
C. SMM
D. SPD
D. SPD
Which of the following ERISA amendments expanded the availability of fiduciary investment advice to participants in 401K type plans and individual retirement accounts (IRA’s), removed impediments to automatic enrollment through qualified default investment alternatives, and increase the transparency of pension plan funding through new notice requirements?
A. 1986 - Tax Reform Act P.L. 99-514
B. 2006 - Pension Protection Act P.L. 109-280
C. Omnibus Budget Reconciliation Act P.L. 101-508
D. 1984 Retirement Equity Act P.L. 98-397
B. 2006 - Pension Protection Act P.L. 109-280
All of the following are types of plans that are not covered under ERISA, except:
A. Governmental plans
B. Church plans
C. Medical plans
D. Plans maintained to comply with state laws on workers compensation, unemployment, or mandated disability insurance
C. Medical plans
A Summary of Benefits Coverage (SBC) must be presented in several ways. All the following are true about it, except:
A. It must be presented in a uniform format
B. It must utilize terminology understandable by the average plan participant
C. It must not exceed 5 pages
D. It must not include prints smaller than 12 point font
C. It must not exceed 5 pages
(can’t exceed 4 pages - front and back)
For a voluntary benefit arrangement to be exempt from ERISA based on the DOL safe harbor rule, all the following are requirements, except:
A. Participation is completely voluntary
B. Employer endorsement
C. No employer contributions
D. No employer consideration except for reasonable compensation for administration
B. Employer endorsement
A new SPD should provided at least every ____ years.
A. 2
B. 5
C. 10
D. 6
C. 10
If there has not been a material change in the plan, a new SPD must be distributed to plan participants every five years.
A. True
B. False
B. False
10 years
The plan, fund, or program is established or maintained by the employer.
A. True
B. False
A. True
A clearly worded SPD is an important line of defense for employers in benefit disputes.
A. True
B. False
A. True
A plan maintained outside the United states primarily for non-resident aliens is subject to ERISA requirements.
A. True
B. False
B. False
In order for a voluntary benefit arrangement to be exempt from ERISA based on the DOL safe harbor, one of the requirements is that the employer or the employees organization can make contributions.
A. True
B. False
B. False
Criminal penalties may be imposed on any individual or company that willfully violates any requirement of Title 1 of ERISA, which includes disclosure rules. The penalty per conviction could be $150,000 and or imprisonment for up to five years.
A. True
B. False
B. False
$100,000 and 10 years
The Summary of Benefits Coverage (SBC) requirement for health plans do not require the addition of ERISA SPD and SMM requirements.
A. True
B. False
B. False
(it is in addition to)
Participants and beneficiaries may bring a civil action in a state District Court to enforce any provision of ERISA.
A. True
B. False
B. False
Employers are required to keep sufficiently detailed information and data necessary to verify, explain, clarify, or check on documents for accuracy and completeness including vouchers, worksheets, receipts, and applicable resolutions. Records must be maintained for six years for ERISA purposes, but other laws may require record retention for longer periods.
A. True
B. False
A. True
A SAR (Summary Annual Report) has to be provided if the plan is a totally unfunded welfare plan under which benefits are paid solely from the general assets of the employer or employee organization maintaining the plan.
A. True
B. False
B. False
For a voluntary benefit arrangement to be exempt from ERISA based on DOL safe harbor, it must meet all of the following requirements EXCEPT:
A. No employer or employee organization contributions
B. Participation is completely involuntary
C. No employer endorsement
D. No employer consideration except for reasonable compensation and administration
B. Participation is completely involuntary
Study Guide, Module 1, Pg. 8, Learning Outcome 1.7
A plan sponsor may be charged a penalty per day if it does not provide a plan participant with an SPD or SMM within _________ days of an individual’s request.
A. 15
B. 20
C. 30
D. 45
C. 30
