Benefits Training Day 3
FSA/HSA/HRA Benefit Plan Setup
This certification test contains questions of different formats. The format of the questions include multiple choice; true/false and fill in the blank etc. . . Please remember to chose the best response to each question. You are able to use your notes and participation guide along with the ISolved system while taking the test. Read carefully. In order to obtain your certification, you must score a passing score of 75 percent. Good Luck!
Questions and Answers
- 1.
Please refer to the "Exercise for Mastery Homework" Word Doc in the Day 1 folder in Box for directions on completing the homework assignment. All screen shots should be attached to that Word doc and turned in at the very end of the 2 week training period.https://infinisource.box.com/s/ekngnn4qkp2ubrd2dv9h
- 2.
A Limited FSA is offered
- A.
Combined with a Medical FSA to allow additional funds over the normal maximum
- B.
Only if an HSA is chosen. A limited FSA can be used only for Dental &/or Vision reimbursements
- C.
Only for employees that don’t elect the HSA
- D.
None of the above
Correct Answer
B. Only if an HSA is chosen. A limited FSA can be used only for Dental &/or Vision reimbursementsExplanation
The correct answer is "Only if an HSA is chosen. A limited FSA can be used only for Dental &/or Vision reimbursements." This means that a Limited FSA is only available to employees who choose to have a Health Savings Account (HSA), and the funds in the Limited FSA can only be used for reimbursements related to dental and/or vision expenses.Rate this question:
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- 3.
An HRA reimbursement:
- A.
Is only tracked only through payroll.
- B.
Is set up like an LTD
- C.
Is set up like an HSA
- D.
Needs to be elected every year
Correct Answer
A. Is only tracked only through payroll.Explanation
An HRA reimbursement is a type of employee benefit plan where employers reimburse employees for eligible medical expenses. It is typically set up and managed through the payroll system, meaning that the employer tracks and processes the reimbursements through the payroll department. This ensures that the reimbursements are properly accounted for and included in the employee's taxable income. Unlike an LTD (Long-Term Disability) or an HSA (Health Savings Account), an HRA reimbursement does not require annual elections or contributions from the employee.Rate this question:
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- 4.
How does an HSA catch-up work?
- A.
The catch-up must be paid in one lump at the start of the year
- B.
The employee must give the employer cash or check each pay period
- C.
Deductions are setup in addition to & run concurrently with the standard HSA deductions or the deductions begin for the catch-up after the EE reaches the regular HSA limit
- D.
The employer pays this for the employee
Correct Answer
C. Deductions are setup in addition to & run concurrently with the standard HSA deductions or the deductions begin for the catch-up after the EE reaches the regular HSA limitExplanation
The correct answer states that deductions for the catch-up contribution can be set up in addition to and run concurrently with the standard HSA deductions, or the deductions can begin after the employee reaches the regular HSA limit. This means that the catch-up contribution can be made alongside the regular HSA contributions, or it can be made once the employee has reached the regular HSA limit. This allows individuals who are age 55 or older to make additional contributions to their HSA to catch up on saving for healthcare expenses.Rate this question:
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- 5.
Which is a true statement about Medical HRA’s?
- A.
HRA’s are employee funded
- B.
HRA’s are offered as a stand-alone plan
- C.
HRA’s are not COBRA eligible
- D.
HRA COBRA is to be offered 2 ways: Medical + HRA premium & Medical premium only
Correct Answer
D. HRA COBRA is to be offered 2 ways: Medical + HRA premium & Medical premium only -
- 6.
HSA and concurrent HSA Catch-up Plans should be set up:
- A.
With multiple years on the rates tab
- B.
With HSA Single and HSA Family coverage codes
- C.
With dependencies on a PPO plan
- D.
On the same Benefit Type
Correct Answer
B. With HSA Single and HSA Family coverage codesExplanation
To set up HSA and concurrent HSA Catch-up Plans, it is necessary to have both HSA Single and HSA Family coverage codes. This means that the plans should be available for individuals with single coverage as well as for individuals with family coverage. This ensures that both types of employees, those with single coverage and those with family coverage, have the option to contribute to an HSA and take advantage of the catch-up plans.Rate this question:
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- 7.
An HSA is not:
- A.
A medical plan
- B.
A pre-tax benefit
- C.
A private bank account
- D.
Allowed to be changed except once a year at OE
Correct Answer
A. A medical planExplanation
An HSA (Health Savings Account) is a type of savings account that is used to pay for qualified medical expenses. It is not a medical plan itself, but rather a financial tool that can be used in conjunction with a high-deductible health insurance plan. It is also not a pre-tax benefit, meaning that contributions to an HSA are made with after-tax dollars. Additionally, while an HSA is a personal account, it is not a private bank account as it has specific regulations and restrictions on how the funds can be used. Finally, the statement that an HSA can only be changed once a year at OE (Open Enrollment) is incorrect, as individuals can make changes to their HSA contributions anytime throughout the year.Rate this question:
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- 8.
An HRA is set up in benefits (in order to facilitate COBRA) and is setup like a(n):
- A.
FSA
- B.
HSA
- C.
Medical Plan
- D.
401k Plan
Correct Answer
C. Medical PlanExplanation
An HRA (Health Reimbursement Arrangement) is set up in benefits to facilitate COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA allows individuals to continue their health insurance coverage after leaving a job or experiencing a qualifying event. Since an HRA is specifically designed to reimburse employees for qualified medical expenses, it is set up similar to a medical plan. This allows employees to use the funds in their HRA to cover their COBRA premiums and other eligible medical expenses.Rate this question:
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- 9.
HSA can only be offered if the employer offers a high deductible health plan and the employee is enrolled in it.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
An HSA (Health Savings Account) is a type of savings account that allows individuals to save money for medical expenses on a tax-free basis. However, in order to be eligible for an HSA, both the employer and the employee must meet certain requirements. One of these requirements is that the employer must offer a high deductible health plan (HDHP), which is a health insurance plan with a higher deductible and lower premiums. Additionally, the employee must be enrolled in this HDHP in order to be eligible for an HSA. Therefore, the statement is true - an HSA can only be offered if the employer offers a high deductible health plan and the employee is enrolled in it.Rate this question:
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- 10.
When setting up a HDHP with an HSA, you should include a dependency on the HSA to the medical plan.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
When setting up a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), it is important to include a dependency on the HSA to the medical plan. This means that the HDHP should be structured in a way that it is linked to the HSA, allowing individuals to contribute to the HSA and use those funds to pay for qualified medical expenses. By including this dependency, it ensures that the HSA is properly integrated into the overall healthcare plan and individuals can take advantage of the tax benefits and savings that come with having an HSA.Rate this question:
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- 11.
Employees must make an election or waive the FSA and HSA each year.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Employees must make an election or waive the FSA and HSA each year because these are benefits that require active participation and decision-making. The Flexible Spending Account (FSA) and Health Savings Account (HSA) both involve setting aside pre-tax funds for medical expenses, and employees need to choose whether they want to participate in these programs or not. By making an election or waiving these accounts annually, employees can ensure that they are taking advantage of the benefits offered and managing their healthcare expenses effectively.Rate this question:
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- 12.
HSA’s are a COBRA eligible benefit.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
HSA stands for Health Savings Account, which is a type of savings account that allows individuals to save money tax-free for medical expenses. COBRA, on the other hand, stands for Consolidated Omnibus Budget Reconciliation Act and is a federal law that allows individuals to continue their health insurance coverage after leaving a job. While HSA's can be used to pay for COBRA premiums, they are not considered a COBRA eligible benefit themselves. Therefore, the correct answer is False.Rate this question:
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- 13.
You should always include a Stop Date on the Plans Tab 365 days from the Start Date on the FSA and H.S.A. plans.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Including a Stop Date on the Plans Tab 365 days from the Start Date on the FSA and H.S.A. plans is important because it helps ensure that the plans have a defined duration and do not continue indefinitely. By setting a Stop Date, it allows for proper tracking and management of the plans, including determining when they need to be renewed or terminated. This also helps in budgeting and forecasting for the organization. Therefore, it is necessary to include a Stop Date on the Plans Tab 365 days from the Start Date on the FSA and H.S.A. plans.Rate this question:
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- 14.
An HRA is like an invisible plan. It does nothing but sit there until an EE terms.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
This statement is true because an HRA (Health Reimbursement Arrangement) is a type of employer-funded benefit plan that remains inactive until an employee incurs eligible medical expenses. It is like an invisible plan because it does not provide any immediate benefits or coverage until the employee needs to use it. Once an employee submits a claim for reimbursement of their medical expenses, the HRA plan kicks in and provides the necessary funds to cover those expenses.Rate this question:
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- 15.
An Employee who is eligible for the HSA and/or HSA Catch-up is also eligible for the Medical HDHP plan even though they are separate plans.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
The statement is true because eligibility for the Health Savings Account (HSA) and/or HSA Catch-up is a requirement for being eligible for the Medical High Deductible Health Plan (HDHP). Even though they are separate plans, an employee who qualifies for the HSA and/or HSA Catch-up is automatically eligible for the Medical HDHP plan.Rate this question:
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- 16.
An FSA can be altered or changed during the year if you are diagnosed with a serious illness.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
An FSA (Flexible Spending Account) cannot be altered or changed during the year if you are diagnosed with a serious illness. FSAs have a "use it or lose it" rule, which means that any funds not used within the plan year are forfeited. Therefore, if you are diagnosed with a serious illness during the year, you cannot change the amount of money allocated to your FSA to cover the medical expenses related to that illness.Rate this question:
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- 17.
Employees can elect (select all that are correct):
- A.
FSA Med & Dependent Care
- B.
HDHP, Limited FSA & HSA
- C.
FSA & HRA
- D.
FSA Dependent Care only
Correct Answer(s)
A. FSA Med & Dependent Care
B. HDHP, Limited FSA & HSA
D. FSA Dependent Care onlyExplanation
The employees have the option to elect FSA Med & Dependent Care, HDHP, Limited FSA & HSA, and FSA Dependent Care only. This means that employees can choose to enroll in a flexible spending account for medical and dependent care expenses, a high deductible health plan, a limited flexible spending account for specific expenses, and a health savings account. They also have the option to elect FSA Dependent Care only, which means they can choose to enroll in a flexible spending account specifically for dependent care expenses.Rate this question:
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- 18.
Which is a true statement?
- A.
The FSA Medical and FSA Limited plans can be set up with same system deduction code.
- B.
The FSA Medical and FSA Limited must be set up with their own system deduction codes.
- C.
FSA Dependent Care, FSA Medical and FSA Limited all have the same annual limit.
- D.
A & C.
Correct Answer
B. The FSA Medical and FSA Limited must be set up with their own system deduction codes.Explanation
The correct answer is that the FSA Medical and FSA Limited must be set up with their own system deduction codes. This means that separate codes need to be created for each type of plan in order to accurately track and deduct contributions from an employee's paycheck. This ensures that the funds are correctly allocated to the appropriate plan and prevents any confusion or errors in managing the accounts.Rate this question:
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- 19.
An FSA Limited Plan must be set up with "Limited" in the Plan Description.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
An FSA Limited Plan must be set up with "Limited" in the Plan Description in order to accurately identify and distinguish it from other types of FSA plans. This helps in ensuring that the plan is properly administered and that employees understand the limitations and restrictions of the plan.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Dec 09, 2014Quiz Created by
Joan Olejniczak
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