GBA Group Benefits Associate Exam
- What is a key characteristic that distinguishes group benefits from individual insurance?
- They always require medical underwriting for each participant
- They are generally sponsored by an employer or association
- They cover only those over the age of 65
- They have no premium costs for participants
Correct Answer: B
Explanation: In group benefits, the employer or association is the policyholder, and employees or members receive coverage under that group policy.
- Which of the following typically applies to group benefits compared to individual insurance?
- Group benefits always have lower premiums than individual plans
- Group benefits can often provide coverage without individual health underwriting
- Group benefits cannot include life insurance
- Group benefits never involve premium contributions by employees
Correct Answer: B
Explanation: Group insurance often waives or simplifies individual health underwriting, making it easier for employees to obtain coverage compared to individual insurance.
- In a typical group health benefits arrangement, how are premiums generally structured?
- Employees pay 100% of the premiums 1 / 4
GBA Group Benefits Associate Exam
- Employers pay 100% of the premiums
- Costs are typically shared between the employer and the employees
- The government sets all premium rates
Correct Answer: C
Explanation: Most group health plans involve a cost-sharing arrangement where both employers and employees contribute toward the premium.
- Which of the following is a key advantage of offering group benefits to employees?
- It increases individual administrative costs
- It discourages employee retention
- It can enhance employee morale and loyalty
- It reduces coverage options for employees
Correct Answer: C
Explanation: Providing group benefits can improve employee satisfaction and retention by offering valued coverage as part of total compensation.
- Which statement accurately describes eligibility in group insurance?
- All employees must be covered, regardless of any employment criteria
- Eligibility can be based on employment status, such as full-time or part-time
- Only employees with pre-existing conditions can be covered
- Eligibility never requires a waiting period 2 / 4
GBA Group Benefits Associate Exam
Correct Answer: B
Explanation: Eligibility for group insurance typically depends on specific employment status or hours worked, and employers may set waiting periods for new hires.
- What is a primary difference between a fully insured group plan and a self-insured group
plan?
- In a fully insured plan, the employer pays claims directly
- In a fully insured plan, an insurance carrier assumes the risk of claims
- In a self-insured plan, premiums are determined by external underwriters
- In a self-insured plan, the insurance carrier handles all funding
Correct Answer: B
Explanation: In fully insured arrangements, an insurance company takes on the financial risk. In a self-insured setup, the employer bears the claims risk.
- Under experience rating, the premium for a group plan is primarily based on what factor?
- National average healthcare costs
- The previous claim experience of that specific group
- Uniform rates set by the federal government
- The size of the group only
Correct Answer: B 3 / 4
GBA Group Benefits Associate Exam
Explanation: With experience rating, insurers use the group’s past claims data to set future premiums, making the premium more reflective of the group’s specific risk profile.
- Community rating involves which of the following?
- Setting premiums based on each individual’s claims
- Using broad demographic factors to set uniform rates across a community
- Providing free coverage to all community members
- Restricting coverage to high-risk individuals
Correct Answer: B
Explanation: Community rating sets a single premium rate for all groups within a certain demographic or geographic area, without focusing on each group’s individual claims.
- Which federal law sets minimum standards for most voluntarily established health and
pension plans in private industry?
A) ACA
B) HIPAA
C) ERISA
D) COBRA
Correct Answer: C
Explanation: ERISA (Employee Retirement Income Security Act) establishes standards for private industry health and pension plans, including fiduciary responsibilities and reporting requirements.
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