CEBS FULL 5-EXAM
PRACTICE SET 500
QUESTIONS
Question 1: When an employer begins designing an employee bene�ts program, what should be established �rst?
Choices:
1) The overall objectives of the bene�ts program 2) The insurer commission schedule 3) The annual claims reserve 4) The provider reimbursement method
Correct Answer: The overall objectives of the bene�ts program
Explanation: Bene�ts design should begin with clear employer and employee objectives. Those objectives guide later decisions about coverage, �nancing, administration and communication.Page 1
Question 2: An employer wants its total rewards package to support recruitment
while controlling labor cost. Which approach best re�ects sound bene�ts planning?
Choices:
1) Select bene�ts independently without considering pay 2) Coordinate bene�ts with cash compensation and workforce needs 3) O�er only bene�ts required by federal law 4) Copy the largest competitor plan without analysis Correct Answer: Coordinate bene�ts with cash compensation and workforce needs Explanation: Employee bene�ts are part of total compensation. A coordinated approach balances cash pay, bene�ts, workforce needs, competitiveness and cost rather than treating each bene�t in isolation.Question 3: A manufacturer permanently stops using a highly toxic process because the potential loss is unacceptable. Which risk-management technique is this?
Choices:
1) Risk retention 2) Risk avoidance 3) Risk transfer 4) Loss �nancing
Correct Answer: Risk avoidance
Explanation: Risk avoidance eliminates the activity that creates the exposure. The manufacturer removes the source of the risk rather than insuring or retaining it.Page 2
Question 4: A health plan sponsor increases its deductible and pays routine claims from current cash �ow while insuring catastrophic claims. Which risk technique is being used for the routine layer?
Choices:
1) Avoidance 2) Retention 3) Duplication 4) Speculation
Correct Answer: Retention
Explanation: Paying predictable smaller losses from the sponsor own resources is risk retention.Catastrophic losses may separately be transferred through insurance or stop-loss coverage.Question 5: Which health plan structure generally requires members to obtain most covered nonemergency care from participating providers and often coordinates care through a primary care model?
Choices:
1) HMO
2) Indemnity plan 3) Dental fee schedule 4) Medigap policy
Correct Answer: HMO
Explanation: An HMO typically uses a de�ned provider network and coordinated care model.Indemnity coverage generally o�ers broader provider choice with less network steerage.Page 3