gba/rpa 3 condensed

Must specific formalities be completed for an employee welfare plan to exist?

No. An ongoing employer commitment or administrative practice may establish the plan.

What changes a short-term disability payroll practice into a regulated welfare plan?

Funding through insurance or paying more than an employee’s normal compensation.

What four conditions are required for the voluntary-benefit safe harbor?

No employer contributions, voluntary participation, no prohibited employer consideration, and no endorsement.

Who is the plan administrator if none is named in the plan document?

The plan sponsor, usually the employer.

Who must be covered by an employee benefit plan fidelity bond?

Every person who handles plan funds.

How often must a summary plan description be redistributed if material changes occurred?

At least every 5 years.

How often must a summary plan description be redistributed without material changes?

At least every 10 years.

What is the deadline for notice of a material reduction in health plan benefits?

Generally within 60 days after the change.

What deadline triggers the potential daily penalty for failing to give requested plan documents?

30 days after a participant’s written request.

When must a new participant generally receive an initial summary plan description?

Within 90 days after becoming covered; a newly established plan generally has 120 days after becoming subject to the law.

What maximum daily document-disclosure penalty is quoted in the guide?

Up to $110 per day, with annual inflation adjustments noted by the guide.

How long must supporting employee benefit plan records generally be kept?

At least 6 years after the related Form 5500 annual return is filed.

Are employer-paid health coverage contributions generally taxable wages?

No. They are generally excluded from federal income, Social Security, Medicare, and unemployment taxes.

When can employee-paid health insurance premiums be pretax?

When paid through a qualifying Section 125 cafeteria plan.

What choice must a Section 125 cafeteria plan offer?

At least one taxable benefit, such as cash, and at least one qualified tax-free benefit.

Can a Section 403(b) tax-sheltered annuity elective deferral be a cafeteria plan qualified benefit?

No. It is listed among the nonqualified benefits.

Which part of employer-provided group-term life coverage is generally excluded from income?

The first $50,000 of coverage; excess coverage can produce imputed taxable income.

How are employer-funded disability payments generally taxed?

The portion funded with employer contributions is generally taxable to the employee.

How are disability payments funded by employee after-tax premiums generally taxed?

The portion funded by after-tax employee premiums is generally not taxable.

At what age may a health savings account owner make catch-up contributions?

Age 55 or older, before Medicare enrollment.

What happens to eligibility to contribute to a health savings account after Medicare enrollment?

Contributions are no longer permitted.

What excise tax applies to excess health savings account contributions in the guide?

6%.

May a health flexible spending account offer both carryover and a grace period?

No. The guide says the two options cannot be combined.

What payroll tax treatment applies to employee pretax retirement elective deferrals?

Federal income tax is deferred, but Social Security and Medicare payroll taxes generally apply.

What does an investment policy statement document?

Investment objectives, selection, measurement, monitoring, and review guidelines.

Does the law expressly require an investment policy statement for every retirement plan?

No. It is a widely recommended governance best practice.

How often should an investment committee generally meet under the guide's best practices?

Quarterly or twice a year, depending on the committee and plan needs.

What does a service organization controls report focused on financial reporting assess?

Relevant controls at a service provider that may affect the plan's financial reporting.

What is protected health information?

Health, care, or payment information protected under health privacy rules.

What is an employer's basic responsibility when outsourcing sensitive benefits data?

Careful vendor selection, contractual safeguards, and ongoing monitoring.

What should a privacy-sensitive service provider contract cover?

Data use, confidentiality, breach notice, security, subcontractors, compliance, and oversight rights.

Which accounting standards topic applies to defined benefit pension plans?

Financial Accounting Standards Board Accounting Standards Codification Topic 960.

Which accounting standards topic applies to defined contribution pension plans?

Financial Accounting Standards Board Accounting Standards Codification Topic 962.

Which accounting standards topic applies to health and welfare benefit plans?

Financial Accounting Standards Board Accounting Standards Codification Topic 965.

May a plan administrator demand to inspect an independent plan auditor's workpapers?

No. The administrator has no right to examine them, even to assess audit quality.

What does an independent plan auditor provide?

An audit opinion based on reasonable—not absolute—assurance.

What are the three conditions in the fraud triangle?

Pressure or incentive, opportunity, and rationalization.

What share of plan audits had unacceptable-major deficiencies in the cited 2014 study?

Nearly 4 out of 10 audits.

What percentage of deficient audits were by firms with clean peer reviews in the cited study?

48%.

What did the Supreme Court decision in Tibble versus Edison emphasize?

The continuing fiduciary duty to monitor investments rather than only reviewing initial selection.

What six-year issue can arise from failing to monitor investments?

A claim may be timely based on a failure to monitor within the six-year limitations period.

Who often controls the retirement plan client relationship in the guide's advisor-administrator comparison?

The investment advisor.

What is one basis point?

0.01 percentage point.

What had the largest effect on retirement wealth in the savings simulations?

Consistently following a rigorous savings plan.

What safeguards are needed for electronic plan recordkeeping?

Accuracy, authenticity, accessibility, and legible reproduction.

What question does descriptive health analytics answer?

What happened?

What question does predictive health analytics answer?

What may happen next?

What question does prescriptive health analytics answer?

What should we do about it?

What share of annual claims spending may be recoverable from administrative errors in the guide?

Often approximately 1% to 3%.

What is a typical lookback period for a medical claims audit?

About 12 to 24 months.

What shorter period can limit recovery of audited medical claims overpayments?

Provider contracts may limit recoveries to approximately 12 months.

What should a strong health analytics vendor's visualization tools support?

Flexible, changeable displays; not permanently fixed visuals.

What is the latest age a qualified longevity annuity contract may begin paying?

Age 85.

What qualified longevity annuity contract premium maximum does the study guide give for 2022?

The lesser of $145,000 or 25% of eligible account value; the dollar limit is indexed.

Is a qualified longevity annuity contract allowed to have a cash surrender value?

No. Cash surrender values are prohibited under the guide's stated requirements.

How does a qualifying longevity annuity affect required minimum distribution calculations?

Its value can be excluded from the account balance used for those calculations.

May a Roth individual retirement account hold a qualified longevity annuity contract under the guide?

No. The guide does not include Roth individual retirement accounts among eligible arrangements.

What did the Setting Every Community Up for Retirement Enhancement Act help with?

Annuity insurer-selection fiduciary concerns and portability of certain retirement income products.

What is the difference between Section 3(21) and Section 3(38) investment services?

Section 3(21) gives investment advice; Section 3(38) manages investments with discretion.

What determines whether an investment decision met fiduciary prudence?

The reasonableness of investigation, selection, and monitoring—not the outcome alone.

Does an innovative investment automatically require a formal investment policy statement by law?

No. A more detailed policy is recommended, but not expressly required.

What is a collective investment trust?

A pooled investment fund maintained by a bank for eligible benefit plans.

Can an oral severance arrangement potentially be a regulated welfare plan?

Yes, if its structure and ongoing administration satisfy plan requirements.

What was the key contractual limitation principle in Heimeshoff?

A reasonable plan-specified claims limitation period can be enforced in certain benefit disputes.

Why can a plan venue-selection provision be useful?

It may promote predictability by concentrating litigation under a more consistent body of case law.

What is a defining feature of social insurance?

Compulsory coverage and income protection emphasizing social adequacy.

Is full advance funding required for Social Security under the guide?

No. Full funding is not considered necessary for the continuing social insurance system.

How many credits are generally required for fully insured Social Security retirement?

Generally 40 work credits, with special rules for younger workers.

How does a worker qualify as currently insured for Social Security?

Earn at least 6 credits during the 13 calendar quarters ending with the relevant event.

What is the earliest general age for Social Security retirement benefits?

Age 62, with a permanently reduced monthly benefit.

What is full Social Security retirement age for workers born in 1960 or later?

Age 67.

What is the primary insurance amount for Social Security retirement?

The worker’s monthly benefit at full retirement age—not average indexed monthly earnings.

Why is the Social Security replacement rate higher for lower-income workers?

The weighted benefit formula replaces a larger percentage of lower lifetime earnings.

How large are delayed retirement credits for those born in 1943 or later?

8% per year, prorated by month, until age 70.

How does the retirement earnings test apply when below full retirement age throughout the year?

Benefits are generally reduced $1 for each $2 earned above the applicable threshold.

Which income measure helps determine whether Social Security benefits are taxable?

Adjusted gross income, tax-exempt interest, and half of Social Security benefits.

What is the maximum portion of Social Security benefits subject to federal income tax?

Up to 85% of benefits may be included in taxable income for higher-income recipients.

Which child may qualify for survivor benefits after age 18?

An unmarried adult child whose qualifying disability began before age 22.

How long is the standard waiting period for Social Security disability cash benefits?

5 months.

How many extra weeks can basic extended unemployment benefits provide?

Up to 13 additional weeks in high-unemployment states.

How does experience rating affect unemployment insurance employer taxes?

Employers with favorable employment records can qualify for lower unemployment tax rates.

How many weeks of regular state unemployment benefits are typical?

Up to 26 weeks in most states, according to the study guide.

When does the Medicare hospital benefit period end?

After 60 consecutive days without inpatient hospital or skilled nursing facility care.

How many total Medicare inpatient hospital lifetime reserve days are available?

60 days over a beneficiary's lifetime.

What is the general hospital stay needed before skilled nursing facility Part A coverage?

At least 3 qualifying inpatient hospital days.

What is the usual admission window for covered skilled nursing care after discharge?

Generally within 30 days of the qualifying hospital stay.

What is the maximum covered skilled nursing facility stay in a benefit period?

Up to 100 covered days, subject to program conditions.

How are the first 20 covered skilled nursing facility days generally paid?

Medicare pays covered costs without daily coinsurance.

Which skilled nursing facility days generally require daily coinsurance?

Days 21 through 100.

What is required for Medicare hospice eligibility?

Generally a certification of terminal illness with life expectancy of 6 months or less.

What is Medigap insurance used for?

Supplementing Original Medicare by paying certain charges not covered by Parts A and B.

What do Medicare administrative contractors do?

Process and pay fee-for-service claims for Medicare Parts A and B in geographic jurisdictions.

Which Medicare trust fund finances Part A?

The Hospital Insurance trust fund.

Which Medicare trust fund finances Parts B and D?

The Supplementary Medical Insurance trust fund, with separate accounts for the two parts.

What share of Medicare Part B costs do standard beneficiary premiums cover?

Approximately 25% on average, according to the study guide.

What share of standard Medicare Part D costs do beneficiary premiums cover?

Approximately 25.5% on average, according to the study guide.

What risk arises when transferring an employee directly to a foreign employer?

Loss of eligibility for home-country plans and continuing home-country social security coverage.

What is tax equalization for expatriate employees?

The employer aims to leave the employee paying roughly the home-country tax amount.

What does Internal Revenue Code Section 3121(l) accomplish?

It can extend United States Social Security coverage to eligible employees of foreign affiliates.

What do bilateral Social Security totalization agreements do?

Help prevent dual contributions and coordinate benefit eligibility across countries.