BASIC’s Quiz Series – Test Your FSA Knowledge
Published October 2010
Choose the most correct answer for each question. The answers are at the bottom of the page.
1) What happens if an employee leaves the company and the flex account is in a negative balance?
A) The overspent amount is considered a loss to the employer and is the risk of the plan. The employer cannot ask for the overspent balance from the employee.
B) The employer can request that the employee repay the overspent amount to the employer though the employee is not required to repay the money.
C) The employee is required to repay the overspent amount within the plan year.
2) Who can use a dependent care account?
A) The parent / guardian that has custody of the child(ren) more than 50% of the time.
B) Grandparents of the child(ren).
C) The parent / guardian that does not have custody of the child(ren) but still pays for dependent care.
D) All of the above
E) None of the above
3) When is an IRS form 5500 required?
A) When the HFSA has 100 or more participants at any time during the year.
B) When the HFSA has 50 or more participants at the start of the plan year.
C) When the HFSA has 100 or more participants at the start of the plan year.
4) True or False: An employer can run two short plan years back to back.
A) True: an employer may run two 6 month plans back to back.
B) False: an employer may not run two 6 month plans back to back.
5) Who cannot participate in a Cafeteria plan?
A) Self employed individuals and partners in a partnership
B) More than 2% shareholders in a Subchapter S Corporation
C) Outside directors (who are not also employees)
D) Members of LLC’s
E) All of the above
6) What is the maximum DCA benefit allowed under regulations?
A) $2500 regardless of filing status
B) $2500 if married filing jointly or $1250 if married filing separate or single.
C) $5000 regardless of filing status
D) $5000 if married filing jointly or $2500 if married filing separate or single.
7) True or False: Participant’s HFSA benefits continue while on FMLA leave.
A) True: The participant does not lose their HFSA benefits while on FMLA leave.
B) False: The participant loses HFSA benefits while on FMLA leave because they are no longer contributing to the HFSA plan.
8) What employer taxes are exempt / reduced by pre-tax payroll deductions?
A) FICA (Social Security and Medicare)
B) FUTA (Federal Unemployment)
C) Workers Compensation (some but not in all states)
D) All of the above
E) None of the above
9) What information is required for claim reimbursement?
A) Providers name and address
B) Date of service
C) Service provided
D) Charge for the service / employee out of pocket cost
E) All of the above
10) What information is required to reimburse over-the-counter drug purchases beginning 1/1/2011?
A) Providers name and address
B) Date of transaction
C) List of items purchased and the cost of each item
D) Letter of Medical Necessity from the participant’s doctor
E) All of the Above
F) Only A, B and C are required
Correct Answers: 1) A, 2) A, 3) C, 4) B, 5) E, 6) D, 7) A, 8) D, 9) E, 10) E
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