CPB (Certified Professional Biller) Certification Practice Exam

What type of plan provides various health benefit options through an insurer or third-party administrator?

1. Cafeteria Plan

2. Flexible Spending Plan

3. Health Reimbursement Plan

4. High Deductible Health Plan

The correct answer is: Cafeteria Plan

A cafeteria plan is a type of employee benefit plan that offers a variety of health and welfare benefits to employees, allowing them to choose from multiple options according to their individual needs and preferences. This flexibility is designed to cater to the diverse needs of employees, as each individual can select the benefits that are most relevant to them, rather than being bound to a one-size-fits-all approach. Cafeteria plans are particularly popular because they can include a mixture of different benefits, such as health insurance, dental and vision coverage, and even certain pre-tax benefits like transportation reimbursement. By allowing employees to pick and choose their benefits, these plans can lead to increased job satisfaction and may help improve employee retention. In contrast, other options mentioned, like flexible spending plans, are generally limited to specific types of spending accounts and are not comprehensive plans that provide varied health benefit choices. Health reimbursement plans are typically funded by the employer to reimburse employees for qualifying medical expenses, but do not offer the same flexibility as cafeteria plans. High deductible health plans focus on lower premiums but higher deductibles, which can be one of the choices within a cafeteria plan rather than representing the plan itself.