CPB Certified Professional Biller Certification Practice Exam

What does a cafeteria plan provide?

1. A single health insurance plan for all employees

2. Multiple health benefits plans and extra coverage options

3. A basic health insurance option only

4. A mandatory insurance coverage scheme

The correct answer is: Multiple health benefits plans and extra coverage options

A cafeteria plan is designed to offer employees a range of benefits choices, allowing them to select the options that best meet their individual needs. This flexibility is a defining characteristic of cafeteria plans, which can include various health benefits plans and additional coverage options, such as dental and vision insurance, flexible spending accounts, and dependent care assistance. This personalized approach helps cater to the diverse needs of employees while also allowing employers to manage their benefits costs effectively. The other options do not accurately describe how a cafeteria plan operates. A single health insurance plan for all employees, a basic health insurance option, or a mandatory insurance coverage scheme do not take into account the customization and variety of choices that cafeteria plans provide, which is a crucial element of their structure and appeal.