CPB Certified Professional Biller Certification Practice Exam

What is a feature of a cafeteria plan?

1. It mandates a single health insurance option for employees

2. It allows employees to choose from a variety of benefits

3. It requires employer contributions to be fixed

4. It only covers medical expenses

The correct answer is: It allows employees to choose from a variety of benefits

A cafeteria plan is designed to offer employees flexibility and choice when it comes to selecting their benefits. This feature is central to the concept of a cafeteria plan, allowing employees to tailor their benefits package to fit their individual needs and circumstances. By offering a variety of benefits—such as health insurance, dental coverage, retirement options, and other perks—employees can select the options that are most valuable to them, enhancing job satisfaction and engagement. In contrast, mandating a single health insurance option would limit employee choices, and requiring fixed employer contributions would reduce flexibility. Similarly, restricting coverage only to medical expenses would not encompass the full range of benefits available under a cafeteria plan, where a variety of options beyond just medical coverage can be selected.