10 exam-style questions with answers and explanations, straight from our 1,030-question bank. Tap an answer to check yourself. When you're ready, take the scored version in the free practice test.
The CFC exam has 75 questions and runs 3 hours.
These 10 free CFC questions are organized by exam domain, so you can see how each part of the Certified in Flexible Compensation blueprint is tested. Reveal the answer and explanation under each question.
A company is designing a new cafeteria plan and wants employees to make pre-tax elections for qualified benefits. Which action is required before the plan begins operating?
Correct answer: B - Adopt a written cafeteria-plan document describing the plan's operation
An employee requests a cafeteria-plan election change after a qualifying life event. What is the most appropriate compliance consideration?
Correct answer: A - Whether the requested change is permitted under applicable election-change rules
An employer allows employees to pay health insurance premiums before federal income taxation. This arrangement is most commonly associated with which plan type?
Correct answer: B - Premium Only Plan
A plan administrator is preparing annual employee benefit reporting. Which document is associated with federal benefit-plan reporting obligations?
Correct answer: A - Form 5500
A third-party administrator manages a benefit arrangement for an employer. Which area should be considered when evaluating administrator compliance responsibilities?
Correct answer: A - TPA bonding and licensing requirements
A cafeteria plan provides benefits only to highly compensated employees even though other employees meet eligibility requirements. Which compliance concern should be evaluated first?
Correct answer: A - Section 125 eligibility nondiscrimination testing
A dependent care FSA review finds highly compensated employees receive substantially greater average benefits than other eligible employees. Which test directly addresses this issue?
Correct answer: A - Average benefits test
A Section 125 plan is reviewed to determine whether its contribution structure unfairly favors a prohibited group. Which test is most relevant?
Correct answer: B - Contributions and benefits test
A benefits administrator is reviewing a commuter benefit program. Which Internal Revenue Code provision is specifically associated with qualified transportation benefits?
Correct answer: C - Section 132(f)
An employer offers a pre-tax benefit for employees using eligible mass transit to commute. Which category does this represent?
Correct answer: B - Transit benefit
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