6. Types Of Health Policies

Which of the following is a feature of a disability buyout plan? AA lump-sum benefit payment option BTax deductible premiums CTaxable benefits DA short elimination period

AA lump-sum benefit payment option Buyout plans usually allow for a lump-sum payment of the benefit

The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? AAccident-only BRestrictive CAccidental Death DComprehensive

AAccident-only Accident-only policies cover medical benefits related to an accident. Medical conditions related to sickness are not covered. Question 11 of 15

Which of the following is NOT covered under a long-term care policy? AAcute care in a hospital BAdult day care CHospice care DHome health care

AAcute care in a hospital A long-term care policy may provide coverage for home health care, adult day care, hospice care or respite care. Acute care is not covered under a long-term care policy

Which of the following statements regarding Business Overhead Expense policies is NOT true? ABenefits are usually limited to six months. BPremiums paid for BOE are tax-deductible. CAny benefits received are taxable to the business. DLeased equipment expenses are covered by the plan

ABenefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? ABusiness overhead expense policy BKey person insurance CDisability buy-sell agreement DBusiness disability policy

ABusiness overhead expense policy Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered

Who can provide skilled nursing care? ADoctor BSpouse CFamily Member DCommunity volunteer

ADoctor Skilled nursing care is daily nursing and rehabilitative care that can only be provided by medical personnel, under the direction of a physician. Skilled care is almost always provided in an institutional setting

Long-term care coverage may be available as any of the following options EXCEPT AEndorsement to a health policy. BGroup long-term care. CIndividual long-term care. DEndorsement to a life policy.

AEndorsement to a health policy. Long-term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy.

As it pertains to group health insurance, COBRA stipulates that AGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. BRetiring employees must be allowed to convert their group coverage to individual policies. CTerminated employees must be allowed to convert their group coverage to individual policies. DGroup coverage must be extended for terminated employees up to a certain period of time at the employer's expense.

AGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? AIndemnity BSurgical CBlanket DMedigap

AIndemnity A Hospital Indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses

Which of the following is NOT true regarding a flexible spending account? AIt does not have limits on contributions. BIt operates on "use-or-lose" basis. CIt provides an opportunity to receive benefits on a pretax basis. DIt is a cafeteria plan.

AIt does not have limits on contributions. A Flexible Spending Account (FSA) is a form of cafeteria plan benefit funded by salary reduction. The employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes. FSA benefits are subject to annual maximum and "use-or-lose" rule.

If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT ALoss of the owner's income. BRent. CUtilities. DEmployee payroll.

ALoss of the owner's income. If business owners want coverage for the loss of their own income due to total disability, they need to purchase a separate individual disability income policy

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT AWhen the amount payable under Social Security is more than the amount payable under the rider. BWhen used to replace or supplement benefits payable under other social insurance programs. CWhen the insured is eligible for Social Security benefits but before the benefits begin. DIf the insured has been denied coverage under Social Security.

AWhen the amount payable under Social Security is more than the amount payable under the rider. These riders provide benefits when the amount payable under Social Security is less than the amount payable under the rider (in this case only the difference will be paid).

Can an individual who belongs to a POS plan use an out-of-network physician? AYes, and they may use any preferred physician, even if not part of the HMO BNo CYes, but they must use the POS physician first DYes, but they must use the HMO physician first

AYes, and they may use any preferred physician, even if not part of the HMO In a POS plan the individuals can visit an in-network provider at their discretion. If they decide to use an out-of-network physician, they may do so.

Which of the following disability income policies would have the highest premium? A15-day waiting period / 5-year benefit period B15-day waiting period / 10-year benefit period C30-day waiting period / 10-year benefit period D30-day waiting period / 5-year benefit period

B15-day waiting period / 10-year benefit period The waiting, or elimination, period is the time from the onset of disability the insured must wait before becoming eligible for benefits. The shorter the waiting period, the higher the premium. After the insured satisfies the waiting period, they will receive benefits from the insurer for a limited benefit period. The longer the benefit period, the higher the premium. A disability income policy that includes the shortest waiting period and the longest benefit period would be most expensive

Benefit periods for individual short-term disability policies will usually continue from A3 months to 3 years. B6 months to 2 years. C2 years to age 65. D1 week to 4 weeks

B6 months to 2 years. Short-term disability is defined as a disability lasting not more than 2 years.

A hospital indemnity policy will pay AAny expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. BA benefit for each day the insured is in a hospital. CIncome lost while the insured is in the hospital. DAll expenses incurred by the stay in the hospital.

BA benefit for each day the insured is in a hospital. Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined to the hospital

A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following? ADisability insurance for the owner BCash to the owner's business partner to accomplish a buyout CThe rent money for the building DThe business manager's salary

BCash to the owner's business partner to accomplish a buyout If an owner dies or becomes disabled, the disability policy under the buy-sell agreement would provide enough cash to accomplish a buyout of the company

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as AMedical expense. BCritical illness. CMajor medical. DAD&D.

BCritical illness. A critical illness policy covers multiple illnesses, such as heart attack, stroke, renal failure, and pays a lump-sum benefit to the insured upon the diagnosis (and survival) of any of the illnesses covered by the policy.

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed? AThe minimum number of employees has increased. BEmployers are no longer forced to offer HMO plans. CThe source of funding has changed. DThe minimum number of employees has decreased

BEmployers are no longer forced to offer HMO plans. The HMO Act of 1973 forced employers with more than 25 employees to offer an HMO plan as an alternative to their regular health plans. The part of the act requiring dual choice has expired and has not been reinstated.

Long-term care coverage may be available as any of the following options EXCEPT AEndorsement to a life policy. BEndorsement to a health policy. CGroup long-term care. DIndividual long-term care.

BEndorsement to a health policy. Long-term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life Question 7 of 15

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT ALife. BIncome. CEyesight. DLimb.

BIncome. Accidental Death & Dismemberment policies cover loss of body parts or life only.

Which of the following is considered a presumptive disability under a disability income policy? ALoss of one hand or one foot BLoss of two limbs CLoss of one eye DLoss of hearing in one ear

BLoss of two limbs Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs

Which of the following is considered a presumptive disability under a disability income policy? ALoss of one hand or one foot BLoss of two limbs CLoss of one eye DLoss of hearing in one ear

BLoss of two limbs Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs.

All of the following are the most common variations in a Long-Term Care policy EXCEPT ANumber of home health visits covered. BNumber of family dependents. CThe amount paid for nursing home care. DNumber of days of confinement covered.

BNumber of family dependents. Long-Term Care policies can vary in the number of days of confinement covered, the number of home health visits covered, the amount paid for nursing home care, and other contract provisions.

Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off? ASubmit written notification to his major medical insurance company BPay a special deductible on his major medical policy CWait 6 months in order to be covered again DNothing needs to be done. The hospital's billing staff will make the appropriate arrangements.

BPay a special deductible on his major medical policy Before a major medical policy pays benefits not covered under an exhausted basic medical policy, the insured must pay a corridor deductible

Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? AProvide medical services at a reduced cost BProvide medical services only from physicians in the network CProvide the subscriber a choice of physicians DProvide the subscriber a choice of hospitals

BProvide medical services only from physicians in the network A Preferred Provider Organization attempts to provide subscribers with a choice of health care provider while effecting some cost-savings by contracting with providers for such services.

What happens if a non-member physician is utilized under the Point-Of-Service plan? AThe member patient will have to pay all costs out-of-pocket. BThe attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount. CThe non-member physician will be paid a fee for service. DThe non-member physician will be paid a fee for service, but the member patient will be penalized per visit on his/her monthly premium.

BThe attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount. If a non-member physician is utilized under the Point-Of-Service plan, then the attending physician will be paid fee for service, but the member patient will have to pay a higher coinsurance amount or percentage for the privilege

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? AThey are taxed as income. BThey are tax deductible. CThey are considered after-tax contributions. DThey are not deductible.

BThey are tax deductible. An individual covered by a high deductible health plan can make a tax-deductible contribution to an HSA and use it to pay for out-of-pocket medical expenses. Question 13 of 15

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within A30 days. B60 days. C90 days. D120 days.

C90 days. Most policies will pay the accidental death benefit as long as the death is caused by the accident and occurs within 90 days

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within A30 days. B60 days. C90 days. D120 days.

C90 days. Most policies will pay the accidental death benefit as long as the death is caused by the accident and occurs within 90 days.

Which of the following is NOT a characteristic or a service of an HMO plan? AEncouraging early treatment BProviding care on an outpatient basis CContracting with insurance companies DProviding free annual checkups

CContracting with insurance companies HMOs seek to identify medical problems early by providing preventive care. They encourage early treatment and whenever possible provide care on an outpatient basis rather than admitting the member into the hospital. Contracts are between the insured and the HMO, not an insurance company

The gatekeeper of an HMO helps APrevent double coverage. BDetermine which doctors can participate in an HMO plan. CControl specialist costs. DDetermine who will be allowed to enroll in an HMO program.

CControl specialist costs. Initially the member chooses a primary care physician, or gatekeeper. If the member needs the attention of a specialist, the primary care physician must refer the member. This helps keep the member away from the higher priced specialists unless it is truly necessary.

This arrangement specifies who will purchase a disabled partner's interest in the event he or she becomes disabled. AKey-person insurance BEmployee benefit plan CDisability buyout DBusiness overhead expense

CDisability buyout The disability buyout agreement specifies who will purchase a disabled partner's interest and legally obligates that person or party to purchase such interest upon disability

Which of the following is NOT true of a major-medical health insurance policy? AThe benefits are subject to deductibles. BIt is designed to cover hospital and medical expenses of a catastrophic nature. CIt is designed to pay on a first dollar of expense basis. DIt usually has a maximum benefit amount.

CIt is designed to pay on a first dollar of expense basis. A major medical policy usually has deductibles and a copayment requirement. Basic medical, but not major medical, expense policies pay on a first dollar basis.

Which of the following would NOT be considered a limited coverage policy? ACancer insurance BCredit insurance CMajor medical expense insurance DAccident insurance

CMajor medical expense insurance Limited policies cover only expense incurred from specific diseases, or specific causes

Which of the following would NOT be considered a limited coverage policy? ACancer insurance BCredit insurance CMajor medical expense insurance DAccident insurance

CMajor medical expense insurance Limited policies cover only expense incurred from specific diseases, or specific causes.

The period of time immediately following a disability during which benefits are not payable is AThe grace period. BThe residual period. CThe elimination period. DThe probationary period.

CThe elimination period. The elimination period is a waiting period, expressed in days, not dollars, imposed on the insured from the onset of disability until benefit payments commence

What is the period of coverage for events such as death or divorce under COBRA? A60 days B31 days C12 months D36 months Correct! Incorrect! The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.

D36 months The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce

Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? AResidential care BAssisted living CHome health care DAdult day care

DAdult day care Adult day care is designed for those who require assistance with various ADLs on a daily basis, but not around the clock. Custodial care is usually the only service provided by adult day care facilities

Group health insurance is characterized by all of the following EXCEPT AA master contract. BLower administrative costs. CConversion privilege. DAdverse selection.

DAdverse selection. If an insurer issues a group health insurance policy, they must cover everyone in the group under the master contract. Group underwriting process is designed to avoid adverse selection.

Long-term care insurance policies must cover which of the following? AAll mental disorders BTreatment of alcoholism CInjuries caused by an act of war DAlzheimer's disease

DAlzheimer's disease Most long-term care policies exclude coverage for drug and alcohol dependency, acts of war, self-inflicted injuries and nonorganic mental conditions. Organic cognitive disorders such as Alzheimer's disease, senile dementia and Parkinson's disease are covered.

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the AQualification period. BEnrollment period. CProbationary period. DElimination period.

DElimination period. On disability income insurance, the time between the onset of an injury or sickness and the time benefits begin is known as the waiting or elimination period

If an insured is not required to pay a deductible, what kind of coverage does he/she have? ACorridor BMajor medical CComprehensive DFirst dollar

DFirst dollar First-dollar coverages do not require the insured to pay a deductible.

In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT ALoss of hearing. BLoss of two limbs. CLoss of speech. DLoss of one eye.

DLoss of one eye. The definition of a presumptive disability varies by company, but generally includes a total loss of sight, speech, hearing or the use of any two limbs.

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? AFull B50% C25% DNone

DNone General disability policies do not cover losses caused by war, military service, intentionally self-inflicted injuries, overseas residence, or injuries suffered while committing or attempting to commit a felony

All of the following are true regarding key person disability income insurance EXCEPT AThe employer receives the benefits if the key person is disabled. BThe employer pays the premiums. CThe employee is the insured. DPremiums are tax deductible as a business expense

DPremiums are tax deductible as a business expense. In key person disability insurance, the contract is owned by the business, the premium is paid by the business, and the business is the beneficiary. The key person is the insured, and the business must have the key person's consent to be insured in writing.

In the event of a loss, business overhead insurance will pay for ALoss of profits. BSalary of the business owner. CMedical bills of the business owner. DRent.

DRent. Business overhead insurance is designed to pay the ongoing business expenses of a small business owner while they are disabled and unable to work. It does not pay the salary of the business owner or their loss of profits. However, it will provide the funds needed to pay the salary of employees other than the owners and their other ongoing business expenses, such as rent. Question 11 of 15

Hospital indemnity/hospital confinement indemnity policy will provide payment based on AThe type of illness. BThe premiums paid into the policy. CThe medical expense incurred. DThe number of days confined in a hospital.

DThe number of days confined in a hospital. Hospital indemnity/hospital confinement indemnity policy provides payment based only on the number of days confined in a hospital

How do employer contributions to a Health Savings Account affect the insured's taxes? AThe employer contributions are deducted from the individual insured's tax calculations. BThe employer contributions are not included in the individual insured's taxable income. CThe employer contributions are taxed at the same rate as the Social Security tax rate. DThe employer contributions are taxed to the individual insured as earned income

HSA contributions made by an employer are not included in the determination of an individual's taxable income

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service? APremium BCost share CCopayment DDeductible

CCopayment A copayment is a specific dollar amount of the cost of care that must be paid by the member. For example, the member may be required to pay $5 or $10 for each office visit.

Which of the following is considered a qualifying event under COBRA? ADivorce BMarriage CRelocation DPromotion

ADivorce Other qualifying events include the voluntary termination of employment; an employee's change from full time to part time; or the death of the employee

All of the following are differences between individual and group health insurance EXCEPT AIndividual insurance does not require medical examinations, while group insurance does require medical examinations. BIn individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. CIndividual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational. DIndividual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group

AIndividual insurance does not require medical examinations, while group insurance does require medical examinations. In individual coverage, policies are issued based upon individual underwriting. In group plan, everyone is covered for the same coverage and there is no individual underwriting selection

All of the following are differences between individual and group health insurance EXCEPT AIndividual insurance does not require medical examinations, while group insurance does require medical examinations. BIn individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. CIndividual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational. DIndividual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group.

AIndividual insurance does not require medical examinations, while group insurance does require medical examinations. In individual coverage, policies are issued based upon individual underwriting. In group plan, everyone is covered for the same coverage and there is no individual underwriting selection.

All of the following are the most common variations in a Long-Term Care policy EXCEPT ANumber of family dependents. BThe amount paid for nursing home care. CNumber of days of confinement covered. DNumber of home health visits covered.

ANumber of family dependents. Long-Term Care policies can vary in the number of days of confinement covered, the number of home health visits covered, the amount paid for nursing home care, and other contract provisions

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? AThe PPO will pay reduced benefits. BThe PPO will not pay any benefits at all. CThe insured will be required to pay a higher deductible. DThe PPO will pay the same benefits as if the insured had seen a PPO physician

AThe PPO will pay reduced benefits. The group health plan will not pay the full amount charged by the non-PPO doctor.

Which is NOT a characteristic of group health insurance? AThe actual policy is called the "master contract". BA policy is issued to each insured individual. CDependents of insureds can be covered under group health plans. DGroup coverage may be converted to individual coverage if the group contract is ended.

BA policy is issued to each insured individual. The actual policy, called the "master contract", is issued to the group sponsor only; the individuals covered under the policy are issued certificates of insurance as proof that they are covered under the master contract. Dependents are covered under group plans. If the group contract is terminated, insureds may convert to individual policies without having to provide proof of insurability.

How can a new physician be added to the PPO's approved list? ANew physicians are only added once a year, and are selected by the PPO's Board of Directors. BAgree to follow the PPO standards and charge the appropriate fees. CFill out the appropriate paperwork and wait the 12 month pre-certification period. DPay an annual fee for being on the PPO list.

BAgree to follow the PPO standards and charge the appropriate fees. Any physician or hospital that qualifies for and agrees to follow the PPO's standards and charges the established fees can be added to the PPO's approved list at any time. The providers may withdraw their name from the list at any time, as well

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? ACommunity-based organization professionals BAttending physician CRegistered nurses DLicensed practical nurses

BAttending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparations

Long-term care coverage may be available as any of the following options EXCEPT AEndorsement to a life policy. BEndorsement to a health policy. CGroup long-term care. DIndividual long-term care.

BEndorsement to a health policy. Long-term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy

Regarding long-term care coverage, as the elimination period gets shorter, the premium AGets lower. BGets higher. CRemains constant. DPremiums are not based on elimination periods

BGets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT ACoverage for plan participants is uniform. BIndividual members of the group may select the level of benefits for their own coverage. CThe plan is based on other than individual selection. DAll eligible employees must be covered.

BIndividual members of the group may select the level of benefits for their own coverage. In group health insurance, all individuals are covered under the master policy for the same coverages

The type of dental plan which is incorporated into a major medical expense plan is a/an ABlanket dental plan. BIntegrated dental plan. CSupplemental dental plan. DStand-alone dental plan.

BIntegrated dental plan. When dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses

Regarding the taxation of Business Overhead policies, APremiums are not deductible, but expenses paid are deductible. BPremiums are deductible and benefits are taxed. CPremiums are not deductible and benefits are taxed. DPremiums are not deductible, but benefits are deductible

BPremiums are deductible and benefits are taxed. The premiums paid for BOE insurance are tax deductible to the business as a business expense. However, the benefits received are taxable to the business as received.

What type of care is Respite care? A24-hour care BRelief for a major care giver CDaily medical care, given by medical personnel DInstitutional care

BRelief for a major care giver Respite Care is designed to provide relief to the family care giver, and can include a service such as someone coming to the home while the care giver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver.

Which of the following is NOT covered under Basic Hospital Expense Coverage? AX-ray charges BSurgeons' fees CHospital room and board DLab charges

BSurgeons' fees Hospital expense policies cover hospital room and board, and miscellaneous hospital expenses, such as lab and x-ray charges, medicines, use of operating room and supplies, while the insured is confined in a hospital

Which of the following would an accident-only policy NOT cover? AAmputation of a leg that was burned during a house fire BSurgery to repair a wrist damaged by tendonitis. CHospitalization costs due to a boating accident DDeath from a motorcycle accident

BSurgery to repair a wrist damaged by tendonitis. Accident-only policies cover medical costs caused by accidents, not sickness. Because the wrist was damaged by a sickness, not an accident, the policy would not cover any medical claims relating to the surgery or the condition itself.

In a disability policy, the elimination (or waiting) period refers to the period between ADuring which any specific illness or accident is excluded from coverage. BThe first day of disability and the day the insured starts receiving benefits. CThe effective date of the policy and the date the first premium is due. DCoverage under a disability policy and coverage under Social Security.

BThe first day of disability and the day the insured starts receiving benefits. The elimination, or waiting, period starts at the onset of a disability claim and is the period of time the insured must wait before benefits start. Question 15 of 15

How does a member of an HMO see a specialist? AThe member is allowed to choose his or her own specialist. BThe primary care physician refers the member. CThe insurer chooses the specialist. DHMOs do not cover specialists.

BThe primary care physician refers the member. In order for the member to get to see a specialist, the primary care physician must refer the member. If the member feels that the specialist should be treating him or her but is unable to get the referral from the primary care physician, the member might consider changing primary care physicians. In some HMOs there is a financial cost to the primary care physician for referring a patient to a more expensive specialist

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT ADismemberment benefits are paid for certain disabilities that are presumed to be total and permanent. BAccidental death and dismemberment insurance is considered to be limited coverage. CDeath benefits are paid only if death occurs within 24 hours of an accident. DAccidental death benefits are paid only if death results from accidental bodily injury as defined in the policy.

CDeath benefits are paid only if death occurs within 24 hours of an accident. Under an Accidental Death and Dismemberment insurance policy, the death benefit will be paid if the accidental death occurs within 90 days of the accident, not 24 hours.

In a disability policy, the probationary period refers to the time ABetween the 10th day of an illness-related disability and the first payment. BBetween the first day of disability and the actual receipt of payment for the disability incurred. CDuring which illness-related disabilities are excluded from coverage. DBetween the first day of disability and the day the disability must continue before the insured receives any benefits.

CDuring which illness-related disabilities are excluded from coverage. The probationary period limits coverage on new policies for certain illness-related conditions.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? AThe capital amount in monthly installments BThe principal amount in monthly installments CThe capital amount in a lump sum DThe principal amount in a lump sum

CThe capital amount in a lump sum Accidental Death and Dismemberment policies pay a capital amount (a percentage of the principal amount) for the loss of one limb or loss of sight in one eye. The principal amount is paid for death or often for the loss of 2 limbs or loss of sight in both eyes. Benefits are paid in a lump sum.

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? ATo reimburse only for the premiums paid into the policy BTo pay no more than 50% of the pre-disability income CTo provide an incentive for the insured to return to work DTo make sure there is enough money to reimburse all the claims

CTo provide an incentive for the insured to return to work The reason that insurers don't pay benefits that are equal to the insured's prior earnings is to reduce the chance of malingering on the part of the insured. Limiting the amount of coverage provides an incentive for the insured to return to work after a disability, as opposed to collecting benefits when he or she is capable of returning to work.

Which of the following statements is NOT correct concerning the COBRA Act of 1985? AIt covers terminated employees and/or their dependents for up to 36 months after a qualifying event. BIt applies only to employers with 20 or more employees that maintain group health insurance plans for employees. CCOBRA stands for Consolidated Omnibus Budget Reconciliation Act. DIt requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

DIt requires all employers, regardless of the number or age of employees, to provide extended group health coverage. COBRA Act applies to only employers with 20 or more employees.

Which of the following best describes the "first-dollar coverage" principle in basic medical insurance? AThe insured must first pay a deductible. BThe insurer covers the first claim on the policy. CDeductibles and coinsurance are taxed first. DThe insured is not required to pay a deductible

DThe insured is not required to pay a deductible. The three basic types of coverage (hospital, surgical and medical) are often referred to as first-dollar coverage because they usually do not require the insured to pay a deductible

The type of dental plan which is incorporated into a major medical expense plan is a/an ABlanket dental plan. BIntegrated dental plan. CSupplemental dental plan. DStand-alone dental plan

When dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses

What is the typical deductible for basic surgical expense insurance? A$0 B$100 C$200 D$500

A$0 As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited

An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20 day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay? ANothing; illness is not covered during the first 20 days of the contract. BThe insured will receive a return of premium. CIt will pay up to 10 years of benefits. DIt will pay until the insured is released from the hospital.

ANothing; illness is not covered during the first 20 days of the contract. Loss by illness is not covered if it occurs during the probationary period

If a business wants to buy a disability income policy on a key employee, which of the following is considered the applicant? AThe employer BThe insurer CThe employee DThe producer

AThe employer In key person disability insurance purchased by a business, the business is the applicant and the key person is the insured. When the policy is issued, the business is the policyowner and is responsible for paying the premiums

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? AJoe is 40 and is not covered by any other health insurance BAmanda is 67 and is covered by a basic medical expense policy CAndy is 55 and is covered under a dental care policy DJenny is 60 and also has a long-term care insurance plan

BAmanda is 67 and is covered by a basic medical expense policy To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare (usually age 65), and can't be claimed as a dependent on someone else's tax return.

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? ACommunity-based organization professionals BAttending physician CRegistered nurses DLicensed practical nurses

BAttending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparations.

In which of the following locations would skilled care most likely be provided? AAt a physician's office BIn an institutional setting CAt the patient's home DIn an outpatient setting

BIn an institutional setting Skilled nursing care is performed under the direction of a physician, usually in an institutional setting.

Which of the following would be a qualifying event as it relates to COBRA? AEligibility for Medicare BTermination of employment due to downsizing CTermination of employment for stealing DEligibility for coverage under another group plan

BTermination of employment due to downsizing Employee qualifying events include the termination of employment for reasons other than for misconduct; dependents' qualifying events include the death of the employee, divorce or legal separation

Which statement is NOT true regarding underwriting group health insurance? AEveryone in the group is covered, regardless of their medical history. BThe group is assessed individually for insurability. CThe premium can be made retroactive for the year. DThe cost of the policy is partially determined by the ratio of males to females in the group.

BThe group is assessed individually for insurability. Group health insurance policies must cover everyone in the group, regardless of age, health history, and occupation. Because of this blanket coverage, the group as a whole is assessed for insurability. The size, average age, gender ratio, persistency, and industry of the group are considered, along with other factors, when determining premiums. Groups can be reassessed annually in order to adjust premium amounts.

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay? A80% of the total cost B20% of the total cost C$120 a day D$100 a day

C$120 a day Most LTC policies will pay the benefit amount in a specific fixed dollar amount per day, regardless of the actual cost of care.

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? AFull benefits for 2 years BNo benefits CFull benefits DPartial benefits

CFull benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work

Which of the following is another name for a primary care physician in an HMO? AReferring physician BSpecialist CGatekeeper DSubscriber

CGatekeeper The HMO subscriber must choose a primary care physician (PCP) who acts as a gatekeeper. If the member needs the attention of a specialist, the PCP must make a referral. This helps the member avoid higher priced specialists unless it is truly necessary.

Which of the following is true of a PPO? AClaim forms are completed by members on each claim. BNo copayment fees are involved. CIts goal is to channel patients to providers that discount services. DThe most common type of PPO is the staff model.

CIts goal is to channel patients to providers that discount services. Insureds are treated by providers who have agreed to discount their charges

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? ADouble the amount of the death benefit BRefund of premiums CPrincipal sum DCapital sum

CPrincipal sum Accidental Death and Dismemberment coverage only pays for accidental losses and is thus considered a pure form of accident insurance. The principal sum is paid for accidental death. In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy, often referred to as the capital sum.

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? ASpecified Disease Policy BCredit Disability CSpecial Risk Policy DLimited Risk Policy

CSpecial Risk Policy The Special Risk Policy will cover unusual types of risks that are not normally covered under AD&D policies. It covers only the specific hazard or risk identified in the policy, such as a racecar driver test-driving a new car.

Which of the following individuals is eligible for a Health Savings Account? AMargaret is 68 years old BSuzie is a dependent on her parent's tax returns CTomas is insured by a Low Deductible Health Plan (LDHP) DAllison is insured by a High Deductible Health Plan (HDHP)

DAllison is insured by a High Deductible Health Plan (HDHP) To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.

Which of the following statements regarding Business Overhead Expense policies is NOT true? APremiums paid for BOE are tax-deductible. BAny benefits received are taxable to the business. CLeased equipment expenses are covered by the plan. DBenefits are usually limited to six months.

DBenefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is AMore limited in general. BMore limited in duration. CBroader in duration. DBroader in general.

DBroader in general. A policy that uses the accidental bodily injury definition will provide broader coverage than a policy that uses the accidental means definition

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance? ASue the employer BApply for another group health insurance CRequest a refund of unearned premium DConvert to an individual health policy

DConvert to an individual health policy It is perfectly legal for a company to terminate the master contract of a group health insurance policy. When this happens, the insureds can convert to individual health policies within a specified period of time, without having to provide proof of insurability.

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan? AA broad coverage area BA low monthly premium CLow cost deductibles DDiagnostic and preventive care

DDiagnostic and preventive care Dental expense insurance is a form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured's teeth. An important feature of a dental insurance plan which is typically not found in a medical expense insurance plan is the inclusion of diagnostic and preventive care (teeth cleaning, fluoride treatment, etc.).

As it pertains to group health insurance, COBRA stipulates that ARetiring employees must be allowed to convert their group coverage to individual policies. BTerminated employees must be allowed to convert their group coverage to individual policies. CGroup coverage must be extended for terminated employees up to a certain period of time at the employer's expense. DGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

DGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium

Most LTC plans have which of the following features? ANo elimination period BVariable premiums COpen enrollment DGuaranteed renewability

DGuaranteed renewability The benefit amount payable under most LTC policies is usually a specific amount per day, and some policies pay the actual charge incurred per day. Most LTC policies are also guaranteed renewable; however, insurers do have the right to increase the premiums.

Which of the following types of LTC is NOT provided in an institutional setting? ACustodial care BSkilled nursing care CIntermediate care DHome health care

DHome health care Home health care is given in the home, but skilled nursing, intermediate, and custodial care may all be provided in an institutional setting.

In long-term care (LTC) policies, as the benefit period lengthens, the premium ARemains unchanged. BLTC premiums are not based on benefit periods. CDecreases. DIncreases.

DIncreases. LTC policies define the benefit period for how long coverage applies, after the elimination period. The longer the benefit period, the higher the premium will be

Which of the following is NOT true of a major-medical health insurance policy? AIt usually has a maximum benefit amount. BThe benefits are subject to deductibles. CIt is designed to cover hospital and medical expenses of a catastrophic nature. DIt is designed to pay on a first dollar of expense basis.

DIt is designed to pay on a first dollar of expense basis. A major medical policy usually has deductibles and a copayment requirement. Basic medical, but not major medical, expense policies pay on a first dollar basis

Which is true regarding HMO coverage? AIt is divided based on the average tax bracket of a family. BIt is divided by state. CHMOs provide nationwide coverage. DIt is divided into geographic territories. Correct! Incorrect! HMOs offer services to those living within specific geographic boundaries that may be formed by county lines or city limits. If one lives within the boundaries, they are eligible to belong to the HMO, but if they do not live within the boundaries, they are ineligible.

DIt is divided into geographic territories. HMOs offer services to those living within specific geographic boundaries that may be formed by county lines or city limits. If one lives within the boundaries, they are eligible to belong to the HMO, but if they do not live within the boundaries, they are ineligible.

All of the following would be qualified as a dependent under a Dependent Care Flexible Spending Account, EXCEPT AJoe was paralyzed from the neck down in a car accident and is cared for by his wife BMatt must be constantly watched due to his violent muscle spasms which often lead to Matt injuring himself CPete is severely autistic and refuses to take care of his own personal needs, which are taken care of by his father DJeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair

DJeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called ABlanket disability insurance. BLong-term disability. CBusiness overhead expense disability insurance. DKey employee disability insurance

DKey employee disability insurance. The business is the contract holder and would receive benefits if a specified key employee became disabled

What type of care is Respite care? ADaily medical care, given by medical personnel BInstitutional care C24-hour care DRelief for a major care giver

DRelief for a major care giver Respite Care is designed to provide relief to the family care giver, and can include a service such as someone coming to the home while the care giver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver.

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? ALimited Risk Policy BSpecified Disease Policy CCredit Disability DSpecial Risk Policy

DSpecial Risk Policy The Special Risk Policy will cover unusual types of risks that are not normally covered under AD&D policies. It covers only the specific hazard or risk identified in the policy, such as a racecar driver test-driving a new car.

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? ATo make sure there is enough money to reimburse all the claims BTo reimburse only for the premiums paid into the policy CTo pay no more than 50% of the pre-disability income DTo provide an incentive for the insured to return to work

DTo provide an incentive for the insured to return to work The reason that insurers don't pay benefits that are equal to the insured's prior earnings is to reduce the chance of malingering on the part of the insured. Limiting the amount of coverage provides an incentive for the insured to return to work after a disability, as opposed to collecting benefits when he or she is capable of returning to work.

What is the purpose of COBRA? ATo provide coverage for the dependents BTo provide health coverage for people with low income CTo protect the insureds against insolvent insurers DTo provide continuation of coverage for terminated employees

DTo provide continuation of coverage for terminated employees The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.