Accident and Health Insurance Agent/Broker Practice Exam
As a disciplinary action, the Commissioner may assess penalties of ________. $400 to $800 $200 to $600 $100 to $500 $1000 to $5000
$100 to $500
Peter is covered by a hospital expense policy that has specified benefits. His plan allows $100 for daily room and board and $1,000 maximum for ancillary expenses. The surgical expense allows $500 maximum on a scheduled basis. Peter is hospitalized for 10 days with a surgeon's fee of $2,000. How much of the total expense for this hospital stay will Peter's insurance provide? The room rate is $200 and the ancillary expense is $1,500 $5,500 $1,000 $2,500 $3,500
$2,500
The Patient Protection and Affordable Care Act defines a full-time employee as one who works at least how many hours a month? 160 hours 144 hours 120 hours 140 hours
120 hours
The Commissioner may require up to __ hours of continuing education per renewal period for producer licensed for less than 25 consecutive years. 4 8 16 32
16
The Commissioner may require up to __ hours of continuing education per renewal period for producer licensed for less than 25 consecutive years. 8 4 32 16
16
What is the maximum tax credit for a for-profit small business as provided by the Patient Protection and Affordable Care Act? 25% 35% 20% 50%
35%
Once an insurance agent or company advertises their services, they must maintain a complete file of all material available for periodic inspection as to the content, modes of distribution and frequency. These advertising files must be maintained for: A period of not less than 1 year A period of not less than 3 years A period of not less than 2 years A period of not less than 5 years
A period of not less than 3 years
An insurance policy is a legal contract, based on contract law. It is a contract where _____________ is exchanged for valuable consideration (i.e. premiums). A representation A warranty A promise of benefits An expectation
A promise of benefits
Ken has a medical plan through his employer that provides a schedule of benefits and payment allowances for those benefits in his employee group certificate booklet. Ken most likely in enrolled in a: Point of Service Plan PPO Plan Basic Surgical Expense Plan HMO Plan
Basic Surgical Expense Plan
Abraham is reviewing the outline of coverage contained in his health policy. He will find all of the following in this outline EXCEPT: Future policy value Limitations and exclusions Renewal provisions Benefits
Future policy value
Insurers and plan providers may not exclude coverage for diagnosis, treatment, and other medically necessary services associated with the off-label use of drugs, so long as the use is recognized as treatment for the illness or injury: By the Commissioner By the State Attorney General's Office In medical reference or literature By the NAIC
In medical reference or literature
Matthew had to go to the emergency room for an x-ray. The hospital submitted a claim to his insurance carrier - and they paid the hospital's fee for an x-ray. What type of plan does Matthew have? HMO Indemnity PPO POS
Indemnity
Solomon Huebner fostered the idea of human life value. In the case of health insurance, the insured is protected against all of the following EXCEPT: Accident Illness Living too long Injury
Living too long
Which type of care is a system of cost containment methods used by insurers or their agents to control cost and access to health care services, where insurers and providers review and preauthorize treatment plans? Free Non-critical Managed Supplemental
Managed
Which type of care is a system of cost containment methods used by insurers or their agents to control cost and access to health care services, where insurers and providers review and preauthorize treatment plans? Non-critical Managed Free Supplemental
Managed
Some policies require that the insured be confined to his/her home and be under a doctor's care. This type of policy is called a: Recurrent disability Nonoccupational Residual disability Medically defined disability
Medically defined disability
Herman and Velma are trying to find a plan that will provide home health care, assisted living and custodial benefits as they become older. All of the following plans may provide the benefits they require EXCEPT: 1.A life insurance policy with a long term care rider 2.A long term care policy with the appropriate options 3.Medicare Part A & B 4.An annuity with long term care waivers
Medicare Part A & B
The Commissioner sets rules and regulations for minimum standards loss ratios based on claims experience and earned premiums in accordance with the _____. NAIC City Council State Treasury FDA
NAIC
Your disability policy states that you will qualify for benefits in the event you are not able to perform the essential duties that you are qualified by prior experience, training or education as a result of a sickness or accident. You have experienced an accident, but you can work part time as you recover fully. What benefits might you expect? 1.Regular benefits for the first six months and a reduced benefit thereafter. 2.A delayed benefit if your condition does not improve. 3.Partial benefits based on ability to perform certain duties 4.No benefits, since you can perform some of the duties of your occupation
No benefits, since you can perform some of the duties of your occupation
In addition to a cafeteria plan, how many other plans offer employees a choice between taxable and nontaxable benefits without the choice causing the benefits to become taxable? Six One None Two
None
Mr. Johnson has applied for Medicaid. Which of the following is required in order for him to be eligible for Medicaid? He must sell his home He must not have any income He must not have any personal property None of the above
None of the above
What provides affordable and accessible health insurance to support public and private initiatives for individuals without health insurance and promotes a health care system that meets the needs of all of the residents of its jurisdiction? Wellness maintenance associations Prepaid health service alliances Nonprofit health service plans Prepaid wellness cooperatives
Nonprofit health service plans
Norbert was not making quota as set by his company. As a way of inducing more clients, Norbert offered to split his commissions, provide tickets to a sold out show and use of his vacation condo if they would purchase or renew a policy. This action is considered: Rebating Coercion Intimidation Twisting
Rebating
Harold has received a new policy from his agent. After reviewing the contract Harold decides to return the policy under the free look provision. The company is required to do all of the following EXCEPT: 1.Handle the transaction promptly 2.Reimburse the agent for lost commissions 3.Cancel the policy 4.Refund all premiums paid to Harold
Reimburse the agent for lost commissions
Which of the following is NOT considered to be an unfair claims settlement practice? 1.Knowingly misrepresenting policy provisions. 2.Replacing one insurance policy with another. 3.Failing to promptly acknowledge pertinent communications. 4.Refusing to pay claimants without conducting a reasonable investigation.
Replacing one insurance policy with another.
Home healthcare services are long-term care benefits for medical and nonmedical services provided to ill, injured, or disabled individuals in their home. Which of the following services is NOT included? Respite care Reprieve therapy Assistance with activities of daily living Homemaker
Reprieve therapy
What type of insurer retains risk? 1.Government insurance. 2.Reinsurers. 3.Self insurers. 4.Assessment insurers.
Self insurers.
Sally has stomach problems and her doctor puts her in the hospital for tests. It is discovered that she has a bleeding ulcer. This type of peril is considered: Accidental Recurring Temporary Sickness
Sickness
Insurance contracts sometimes contain ambiguities. Which of the following has not been taken to court for further interpretation? 1.Reasonable expectations 2.Subrogation 3.Ambiguities in a contract of adhesion 4.Utmost good faith
Subrogation
Insurers must report _________of a producer and update the producer register with the Commissioner within 30 days of the effective date. Termination Resignation Appointment Hiring
Termination
A health insurance underwriter may deny coverage for which of the following reasons? 1.The applicant's history of alcohol abuse 2.The applicant's marital status 3.The sex or gender of the applicant 4.Genetic traits of the applicant
The applicant's history of alcohol abuse
Under what conditions is the death benefit (principal sum) payable under an Accidental Death and Dismemberment (AD&D) policy? 1.The insured dies from a grave illness 2.The insured dies from natural causes 3.The insured dies from an accident 4.All of the above
The insured dies from an accident
What is the penalty for an insurance company failing to meet the medical loss ratio requirements set in the Patient Protection and Affordable Care Act? 1.The insurer must issue a premium rebate to its policyholders. 2.The insurer must pay a fine payable to the federal government. 3.The insurer must lay off sufficient administrators to reach the required ratio. 4.The insurer must pay a fine payable to the state
The insurer must issue a premium rebate to its policyholders.
Premiums paid for Long Term Care policies are deductible from income tax under what circumstances? 1.Deduction of premiums may create taxable income when benefits are paid 2.Under no circumstances are premiums deductible 3.A plan can be converted to a deductible plan on any policy anniversary. 4.The plan must be a qualified plan and only a portion of the premiums is deductible
The plan must be a qualified plan and only a portion of the premiums is deductible
If Tim previously reached his lifetime limit on reimbursement from the Maryland Health Connection, what happens under the new regulations? 1.Tim can apply and a determination will be made of a possible new limit. 2.Tim can apply because there are no limits. 3.Tim can apply because the new limits are higher than before. 4.Tim is still ineligible for coverage.
Tim can apply because there are no limits.
What is the purpose of the Fair Credit Reporting Act? 1. rule that insurance is primarily regulated on a state-level with minimal federal oversight. 2.To rule that insurance transactions crossing state lines are not treated as interstate commerce. 3.To rule that insurance transactions crossing state lines are interstate commerce. 4.To regulate the way credit information is collected and used.
To regulate the way credit information is collected and used.
Advertisements may be: Truthful Misleading and false Unclear regarding waiting periods All of the Above
Truthful
The Uniform Provisions Law requires all of the following as mandatory EXCEPT: Grace Period Waiver of Premium Physical examination and autopsy Entire Contract
Waiver of Premium
Sally is considering her Medicare options. She understands that to enroll in Medicare Part B, she will have to pay a monthly premium. Since she is healthy, she is considering delaying her enrollment until later. Will she be able to enroll at a later date? 1.Yes, she can enroll at anytime in the future 2.Yes, however; she would have a permanent premium penalty when she does enroll 3.No, this is a take or leave it situation 4.Yes, but she would have to show evidence of good health.
Yes, however; she would have a permanent premium penalty when she does enroll
An employer is the owner of a group contract. Does the employee retain any ownership rights under the contract? 1.Yes, the employee may change a beneficiary and make certain assignments 2.No, the employer owns all parts of the plan 3.No, the insurance company will not recognize the employee's standing 4.Yes, the employee may tailor make his individual plan.
Yes, the employee may change a beneficiary and make certain assignments
The practice of using misrepresentation to induce a policyholder to replace a policy issued by the insurer the producer represents is called: 1.twisting. 2.churning. 3.intimidation. 4.misrepresentation.
churning.
Any of the following is considered advertising for a health insurance company EXCEPT Prepared sales talks Material used to recruit new agents Magazine or Newspaper publications Morbidity Tables
Morbidity Tables
The Acme Manufacturing Company has decided to change the insurer for their group policy. Which of the following is a major concern with this type of change? 1.Termination of coverage 2.Eligibility of coverage 3.Coordination of benefits 4.Carryover of probationary period, coinsurance and deductibles
Carryover of probationary period, coinsurance and deductibles
Insurers must maintain an advertising file of all material printed, published, or distributed advertisements of policies for _____, subject to examination by the Commissioner. 1.No more than five years 2.No less than four years 3.No more than two years 4.No less than three years
No less than three years
A reimbursement contract will contain which of the following features: 1.Payment for daily hospital room & board and for surgical procedures. 2.None of the Above 3.Payment of lost income 4.Payment for travel expenses to and from medical facility.
Payment for daily hospital room & board and for surgical procedures.
All long-term care policies are guaranteed renewable. Some long-term policies are called noncancellable. Which of the following is true about a noncancellable policy. 1.Policy cannot be cancelled as long as premiums are paid 2.Provisions of the policy can be changed 3.The insurer can decline to renew 4.The insurer can change the policy premium
Policy cannot be cancelled as long as premiums are paid
All of the following are considered moral hazards EXCEPT: Criminal activity Poor credit history Alcohol abuse Drug abuse
Poor credit history
Question 110 Most dental plans require a dentist to submit a plan of treatment for dental expenses that exceed a specified dollar amount. Such as $500.00. This process is known as: 1.Pre-operative notification 2.Prospective treatment planning 3.Pre-certification 4.Pre-authorization
Pre-authorization
Both private and government insurance are available in every state in the United States. Which of the following is one of the major differences between private and government insurance. 1.Government insurance can be either Federal or state 2.Both private and government have disability coverage 3.Government insurance is more efficient to run. 4.Private insurance can deny coverage to individuals
Private insurance can deny coverage to individuals
Insurance companies use which of the following to limit claims from pre-existing disabilities or to control adverse selection? Recurrent disability clauses Reduced benefits Elimination periods Probationary periods
Probationary periods
Adrian is a producer with a poor work ethic. He has been known to misrepresent the terms of a policy, make false or misleading statements regarding dividends or other benefits paid and misrepresents the insurer's financial condition or reserves. The state of Maryland has a term for this activity: Conflict of interest Prohibited practices Diminished trust Fiduciary unaccountability
Prohibited practices
An individual disability will be characterized in all of the following ways EXCEPT: 1.The company may be able to increase premiums 2.The benefit may be paid annually 3.The premium is established by the insured's occupation and health status 4.The benefit is a stated dollar amount based on a percentage of income per month
The benefit may be paid annually
There are various optional provision for health policies. Which of the following is not an optional provision? 1.Intoxicants and narcotics 2.Conformity with state statutes 3.Reinstatement 4.Illegal occupation
Reinstatement
Various riders and provisions affect how, when and how much the insured received in benefits. The _____________ limits income benefits based on the insured's income for the past two years. Impairment rider Future increase option (FIO) Relation of earnings Cost of living adjustment (COLA)
Relation of earnings
Janice has received a contract from the agency she plans to work for. The contract defines the agreement in very explicit terms. Signing the contract will allow her to represent the agency. This is an example of: Implied authority Presumptive authority Express authority Apparent authority
Express authority
Sam is involved in a serious accident. He will not be able to return to his job as an instructor for an undetermined amount of time. He also has training as a welder. His disability policy states that Sam will be considered disabled in the event he is not able to perform the duties of any occupation for which he has been trained, has education or prior experience. Sam is also not able to perform the duties as a welder. Sam should expect the following: 1.Full benefits regardless of his ability to perform other occupations. 2.Full benefits until he can return to work or work in another suitable occupation. 3.A full benefit until his health allows him to return to work. 4.Full benefits for two years and then a reduced amount based on a formula.
Full benefits until he can return to work or work in another suitable occupation.
Medicare Part C - also called Medicare Advantage Plans - came about as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Which of the following is available under the Medicare Advantage program? Private fee-for-service plans Managed care plans Preferred Provider plans All of the above
All of the above
A contract that heavily restricts one party while leaving the other free (as some standard form printed contracts), and implies inequality in bargaining power is: A contract of adhesion A conditional contract An aleatory contract A unilateral contract
A contract of adhesion
The insuring clause in a health policy will deal with all of the following EXCEPT: 1.Specifies that benefits are subject to policy provisions 2.The insurer's promise to pay benefits for defined losses 3.A definition of losses not covered by the policy 4.Identifies the insurance company and the insured
A definition of losses not covered by the policy
To act as an insurer in the state of Maryland, an insurer must hold _____ issued by the Commissioner. A compelling warrant of remuneration An applicable diploma of indemnity A valid certificate of authority A legitimate record of credibility
A valid certificate of authority
The Patient Protection and Affordable Care Act does NOT require which of the following to provide Essential Health Benefits? Individual health insurance plans Basic health programs Small group health insurance plans Grandfathered health insurance plan
Grandfathered health insurance plan
What provides hospital or medical policies or plans, nonprofit health service policies or plans, and health maintenance organizations? Health benefit plans Wellness cooperative plans "Cafeteria" wellness plans Annuitized wellness cooperatives
Health benefit plans
Mrs. Brown has also signed up to be an insurance advisor, which will allow her to examine a policy and charge a fee for her expertise. All of the following are duties in her capacity of an advisor EXCEPT: 1.Offering alternative insurance products 2.Giving an applicant advice pertaining to an insurance product 3.Providing a recommendation on an insurance product 4.Explaining specifics/details of an insurance product
Offering alternative insurance products
Martha is issued her license on October 17, 2012. When will she need to renew her license? On or before October 17, 2015 By midnight on December 31, 2014 On or before October 17, 2014 By midnight on December 31, 2015
On or before October 17, 2014
An HMO will generally cover all of the following services from a hospital EXCEPT: Out patient surgery Out patient prescription drugs In patient care, including ancillary services X-ray and laboratory
Out patient prescription drugs
Licenses expire ___________on the anniversary of the date the license was issued? Every fifth year Every year Every other year Every third year
Every other year
Seth failed to enroll his spouse in his group health plan when she was eligible. She had lost her plan at her employer due to a reduction in hours. Seth's group plan will: 1.Require a completed health statement and use an accept or reject method to determine eligibility 2.Offer COBRA since she has lost coverage as a result of a reduction in hours 3.Give the spouse credit for time served under the other plan and let her enroll 4.Require her to wait until the anniversary of the group plan
Require a completed health statement and use an accept or reject method to determine eligibility
Insurers that offer insurance to people through the individual market are called private insurers. Which of the following does not fall in the private insurer category? Stock companies Mutual companies Noncommercial organizations Self-insurers
Self-insurers
An example of presumptive disability might be any of the following EXCEPT: Severance of a hand Complete loss of hearing Amputation of a leg at the hip Total Blindness
Severance of a hand
The government is one of three primary types of insurers. Government insurance provides protections against fundamental risks. Which of the following is an example of a government insurance program? Social Security Blue Cross Lloyd's Associations All of the above
Social Security
Group health insurance is a contract between an insurer and a group of some sort - be it an employer, a union, or some other type of group that was established to benefit its members. All of the following are true about group policies EXCEPT: The contract is issued to the employer or union, etc. Groups must exist naturally The policyholder is the employee Each employee receives a certificate of coverage
The policyholder is the employee
No policy may be advertised, solicited, or issued as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than: Those of Medicare Those agreed to by the insured Those allowed by the Commissioner Those permitted under Medigap Part B
Those of Medicare
Yvonne has been hospitalized and is presented with a bill for $19,500. She is covered by a major medical play that imposes a $500 deductible and pays 80% thereafter. Yvonne is limited to $2,500 for out-of-pocket expense. What will Yvonne have to pay for her part of the bill? $3,000 $4,400 $3,900 $2,500
$3,000
A basic medical plan will usually cover all of the following losses EXCEPT: 1.Monthly income from disability 2.Physician charges 3.Private duty nursing 4.Daily room and board
.Monthly income from disability
Mr. Robinson is curious why the application for his health insurance policy is so important. His agent explains that all of the following reasons are important EXCEPT: 1.An application becomes part of the policy when it is attached to the policy 2.The application is part of the insuring clause when it is attached to the policy 3.The application helps to fully identify the applicant 4.The statements made in the application will become the basis for issuing a policy
.The application is part of the insuring clause when it is attached to the policy
Continuation of coverage for group medical plans shall continue for up to __ months after the date of death, divorce, or termination, subject to payment of premiums. 9 18 15 4
18
The Patient Protection and Affordable Care Act provides guaranteed insurance issue to children under what age? 18 19 20 21
19
Individuals covered under a Medicare Supplement policy may suspend benefits and premiums for up to _____ months if the individual applies and is determined to be eligible for Social Security disability benefits. 40 24 10 52
24
What is the maximum tax credit for a tax-exempt small business as provided by the Patient Protection and Affordable Care Act? 35% 50% 20% 25%
50%
John has been disabled for three years. He has been released to come back to work on a part-time basis. His policy contains a partial disability provision. If he qualifies for that benefit, he will receive what percent of his pre-disability wage from disability benefits in addition to his part time salary? 1.30% flat with no offsets. 2.70% if the part time wage is less per hour than his pre-disability wage 3.50%, but the total wage may not exceed his pre-disability wage 4.60% offset by Social Security
50%, but the total wage may not exceed his pre-disability wage
The Pre-Existing Condition Insurance Plan (PCIP) offers coverage to people who have been without coverage for at least what length of time? 6 months 9 months 18 months 12 months
6 months
For large group plans, the Patient Protection and Affordable Care Act mandates insurance companies to spend what percentage of all premiums collected on health care? 75% 65% 85% 55%
85%
A unilateral contract is: 1.A contract that makes a promise or promises in exchange for a performance 2.Insures that both parties are bound to perform 3.Implies inequality of bargaining power 4.Allows the "little guy" some rights over the person writing the contract.
A contract that makes a promise or promises in exchange for a performance
Sylvia did not pay her initial premium when the agent took her application. Because she paid the premium when he delivered her policy, the agent is required to obtain ________________ in order for the policy to be in effect. A binding receipt A statement of good health An inspection report All of the above
A statement of good health
An example of an unfair claim settlement practice would include: 1.Denying the payment of a claim because it does not meet the conditions of the insurance contract 2.Denying the claim because it occurred after the cancellation of the policy. 3.Delaying the payment of a claim while it is investigated for possible fraud. 4.Advising a claimant of the possibility that, should the claimant reject a settlement offer, an arbitration award might be less than the offer.
Advising a claimant of the possibility that, should the claimant reject a settlement offer, an arbitration award might be less than the offer.
Long-term care insurers may require a physical examination of any applicant: Age 70 or older Age 65 or older Age 75 or older Age 80 or older
Age 80 or older
An insurer is anyone who acts as a/an __________in the business of entering into insurance contracts. Surety Indemnity Contractor All of the Above
All of the Above
Home health care services are long-term care benefits: 1.For medical and non-medical services 2.Provided to the ill, injured, or disabled individuals in their home 3.That includes those of a homemaker, and assistance with activities of daily living 4.All of the Above
All of the Above
The Patient Protection and Affordable Care Act allows an employee's health insurance plan's coverage to be rescinded for which of the following reasons? Fraud Refusal to pay premiums Termination of the plan All of the above
All of the above
Who maintains a cafeteria plan? An employer The state in which the plan was purchased The federal government An insurance company
An employer
The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information EXCEPT: 1.An individual's character 2.Tax liens older than seven years 3.An individual's criminal history 4.Adverse information about an individual that dates back over seven years
An individual's character
The waiver of premium specifies that in the event of a disability, premiums be waived. When does this rider begin? 1.After a 30 day waiting period 2.After 60 days 3.At the moment of the disability 4.When the claim is filed
At the moment of the disability
Medicare Part A provides a benefit for skilled nursing care after a hospital stay. In order to qualify for the skilled nursing benefit, the patient must do all of the following EXCEPT: 1.Be limited to 20 days of custodial care 2.Be expected to show improvement in the condition being treated 3.Have a qualifying hospital stay prior to going to the skilled nursing facility 4.Be admitted to a Medicare approved facility
Be limited to 20 days of custodial care
If the employer pays all premiums for _____, benefits are payable to the employer. Layered annuities Comprehensive indemnities Blanket insurance Layered insurance
Blanket insurance
Frank is covered under his local Blue Cross and Blue Shield plan. All of the following are true about Blue Cross and Blue Shield plans Except: 1.Blue Cross generally pays benefits for hospitals 2.Voluntary non-profit organizations 3.Both are exempt from insurance regulations 4.Blue Shield generally pays benefits for physicians
Both are exempt from insurance regulations
The period of time that must elapse from the onset of a disability before an insured can collect benefits is called: Elimination period The time deductible Both of the above Neither of the above
Both of the above
Roger is enrolled in his employer's medical plan. His benefit booklet states that all medical expenses are payable at 80% up to $5,000 in any calendar year, but the total benefit for all illnesses and accidents is $1,000,000. Roger is enrolled in a: 1.A limited major medical plan with annual limits 2.An HMO plan 3.Comprehensive major medical with a lifetime maximum 4.A PPO plan
Comprehensive major medical with a lifetime maximum
A health policy will be issued with an outline of coverage. All of the following will be listed in the outline of coverage EXCEPT: 1.Contractual governing provisions 2.An outline of benefits and coverage 3.Principal exclusions and limitations 4.Renewal and cancellation provisions
Contractual governing provisions
A health policy will be issued with an outline of coverage. All of the following will be listed in the outline of coverage EXCEPT: Contractual governing provisions Renewal and cancellation provisions Principal exclusions and limitations An outline of benefits and coverage
Contractual governing provisions
Which of the following statements is not true about a binding receipt? 1.It is referred to as a temporary insurance agreement 2.Coverage begins on the date of the application, even if the applicant is uninsurable. 3.Coverage lasts 120 days 4.It is referred to as an unconditional receipt.
Coverage lasts 120 days
A Medicare supplement plan (Medigap) is designed to provide benefits for all of the following services EXCEPT: 1.A portion of the surgeon's bill not paid in full by Medicare 2.Hospital Deductibles 3.A portion of lab and x-ray tests not paid in full by Medicare 4.Custodial care facility
Custodial care facility
Matthew has purchased a special risk policy. Which of the following policies will fall into that category? Dread disease Travel Accident Cancer Hospital Indemnity
Dread disease
very Medicare supplement insurer must establish marketing procedures that any comparison of policies is fair and accurate, and _____ is not sold or issued. An unwarranted annuity Excessive insurance Prepaid insurance A disproportionate annuity
Excessive insurance
All of the following provisions are required provisions for health policies EXCEPT: Grace Period Proof of loss Exclusions Reinstatement
Exclusions
After an adverse determination has been deemed to be denied, the Patient Protection and Affordable Care Act requires an external review process at what level? Federal or state State only Federal only Federal, state or county
Federal or state
Uma is an agent, and she has completed an application for health insurance on a new customer. When she returns to the office, she notices that a few items have been left blank. Uma should: 1.Submit the application and let the underwriters correct it. 2.Have her manager initial the changes 3.Initial the application where she made changes 4.Go back to the customer to have them initial changes
Go back to the customer to have them initial changes
The Patient Protection and Affordable Care Act provides a tax credit for a small business that meets all the following criteria except - 1.Pay Employees less than $50,000 average annual wages. 2.Pay at least 50% of each employee's health care insurance premium. 3.Have 25 or less full-time equivalent employees for the taxable year. 4.Have a net profit less than $5,000 times the number of employees
Have a net profit less than $5,000 times the number of employees
Larry, Moe and Curly are equal partners in a furniture company. They have recently had a business evaluation of $300,000 for the entire business. Their accountant has recommended that they consider a buy-out agreement in the event that one or more of the partners is disabled. What steps should Larry, Moe and Curly consider? 1.Have the attorney draft an agreement to eliminates the partnership for the disabled partner 2.Purchase individual disability plans in the amount of the partner's salary. 3.Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement. 4.Have their attorney draft an agreement that allows the continuing partners to pay the disabled partner's spouse.
Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement.
Joseph has advised his insurance company of a loss under his major medical policy within the 15 days required in the contract. The insurance company has not responded to his request for a claim form. Under the claims payment provision, Joseph may take the following actions: 1.He can begin legal action to recover his loss 2.Inform the company that since it has not complied with the contract provision, his claim is due and payable immediately. 3.He can refuse to submit proof of loss and the claim must be paid in any event. 4.He can submit a claim with a description of the loss with proof of loss in any form he chooses.
He can submit a claim with a description of the loss with proof of loss in any form he chooses.
Rick's grandmother has a long-term care policy (LTC). If she becomes disabled, or has a chronic disease, she can expect that it will provide benefits for nursing home, home-based care and respite care: 1.For 10 years 2.If services are provided under medical supervision 3.For as long as she can pay the premiums 4.All of the above
If services are provided under medical supervision
A change of occupation provision will allow the insurance company to do any of the following at the time of claim EXCEPT: 1.Increase the premiums for that individual 2.Pay a reduced benefit for a higher risk occupation 3.Pay the benefits stated in the policy 4.Require a doctor's statement confirming disability
Increase the premiums for that individual
Bruce owns a plan that pays $100 daily benefit for a hospital stay with no deductible. This kind of policy is known as a (an): 1.Major medical plan 2.Basic plan 3.Indemnity plan 4.Reimbursement plan
Indemnity plan
Maryland put in place new rules and regulations that require producers and insurers to provide notice to individuals about their policies and practices. These policies inform individuals of when a licensee may disclose nonpublic personal health information about individuals to affiliates and nonaffiliated third parties. The notice must also explain how the individual can opt out of the disclosure by submitting an opt out notice. A licensee may not disclose nonpublic personal information about a customer unless the customer authorizes the disclosure. This new rule is called: 1.Consumer Health Information Service 2.Consumers Choice Plan 3.Insurance Information and Privacy Protection 4.Maryland HIPAA Regulation of 2007
Insurance Information and Privacy Protection
There are number of clauses in an insurance contract. One of the clauses identifies the contracting parties (the insured and the insurance company) and also the scope and limits of coverage. This clause is referred to as: Time limit on certain defenses clause Benefit outline clause Renewability Clause Insuring Clause
Insuring Clause
A variety of types of care are provided under a long-term care policy. All of the following are types of care generally provided EXCEPT: 1.Home health care 2.Intensive care 3.Custodial care 4.Skilled care
Intensive care
An underwriter has reviewed the information submitted on a prospective customer. He has determined that this person will not qualify for a standard issue policy. The underwriter may choose any of the following actions EXCEPT: 1.Issue the policy with a probationary period allowing the company to cancel the policy at a later date at their option. 2.Charge a higher premium than for the standard risk 3.Decline the risk outright 4.Attach a rider that excludes coverage for specific conditions
Issue the policy with a probationary period allowing the company to cancel the policy at a later date at their option.
Jonathan has submitted notice of loss for a medical bill to his insurance company. The insurance company has not responded to Jonathan's request in a timely fashion. Under these circumstances Jonathan's best course of action is: 1.Jonathan can demand a full refund of premium paid including reasonable interest 2.Jonathan may submit the proof of loss in any form and the insurance company is required to accept that and consider the claim. 3.Jonathan is bound to wait until the proper claim form arrives before he can proceed. 4.Jonathan can report this to the insurance commissioner's office as a breach of contract and request their intervention
Jonathan may submit the proof of loss in any form and the insurance company is required to accept that and consider the claim.
Scott is a small business owner. He is concerned that is he becomes disabled it will impede his ability to continue the operation of his business. His agent has discussed a Business Overhead Expense Policy. If Scott becomes disabled, what expenses will not be reimbursed by the Business Overhead Expense Policy? 1.Lease payments for his personal automobile 2.Lease payments for his copy machine 3.Salaries for his clerical staff 4.Lease payments for his office space
Lease payments for his personal automobile
Matthew is insured under his union plan. He develops End Stage Renal Disease, which culminates, with his need for dialysis. Mathew is eligible for Medicare at that point, but how long must his employer group be primary if he continues on dialysis? 1.Medicare will be primary after 90 days and the union plan is secondary. 2.Group coverage terminates immediately when Matthew is approved for Medicare. 3.Matthew may only be eligible in he has a kidney transplant. 4.Matthew's union plan must be primary for 30 months before Medicare will become primary or sooner if group coverage expires.
Matthew's union plan must be primary for 30 months before Medicare will become primary or sooner if group coverage expires.
Insurers may accept applications for life and health insurance from producers _____, if the insurer appoints the producer and updates the register within 30 days of the application date. 1.Not appointed by the insurer or on the insurer's register of producers 2.Not appointed by the NAIC 3.Not appointed by the Commissioner 4.Not approved by the NAIC
Not appointed by the insurer or on the insurer's register of producers
Olivia is employed by Affluent Mfg. Inc. When she came to work, her supervisor neglected to provide her enrollment material for the company's health plan, even though the company paid the full cost of the plan. Six months later Olivia suffers a severe accident in her home requiring hospitalization. What action will the insurance company take under these circumstances? 1.Olivia will have a reduced benefit, since the enrollment was not turned in on time. 2.Olivia should have inquired about her benefits; since she did not there is no coverage. 3.Olivia will be covered and Affluent Mfg. will be required to pay premiums from her date of eligibility. 4.Olivia will have to report this to the insurance commissioner and the will arbitrate a reasonable solution.
Olivia will be covered and Affluent Mfg. will be required to pay premiums from her date of eligibility.
Medicare Part B provides benefits for all of the following services EXCEPT: Surgeon's fees Outpatient prescription drugs Durable equipment Diagnostic lab and x-ray
Outpatient prescription drugs
Evelyn is looking at her options for health insurance. She has decided on a plan that has good flexibility on choice of doctors. She has chosen a: Fee for service POS HMO PPO
PPO
Tony (the insured) cancelled his health policy by submitting a written notice to the insurer. How are unearned premiums handled? 1.Returned to the insured using a pro-rata basis 2.They are returned to the agent 3.The insurer gets to keep them 4.Returned to the insured using a short-rate basis
Returned to the insured using a short-rate basis
James feels he needs to purchase a disability income policy, since his employer does not offer this coverage. Which of the following features should James consider in his purchase of a disability income plan? 1.Review the number of states in which the company offers disability insurance. 2.Review the coordination of benefits provision to see what is appropriate. 3.Review the definition of disability outlined in the policy. 4.Review the tax deductibility of the premiums with his tax advisor
Review the definition of disability outlined in the policy.
Under Medicare Part A, a spell of illness begins again and is subject to a new deductible for another admission when: 1.The patient has been discharged from a prior stay and 45 days have elapsed 2.The patient has been discharged from a prior stay and 30 days have elapsed 3.The patient has been discharged from a prior stay and 60 days have elapsed 4.The patient has been discharged from a prior stay and 90 days have elapsed
The patient has been discharged from a prior stay and 60 days have elapsed
Who administers the PCIP? The federal government The counties The cities The states
The states
The Patient Protection and Affordable Care Act allows states to combine their SHOP exchange with - 1.Commercial insurance companies 2.Their Medicaid recipients 3.Their exchange for individual consumers 4.All of the above
Their exchange for individual consumers
If a producer is terminated, the Insurer must notify the Commissioner if the termination was a result, in part or whole, by the producer's violation of Maryland insurance laws and regulations. How many days does the Insurer have to notify the Commission of the termination? Within 30 days 7 working days Immediately Up to 21 days
Within 30 days
All of the following acts are considered unfair trade practices EXCEPT: 1.replacement. 2.misrepresentation 3.coercion. 4.rebating.
replacement.
A hazard is best defined as: a peril. a loss. something that increases the chance of loss. a legal hazard.
something that increases the chance of loss
Which of the following characterizes risk pooling? none of the above spreading risk over a small number of people spreading risk over a large number of people dissimilar risks
spreading risk over a large number of people
Melvin has a long-term care policy with a 30-day elimination period. The policy has a daily benefit of $100/day. The policy has a 3-year benefit period. If Melvin is confined to a nursing home for 9 months, how much in benefits will his policy pay? 1.$27,000 2.$18,000 3.$24,000 4.$17,000
$24,000
An employer offers group insurance to his employees on a non-contributory basis. How many of his employees must be offered coverage under the group? 80% 75% 100% 90%
100%
For dependents that were not previously eligible for enrollment in the Maryland Health Connection, how much time must they be given to enroll after being sent a notice that they are now eligible? 1.30 days 2.45 days 3.60 days 4.90 days
30 daya
A Medicare Supplement policy is issued with a "Free Look" period. This is usually a minimum of: 10 days 45 days 30 days 20 days
30 days
The Commissioner is given broad powers to establish insurance rules, hold hearings and issue orders, take disciplinary action, and assess penalties and fines. He may examine and investigate individuals or entities as deemed necessary, but must conduct examinations at least every ¬¬¬¬____________: 18 months 2 years 5 years 48 months
5 years
The Patient Protection and Affordable Care Act requires a gold health insurance plan to meet what specific actuarial value? 80% 70% 90% 100%
80%
The Patient Protection and Affordable Care Act defines "affordable" health insurance when the cost of the insurance is below what percentage of an employee's household income? 15% 9.5% 20% 7.5%
9.5%
In all of the following scenarios, the statements regarding loss are false EXCEPT: 1.Betty submits a claim for $300 to her insurance company. The amount of Betty's loss is $300. 2.Andrew gets in a fender bender, causing $3,000 in property damage to his car. He submits the claim to his insurance company, and the insurance company pays for the repairs. Andrew did not experience a loss. 3.Susie Q purchases a life insurance policy that will pay $100,000 to a beneficiary upon her death. The amount of loss upon Susie Q's death is $1,000,000. 4.Jim Bo has a renter's insurance policy that pays him $2,000 for loss of property caused by theft even though the actual cash value of his loss is $3,000. The amount of Jim Bo's loss is $2,000.
Betty submits a claim for $300 to her insurance company. The amount of Betty's loss is $300
The term describing the insured's notification to the insurer requesting payment for a covered loss is: Premium. Deductible. Claim. Limit of liability.
Claim.
Joey would try and lure prospective clients to purchase a policy from him by manipulation. He would subtly suggest or offer to recommend the client for membership to a selective country club if the person purchases a particular policy from Joey. This type of practice is called: 1.Intimidation 2.Bait and switch 3.Discrimination 4.Coercion
Coercion
Which of the following types of policies combine multiple benefits and provides a broader range of coverage? 1st Dollar plan Hospital Expense Comprehensive Major Medical Hospital Indemnity
Comprehensive Major Medical
o elect continuation of coverage, the insured must request continuation during the election period (45 days after the date of the _____). Employers must provide the proper forms for election within 14 days of receipt of request of election. 1.Arraignment, annulment, or release on bond 2.Indictment, cancellation, or invalidation 3. incarceration, or arraignment 4.Death, divorce, or termination
Death, divorce, or termination
Waiver of premium is a common benefit or option for which of the following types of policies: Disability and long term care plans Disability and medical plans Limited benefit plans Dread disease policies
Disability and long term care plans
An HMO will offer basic services to all members. All of the following services are offered as a basic service EXCEPT 1.Doctor services 2.Rehabilitation therapy 3.Durable equipment 4.Preventive and routine care like annual physical and immunizations
Durable equipment
Martin and his friends were at a local tavern celebrating his birthday. Martin left the bar to drive home, but unfortunately, he was involved in a fatal accident, killing himself and two other individuals. An autopsy reveals that Martin was well above the legal limit on his blood alcohol test. Martin's family will receive the following from his Accidental Death and Dismemberment policy: 1.His family will receive reduced benefits since other deaths were involved. 2.His family will receive the principal sum since this was death 3.His family will receive no benefits, since he was in the act of committing a felony 4.His family will receive no benefits since there was no dismemberment involved.
His family will receive no benefits, since he was in the act of committing a felony
Mark is a producer and has authority to sell life and health insurance, but is not associated with ACME Insurance company, but they can accept applications from him if: 1.The insurer can issue the insurance, but it must contain a rider which clearly states the relationship between the insurer and producer 2.The insurer cannot accept applications from producers not associated with the company until after they have been appointed 3.The insurer can issue the insurance and appoint the producer immediately if his license was issued in the state of Maryland 4.If the insurer appoints him as a producer and updates the register within 30 days of the application date
If the insurer appoints him as a producer and updates the register within 30 days of the application date
Most insurers do not generally sell individual dental coverage. It is usually included in a group plan. Which of the following is not a common benefit in a dental plan? Fillings X-rays Implants Cleaning
Implants
An exclusion that always appears in a health policy is: 1.No coverage for drug or alcohol related illness 2.Hernia from an accident 3.Travel outside of the USA 4.Injury in the act of committing a felony
Injury in the act of committing a felony
Isaac is enrolled in his employer's group plan on a non-contributory basis. He contract pneumonia and is hospitalized. Isaac is reimbursed for the medical expense he incurred less a $500 deductible. How much of his benefits will be taxed? 1.Isaac will have to include only the benefits that exceed 7.5% of his adjusted gross income in his income. 2.Isaac will have to include benefits in his income if his adjusted gross income is more than $65,000. (He is single) 3.Isaac will have no tax liability, as medical benefits are not taxable. 4.Isaac will have to include all benefits beyond the $500.00 deductible
Isaac will have no tax liability, as medical benefits are not taxable.
Medicare is funded primarily from which of the following sources? 1.It comes from a payroll tax ear marked for Medicare 2.Loans from China provide most of the funding 3.The premiums that retirees pay provides most of the funding 4.It comes from the general revenue fund from all tax sources
It comes from a payroll tax ear marked for Medicare
Medicaid is a needs tested program. It provides medical benefits for the poor and indigent. It is funded as follows: 1.Employer taxes based on payroll 3.Payroll taxes from the employed 4.Part of Medicare 5.Jointly funded by individual states and the federal government
Jointly funded by individual states and the federal government
In addition to any greater penalty provided under the law, violation of Maryland insurance laws and regulations is a ________offense, subject to a fine up to $100,000. 1.Federal 2.Felony 3.Misdemeanor 4.None of the Above
Misdemeanor
The N.A.I.C. proposes many pieces of model legislation in order to help standardize policy wordings, regulations and required benefits. The initials NAIC stand for: 1.National Association of Insurance Commissioners 2.National Association of International Companies 3.National Association of Interlocking Consortiums 4.National Association of Insurance Companies
National Association of Insurance Commissioners
What gives the insurance company the right to assume rights of the insured in order to sue a responsible third party when damages are inflicted on the insured? 1.Warranties 2.Subrogation 3.Concealment 4.Utmost good faith
Subrogation
Mr. Frankston is concerned about the rising cost of health insurance premiums for the group health plan he provides for his employees. His accountant has calculated the premiums he pays vs. the claims his employees receive and finds that he might benefit by accepting some of the risk directly by his company. He wants to avoid premium taxes and minimize administrative expense. He will most likely find this type of plan through a: PPO plan HMO plan TPA arrangement ASO arrangement
TPA arrangement
An insurance agent told a member of his church who had recently experienced several personal and financial losses that he could see that she got a more favorable rate on her insurance policies than her health and general circumstances would warrant. The woman had been his kindergarten teacher and was a pillar in the community's life. He wanted to help her. Which of the following is FALSE? 1.The agent was breaking the law. 2.The agent is compassionate. 3.The agent was engaging in unfair discrimination. 4.The agent was engaging in twisting.
The agent was engaging in twisting.
Under which of the following circumstances will the Commissioner not waive the license application requirements for an applicant who is not a resident of Maryland? 1.The applicant has a valid license in his/her home state 2.The applicant pays applicable nonresident license fees 3.The applicant's home state does not award nonresident licenses 4.The applicant submits the home state application
The applicant's home state does not award nonresident licenses