chapter 16 341 Rabel

Which of the following statements about group insurance underwriting principles is true?

A flow of people through the group is desirable.

Which of the following statements about group long-term disability income plans is true?

Coverage is provided for both occupational and nonoccupational disabilities.

All of the following statements about HMOs are true EXCEPT

HMO members pay nothing for medical care until care is provided, then they must pay high deductibles and large coinsurance payments.

Which of the following statements about cafeteria plans is (are) true?I. Unspent flexible spending account balances are refunded in cash to the employee, tax-free, at year-end.II. Cafeteria plans enable employees to select benefits that meet their specific needs.

II only

Maria is covered under a group medical expense plan as an employee. She is also covered under her husband's plan as a dependent. If Maria is hospitalized, how will each plan respond to her medical bills if both plans have the typical coordination-of-benefits provision?

Maria's plan is primary, and her husband's plan is excess.

Which of the following statements about group short-term disability income plans is true?

Most plans provide benefits for total disabilities only.

Turner Company self-insures its group health insurance plan. Turner entered into an agreement with ABC Insurance through which ABC handles the plan design, claims processing, and record keeping for Turner. The agreement between Turner and ABC is called a(n)

administrative services only contract.

The period of time during which an employee can sign up for group insurance coverage without furnishing evidence of insurability is called a(n)

eligibility period.

Which of the following is a characteristic of a health maintenance organization (HMO)?

emphasis on cost containment

An HMO physician who determines if medical care from a specialist is necessary is called a(n)

gatekeeper.

High deductible group health insurance plans have all of the following characteristics EXCEPT

low coverage limits

An HMO that contracts with two or more independent group practices to provide medical services to covered members is called a(n)

network model HMO.

Marv is covered by a group health insurance plan at work. His employer funds the entire cost of the group health insurance. Because of this characteristic, the group health insurance plan can be described as

noncontributory.

Under many cafeteria plans, employees make premium contributions with pre-tax dollars and a salary reduction that are used to purchase group health insurance or dental insurance. This type of cafeteria plan is called a

premium conversion plan.

Which of the following statements about group insurance underwriting principles is (are) true? I. If a plan is contributory, 100 percent of the eligible employees must be covered. II. Ideally, there should be a flow of younger people into the group and older people out of the group.

II only

Which of the following statements about recent developments in group medical coverage is (are) true?I. After increasing for many years, the premiums for group medical expense coverage have finally started to decline. II. A growing number of employers are offering plans with higher deductibles for employees.

II only

Which of the following statements is (are) true with regard to group life insurance? Most group life insurance is whole life coverage. Most group life insurance plans allow a modest amount of life insurance on the employee's spouse and dependent children.

II only

Which of the following statements regarding group long-term disability income insurance plans is (are) true? These plans are usually limited to occupational disabilities. These plans typically use a more restrictive definition of disability after an initial period of disability, such as two years.

II only

Some employers offer employees a choice of health care plans which are designed to make employees more sensitive to health care costs, to provide an incentive to avoid unneeded care, and to seek low-cost health care providers. Such plans are called

consumer-directed health plans.

All of the following are reasons why employers self-insure medical expense plans EXCEPT

to transfer the risk of medical expenses to another party.

Which of the following statements about HMO managed care plans is (are) true? I. There is an emphasis on controlling costs.II. They provide narrow, limited, medical services to members.

I only

Which of the following statements regarding recent developments in employer-sponsored health plans is (are) true?I. Preferred provider organizations (PPOs) continue to dominate group health insurance markets. II. The number of employers offering medical benefits to workers who retire early has increased.

I only

Which of the following statements about the continuation of group health insurance under the COBRA law is true?

A continuation of coverage must be made available even if an employee voluntarily terminates employment.

Which of the following statements about the eligibility requirements for group insurance is true?

An employee must be actively at work on the day the employee's group insurance becomes effective.

Which of the following is (are) characteristics of HMO managed care plans? I. Unlimited choice of physicians and hospitalsII. Emphasis on controlling the cost of covered services

II only

A key feature of group medical expense plans is the employee being required to pay a percentage of covered expenses in excess of the deductible. This feature is

coinsurance.

Which of the following statements about group term life insurance is true?

Experience rating is used in group term life insurance plans.

Which of the following statements about recent developments in employer-sponsored health plans is true?

High-deductible health plans with a savings option have continued to grow.

The Affordable Care Act created program that enables small firms to offer health insurance to their employees. The program provides flexibility, choice, and the convenience of on-line account management. This program is called the

SHOP Marketplace program.

Which of the following statements about group insurance is true?

The actual experience of a large group is a factor in determining the premium that is charged.

Which of the following statements about group short-term disability income plans is true?

The amount of disability income benefits typically is equal to some percentage of a worker's normal earnings.

All of the following statements about cost controls in dental insurance plans are true EXCEPT

To eliminate small claims, there is no coverage for routine oral examinations, X-rays, or cleaning teeth.

Reasons for having a minimum participation requirement before a group is eligible for insurance include which of the following? I. To lower the expense rate per unit of insurance II. To minimize the possibility of insuring a group which consists largely of unhealthy individuals

both I and II

Which of the following statements about Blue Cross and Blue Shield plans is (are) true? Most plans combine Blue Cross and Blue Shield into a single entity. Some form of managed care plan covers the majority of Blue Cross and Blue Shield enrollees.

both I and II

Which of the following statements about group accidental death and dismemberment (AD&D) insurance is (are) true?I. The principal sum is paid if the employee dies in an accident.II. A percentage of the principal sum is paid for certain types of dismemberments.

both I and II

Which of the following statements about preferred provider organization (PPO) health plans is (are) true?I. A PPO plan contracts with health care providers to provide medical services to members at reduced fees. II. Plan members are given a financial incentive to use PPO providers rather than other providers.

both I and II

Which of the following statements concerning managed care plans is true? I. Most employees are covered under some form of managed care plan.II. Managed care plans emphasize cost controls and preventative care.

both I and II

Which of the following statements is (are) true concerning high deductible health plans? I. An employee can withdraw money tax-free from a health savings account or health reimbursement arrangement to pay covered medical costs.II. There is a cap on an employee's out-of-pocket expenses under the plan.

both I and II

Nancy's employer provides an interesting employee benefit plan. Each employee is given 250 employee benefit credits to spend. A wide array of benefits is available, and the employee uses benefit credits to select the benefits that he or she wants. This type of employee benefit plan is called a(n)

cafeteria plan.

A deductible under which expenses are accumulated on an annual basis, and once a specified total is reached, the deductible is satisfied for the year is called a

calendar-year deductible.

HMOs typically pay network physicians or medical groups a fixed annual or monthly payment for each member, regardless of the frequency or type of service provided. This payment is called a

capitation fee.

The Affordable Care Act requires employers with 100 or more employees to provide health insurance on the employees or pay a penalty if at least one employee receives a tax credit and coverage through the Health Insurance Marketplace. This requirement-providing insurance or paying a fine-is known as the

employer shared responsibility.

An employer-funded plan with favorable tax advantages, which repays employees for medical care not covered by the employer's standard medical plan is a(n)

health reimbursement arrangement (HRA)

Under older group medical expense plans, physicians were paid a fee for each covered service and were reimbursed on the basis of reasonable and customary charges, up to a maximum limit. These older group medical expense plans were called

indemnity plans.

Med Profs is a group of 18 doctors. These doctors work out of their own offices and treat patients on a fee-for-service basis. In addition, Med Profs doctors also agree to treat HMO members at reduced fees. The type of HMO that uses organizations like Med Profs is called a(n)

individual practice association plan.

Tracy is covered by a group dental insurance plan at work. At her latest check-up, the dentist notes that she needed crowns on two teeth. Under her plan, if the cost of dental work will exceed $500, the dentist submits the treatment plan to the insurer to calculate what the plan will cover and what the employee will pay. This provision is known as a

predetermination of benefits.

New employees at Jarvis Company cannot participate in the group term life insurance plan until they have worked at the company for three months. This initial period before a new employee can participate is called a(n)

probationary period.

Which of the following is a provision of the Affordable Care Act?

prohibition of harmful practices by insurers.

Doris started a business 2 years ago. The business has been successful, and Doris is thinking about offering some employee benefits for her workers. She plans to offer a group term life insurance benefit. All of the following are usual eligibility requirements for participation in a group life insurance plan EXCEPT

satisfy a 2-year probationary period.

Advantages of cafeteria plans include all of the following EXCEPT

simplicity of benefit administration.

Under one type of HMO, the physicians are employees of the HMO and are paid a salary and sometimes an incentive bonus to hold down costs. This type of HMO is called a(n)

staff model.

Connors Company self-funds the medical expense benefits that it provides to its employees. Connors Company has a contract with a commercial health insurance company providing that the health insurance company will pay all claims in excess of $250,000. The arrangement with the health insurance company is called

stop-loss insurance.

Most group health insurance plans have adopted the coordination-of-benefits rules developed by the National Association of Insurance Commissioners. Under these rules, if a dependent child is covered by both of the health insurance plans of the child's married parents, which health plan is primary for the child's medical expenses?

the plan of the parent whose birthday occurs first in the calendar year

What is the purpose of stop-loss insurance that is used with self-insured group medical expense plans?

to have a commercial insurer pay claims that exceed a specified limit