Group Life/Health Insurance 15Q
Walter has a plan through his employer. His benefits manager tells him that his plan is a "First Dollar Policy" This type of plan is called:
A basic medical plan
All of the factors below are factors in underwriting a group health insurance plan EXCEPT:
Individuals with certain health conditions
Individuals who join a group policy must undergo a waiting period called:
Probationary Period
Universal life was developed from whole life and they have the same two components - cash value and death protection. All of the statements are true about universal life policies EXCEPT:
Universal life policies are only subject to the interest rates stated in the contract.
Group insurers may NOT request medical information of groups -
50 or more
Contributory
Is where premiums are paid JOINTLY by the policy owner and the Insured.
Non-contributory
Is where the premiums are paid ENTIRELY by the policy owner.
Non-contributory Plans Require:
-100% of the group's eligible employees to participate. -Must cover individuals immediately after the probationary period expires.
Which of the following is true about VGLI (Veterans Group Life Insurance)?
-It is convertible term insurance -It is 5-year renewable insurance
Group Life Standard Provisions:
-31 day grace period -Conversion right -Evidence of insurability must be provided if an eligible individual for coverage enrolls after the enrollment period -1 or 2 year incontestability period from the date the insured's coverage took place
Contributory Plans Require:
-75% participation of the group's eligible employees. -After satisfying the probationary period, Individuals must enroll during the group plans eligibility period (Spanning a period of 30-31 days)
Group Life is different from Individual life in that enrollees typically:
-Do not have to provide evidence of insurability -Are not issued individual policies -Do not own the contract
Underwriting Group Life Insurance:
-Premium rates are based on claim experience of the entire group, not individual -Master contract holder must pay for at least a portion of the premiums, but it permitted to pay the entire cost of the premiums
COBRA is a provision that allows a terminating employee to continue health insurance under his employer's plan for a specified period of time. If an employer FAILS to allow this benefit, his consequences may include which of the following?
-Private lawsuits under ERISA -IRS excise taxes -Liability for past and future medical expenses during the qualified beneficiary's continuation period
Creditable coverage may be applied to reduce
-Waiting periods -Exclusions for preexisting conditions
Wildlife Manufacturing Company has a non-contributory health plan. How many employees must participate to meet enrollment requirements?
100%
The longest pre-existing period for conditions that occurred prior to employment under HIPAA is:
12 months
What kind of group would be covered by a franchise life insurance plan?
Groups smaller than the minimum number required by state law to cover a group of people that do not qualify for true group insurance
HIPAA requirements deal with, on a federal level, groups of what size?
50 or more
What is the maximum amount of insurance available for DEPENDENTS under an employee's group coverage?
50% of the employee's coverage
HIPAA rules on renewability apply to:
Individual policies
Under HIPAA an insurance company may look back how far on pre-existing conditions for a late enrollee?
18 months
What is the maximum length that COBRA benefits may be extended:
36 months
Medical Examination's are often required for:
Individual Policies, applicants for group insurance do not have to undergo medical examination
the Law of Large numbers applies to
Adverse selection, In group Life Insurance
Matilda is starting a new job on Monday. She has been covered under her prior employer's group plan for 6 months, but she has been treated for a stomach disorder just prior to joining her new employer. When will she have full coverage under the new plan if they do NOT offer guaranteed issue?
After six months, since Matilda has 12 months of credible coverage
A group plan will generally accept all employees without underwriting questions. What are the circumstances where the insurance company can accept or reject a member under a group plan?
An employee has declined coverage when eligible and later elects to join the group
Acme Plumbing is purchasing a group life plan for its employees. What type of plan is MOST common for this type of purchase?
Annual renewal term is most frequently used. It is less expensive and conforms to a company's annual budget cycle.
An employee changes employers and has diabetes. He has worked for his previous employer for 4 years and is covered by a HIPAA eligible group. When will he have full coverage under the new employer?
At the end of any eligibility period under the new employer plans
Guaranteed issue is a process by which eligible employees may enroll in the company's group plan without restriction. Guaranteed issue is usually available on what basis?
At the time of hire or other annual open enrollments
A fraternal benefit program should have all of the following components to qualify EXCEPT:
Be incorporated under state law
Life insurance can fulfill a variety of personal and family needs in addition to the traditional death benefits. Which of the following is another use for whole life insurance?
Cash for emergencies
Whole life policies have Nonforfeiture value. Which of the following is NOT an element of the Nonforfeiture value?
Cash withdrawn does not reduce the face value of the policy.
For a benefit plan to be considered non-contributory:
The employer pays 100% of the cost.
Group life insurance must be established by and eligible group, such as-
Employer or Association
The Health Insurance Coverage Continuation Act regulates which of the following?
Establishing requirements for insurers who market to small employers with 20 employees or less
To qualify as an association group benefit program, an organization must:
Exist for at least two years
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:
Express authority
An employee's eligibility for group enrollment may be determined by all of the following EXCEPT:
Gender
Underwriting considerations for group plans employ which of the following considerations?
Groups usually do not have a requirement for medical exams.
The process by which an employee may enroll in an employer group insurance plan without regard or restriction for any pre-existing condition is referred to as:
Guaranteed Issue
A Medicare Supplement plan is written on which of the following bases?
Guaranteed renewable
Valerie has a health insurance policy that states that the insurance company may not cancel the policy, but they may increase the rates on a specified class of insureds. Valerie has a:
Guaranteed renewable policy
In order to be considered an association, a group must:
Have been in existence for 2 years or more and be a natural group
When comparing individual disability income policies with group disability income policies, group policies are generally:
Less costly and have more liberal benefits
Policy owner receives the -
Master policy
Medicaid will provide all of the following benefits EXCEPT:
Monthly Income
When group insurance is compared to individual insurance, all of the following are true EXCEPT:
More people are covered by individual plans than by group plans.
Group Life Insurance
Must cover at least 10 people & be established for the benefits of the members
Betty has enrolled in an HMO through her employer. The booklet she receives indicates that she may choose any doctor or specialist without a referral, but approved HMO doctors will provide service at lower or no out-of-pocket cost. Betty is enrolled in:
Open panel HMO
An HMO must have a certificate of authority to operate in a given jurisdiction. Most states require an HMO to provide all of the following services EXCEPT:
Prescription Drugs
COBRA is intended to accomplish which of the following in regard to a group health policy?
Protect employees and their dependents from immediately losing health insurance under the group plan in the event of a separation by a listed number of events
Mrs. Brown owns a boutique. She has 20 employees that are covered by a group life policy from Sunflower Insurance. Which of the following is true if Mrs. Brown decides NOT to renew her policy and ceases paying the premiums?
Sunflower Insurance will notify Mrs. Brown, who will then notify her employees of the cancellation.
The SGLI (Servicemember's Group Life Insurance) provides coverage for personnel enlisted in the service. What type of basic coverage is issued to an eligible member under the SGLI program?
Term life insurance
Straight whole life insurance is an insurance policy with level contributions that lasts a lifetime. These policies (contracts) offer a cash value designed to be a reserve that would build up against the known claim - the death benefit. Which of the following statements is NOT true about a straight whole life policy?
The cash value goes to the beneficiary upon the death of the insured.
Which of the following is a FALSE statement regarding group credit life policies?
The debtor is the beneficiary.
An association is required to do all of the following to qualify for an association group plan EXCEPT:
The employer must pay all premiums in full for his employees.
Mr. Jones was laid off from the Acme Company on August 3rd. He died on August 30th. Under The Acme Company group policy, what would the insurer pay?
The full face amount of the policy, since the insured was within 31 days
Equity indexed universal life works the same way as universal life EXCEPT:
The nonguaranteed indexed rate can reach yields of 30% or more.
Once the insurer had looked at the facts pertaining to a life insurance applicant, the insurer will categorize the risk and calculate premiums based on:
The risk classification and mortality, interest earnings and expenses
What conversion rights does a surviving spouse have under a group plan?
The spouse has the same rights that the employee had and the spouse can convert to an individual policy without proof of insurability.
Sally and James are married and they work for the same employer. Both have family coverage under the employer group plan, since the employer pays the full premium for all employees. What will the reimbursement be in the event that Sally or James has a claim?
The spouse who has the sickness or accident will receive reimbursement up to the benefit maximum under the contract, and coverage for the well spouse will make up the difference up to 100% of the bill, but there will be no excess payment.
Why do group policies include coordination of benefit (COB) provisions?
To limit payment to 100% of the loss and no more
Qualified retirement plans need to be approved by the IRS. When an employee withdraws from a qualified plan, which of the following is true?
Withdrawals are taxable income
Individuals applying for group life insurance:
do not have to undergo medical examination
In order to be considered an eligible group, a professional association must -
have at least 100 members.
Proof of insurability is ONLY required for group insurance -
if enrolled after the enrollment period
Groups are rated based on average age, proportion of men to women, and larger groups pay lower premiums. Thus,
not having to undergo a medical exam is a huge benefit of a group plan.
Karl has an individual health insurance policy with Wildlife Mutual. Wildlife also sells group contracts and his employer decides to purchase group coverage for his employees through that company. Karl enrolls in the group, but he also continues to pay premiums on his individual plan. When Karl has a claim, what can he expect?
she will receive full benefits from both contracts, since there is no coordination of benefits on individual plans.
Insurers and employers generally require employees to be full-time and -
the probationary period will be between 30-90 days before coverage