MA Insurance Exam Set 2

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT a)Tax delinquencies. b)Late payments. c)Failure to pay off a loan. d)Disputes regarding consumer report information.

d)Disputes regarding consumer report information. As defined by the Act, negative information includes information regarding a customer's delinquencies, late payments, insolvency or any other form of default. Customer disputes are not considered negative information, and, in fact, must be included in consumer reports.

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

All providers will have the same coverage options and conditions for each plan.

Under a Key Person disability income policy, premium payments

Are made by the business and are not tax-deductible.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire Contract Clause

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid.

Which of the following factors would be an underwriting consideration for a small employer carrier? a)Health status b)Medical history of the employees c)Percentage of participation d)Claims experience

Percentage of participation Coverage under a small employer health benefit plan is generally available only if at least 75% of eligible employees elect to be covered.

Which of the following are the main factors taken into account when calculating residual disability benefits?

Present earnings and earnings prior to disability

A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called

prepaid plan

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years. Anyone engaged in the business of insurance whose activities affect interstate commerce, and who knowingly makes false material statements may be fined, imprisoned for up to 10 years or both. If the activity jeopardized the security of the accompanied insurer, the punishment can be up to 15 years.

What is the minimum age requirement for an insurance producer in this state?

18 years old

Health benefits plans are prohibited from including waiting periods that exclude coverage for more than

4 months Similarly, health benefits plans are prohibited from including waiting periods that exclude coverage for more than 4 months (following the date of enrollment).

All of the following are advantages of an HMO or PPO for a Medicare recipient EXCEPTa)Prescriptions might be covered, unlike Medicare.b)Health care costs can be budgeted.c)There are no claims forms required.d)Elective cosmetic procedures are covered.

Elective cosmetic procedures are covered. The advantages of an HMO or PPO for a Medicare recipient may be that there are no claims forms required, almost any medical problem is covered for a set fee so health care costs can be budgeted, and the HMO or PPO may pay for services not usually covered by Medicare or Medicare supplement policies, such as prescriptions, eye exams, hearing aids, or dental care.

Medical savings accounts are only available to groups of how many employees?

No More than 50

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?

Parts A and B of Medicare

Which of the following is true regarding benefits paid to disabled employees?a)Tax withholding is required if the employee paid the premium. b)Disability benefits are not taxed. c)They may be subject to taxation if the premium was paid by the employer. d)They are exempt from taxation if any portion of the premium was paid by the employee.

They may be subject to taxation if the premium was paid by the employer.

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority. Title 18, US Code, sections 1033-1034 makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce without receiving written consent from an insurance regulatory authority.

An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?

1 The additional monthly benefit rider stipulates that the insurer will pay benefits comparable to what Social Security would pay. After a year, the insurer ends the benefit and assumes that Social Security will begin benefit payment.

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

3000

In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT a)Increase benefits for a period of one year. b)Submit evidence of insurability. c)Satisfy a longer probationary period. d)Reduce benefits for a period such as one year.

Increase benefits for a period of one year. Dental claims expenses are substantially higher in the group dental plan the first year than in subsequent years. This is because individuals delay their dental needs until the dental plan becomes effective. To minimize the effects of this adverse selection, the insurer will utilize methods to combat this first year expense.

Which of the following refers to "own occupation" disability? a)Insured is unable to perform duties of any occupation. b)Insured business owner is unable to perform the duties of his/her own business. c)Insured business owner is unable to perform the duties of any related business. d)Insured is unable to perform duties of the occupation for which he/she was educated and trained.

Insured is unable to perform duties of the occupation for which he/she was educated and trained. under an Own Occupation plan, if the insured cannot perform duties of his/her current job or the job that he/she was educated and trained for, disability benefits will be paid, even if the insured would be capable of earning income at a different occupation.

Which of the following insurance coverages would be allowed with an MSA? a)Medicare b)Individual health insurance c)Long-term care d)Medicaid

Long-term care MSA participants cannot have Medicare or any other health coverage that is not an HDHP. The following are exceptions: workers compensation, specific disease or illness, a fixed amount per day of hospitalization, accidents and/or disability, dental care, vision care, and long-term care.

Qualified medical expenses paid for participants in a Medical Savings Account (MSA) are

Not taxable. Employees use the funds from an MSA to cover health insurance deductibles during the year. MSA funds are taxable only when distributions are made for reasons other than qualified medical expenses.

Which of the following is NOT a feature of a noncancellable policy? a)The guarantee to renew coverage usually applies until the insured reaches certain age. b)The insured has the right to renew the policy for the life of the contract. c)The insurer may terminate the contract only at renewal for certain conditions. d)The premiums cannot be increased beyond the amount stated in the policy.

The insurer may terminate the contract only at renewal for certain conditions. The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.

Which of the following is NOT the purpose of HIPAA? a)To prohibit discrimination against employees based on their health status b)To limit exclusions for pre-existing conditions c)To provide immediate coverage to new employees who had been previously covered for 18 months d)To guarantee the right to buy individual policies to eligible individuals

To provide immediate coverage to new employees who had been previously covered for 18 months HIPAA does not prohibit employers or providers from establishing waiting periods or pre-existing conditions exclusions, in which case the coverage to new employees would not be immediate.

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. Insurers use this law in order to predict certain types of losses and set appropriate premiums.

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? a)The PPO will pay the same benefits as if the insured had seen a PPO physician. b)The PPO will pay reduced benefits. c)The PPO will not pay any benefits at all. d)The insured will be required to pay a higher deductible.

The PPO will pay reduced benefits.