PA Accident and Health Insurance Chapter tests

a policyholder has a major medical plan with a 80/20 coinsurance and a deductible of 75$. if the insured has previously met her deductible and receives a bill for $175, how much with the insurer pay

$140 (insured met her deductible, eligible amount for claim is entire $175, 80 of 175 is 140)

An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for?

$200 (20%)

An insured has a stop-loss limit of $500 and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much with the insured hav

$5,000 (they Pau the stop-loss limit

if an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered a taxable income of a $1,000 monthly disability benefit

$500

Kim has health insurance with a deductible of 500 and an 80/20 coinsurance. how much will she pay if she incurs a loss of $1,500

$700 (she pays the deductible plus 20% coinsurance)

sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of

100% of costs

In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at

60% of the benefit

at what age will a personal normally enroll with an insurance carrier under a Part C medicare advantage plan

65

which of the following does coordination of benefits allow

Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid

what is implied authority defined as

Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

Business overhead expense policy

An example of risk sharing would be

Doctors pooling their money to cover malpractice exposures

What type of policy would only provide coverage for specific types of illness (cancer, stroke, etc)?

Dread disease insurance

Donna and Mary were racing bicycles in a store parking lot while being cheered on by fellow employees. Mary ran into John, another employee, who happened to be taking out the garbage. Both Mary and John are injured. Who would most likely be covered under Workers' Compensation?

John

Small employers who are sponsored by an insurer to provide group benefits to its employees are called

MEWA

A type of insurer that is owned by its policyowners is called

Mutual

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

No deductible payment is required

The elimination period under a hospital indemnity plan is

The specific number of days an insured must wait before becoming eligible to revise benefits for each hospitalization

Part A Hospital expense coverage provided under Medicare is automatically made available to each of the following EXCEPT

a 70 year old NOT eligible for social security

a fee for service health insurance plan will normally cover

a disease

Major medical insurance will typically cover medical expenses that result from

a negative reaction to a prescribed medication

A plan in which an employer pays insurance benefits from a fund derived from the employers current revenue is called

a self-funded plan

people with higher loss exposures have the tendency to purchase insurance more often than those at average risk. this is called

adverse selection

Medical expense insurance would cover

an injury occurring at the insured's residence

According to life insurance contract law, insurable interest exists

at the time of the application

the purpose of the coordination of benefits provision group in accident and health plans is to

avoid overpayment of claims

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must

be the same and the premium cannot exceed 102%

Why are dividends from a mutual insurer not subject to taxation?

because the dividends are considered to be a return of premium

An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. this list is called

benefit schedule

Maria is a preferred provider organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result

care is covered

all of the following are elements of an insurance policy EXCEPT

claim forms

Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)

concealment

what is the primary purpose of a rating service company such as A.M best?

determine financial strength of an insurance company

a pharmacy benefit covers prescription drugs derived from a life called a(n)

drug formulary

All of these are characteristics of a major medical expense policy EXCEPT

elimination periods

Under group health insurance, a certificate of coverage is issued to the

employee

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the

employees waiting period for coverage of a preexisting condition can be reduced under the new employers health plan

which of the following would be considered a possible applicant and contract policyholder for group health benefits

employer

The limited period of time given to all members to sign up for a group health plan is called the

enrollment period

a professional liability for which producers can be sued for mistakes of putting a policy into effect is called

errors and omissions

the waiting period for a disability insurance policy

excludes payments for a short term illness or injury

When the principal gives the agent authority in writing, it's referred to as

express authority

which of these is NOT a qualifying event for Medicare

falling below the federal poverty level

a group disability income plan that pays tax free benefits to covered employees is considered

fully contributory

An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n)

group HMO

which of the following is considered to be an event of condition that increases the probability of an insureds loss

hazard

which of the following is NOT included under a health benefit plan?

hospital indemnity plan

the power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority

implied

What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do

in the event of employment termination, group health insurance can be kept in the employee pays the premiums

Which of the following is NOT taken into consideration when determining eligibility for medicare benefits

income

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment

indicates a preexisting condition

Health insurance will typically cover which of the following perils

injury due to accident

which of the following is present when an applicant stands to lose value if the insured dies

insurable interest

who is responsible for assembling the policy forms for insureds

insurance carriers

The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT

insurance sales calls

an accident and health policy that provides reimbursement benefits makes them payable to the

insured

which of the following statements regarding group disability income insurance is TRUE

it provides benefits for non occupational illnesses and injuries

a common exclusion with vision plans is

lasik surgery

the authority granted to a licensed producer is provided via the

law of agency

how do insurers predict the increase of individual risks

law of large numbers

insurance companies determine risk exposure by which of the following

law of large numbers and pooling

A dread disease policy is considered to be a type of

limited health insurance policy

low frequency diseases can be exclusively covered by what kind of health insurance

limited policies

An insurers ability to make unpredictable payouts to policy owners is called

liquidity

all of the following are examples of pure risk EXCEPT

losing money at a casino

what is the contract called that is issued to an employer for a group medical insurance plan

master policy

Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which day would Sonya have coverage

may 30

which of the following is medicare Part B also known as

medical insurance

Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?

medicare is the secondary payer

Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability?

own occupation

the cause of a loss is referred to as a(n)

peril

what is known as the immediate specific event causing loss and giving rise to risk

peril

Which of the following would evidence ownership in a participating health insure contract

policy ownership

a rehabilitation benefit is intended to

prepare the insured to return to employment

Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a

presumptive disability

According to the principal of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and its

promises made

what is considered to be the primary reason for buying life insurance?

provide death benefits

Who is the individual paid on a fee-for-service basis

provider

When comparing an HMO to a PPO, the PPO

provides a greater choice of providers

an indemnity plan

provides the insured a specific dollar amount for services

The role of the federal government was expanded when Medicaid was established by allowing the state to

receive matching funds to expand public assistance programs

ABC insurance company transfers part of their risk to XYZ insurance company. this situation is called

reinsurance

a life insurance company has transferred some of its risk to another insurer. the insurer assuming the risk is called the

reinsurer

what are applicants statements concerning occupations, hobbies, and personal health history regarded as

representation

an individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in

risk avoidance

health insurance involves two perils, accident and

sickness

Typically, Long-Term Disability benefits are coordinated with which benefit plan?

social security

An insurers claim settlement practices are regulated by the

state insurance departments

in an insurance contract, the applicants "consideration" is the

statements made in the application and the premium

A(n) _______ company Is owned by its shareholders

stock

Distributions from a Health Savings Account (HSA) for qualified medical expenses are

tax-free

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?

taxes must be paid on 75% of the benefits received

When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur?

the insurer will pay a reduced amount

under a contract of adhesion

the terms must be accepted or rejected in full

legal purpose is a term used in contract law meaning

there must be legal reasons for entering into the contract

insurance represents the process of risk

transference

"Maximum benefits" refers to the

upper limit of the total lifetime benefits the insurance company will pay

funding for medicare Part B is partially provided by

users premiums

An individual can enroll in a Part C medicare advantage plan at what time

when becoming eligible for medicare

How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company?

with a usual, customary, and reasonable fee