rmi ch 12 test 3

28) 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)

B) staff model.

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

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

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

B) to provide mandated state benefits.

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

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

27) 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?

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

10) Which of the following statements about group universal life insurance is true?

A) The interest rate credited to a policy varies over time, but is subject to a minimum guarantee.

16) 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

A) calendar-year deductible.

35) Advantages of cafeteria plans include all of the following EXCEPT

A) simplicity of benefit administration.

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

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

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

B) Coverage is provided for both occupational and nonoccupational disabilities.

39) Turner Company self-insures its group life and group health insurance plans. 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)

B) administrative services only contract.

41) 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)

B) cafeteria plan.

14) 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

B) coinsurance.

26) 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

B) consumer-directed health plans.

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

B) network model HMO.

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

B) no cost-sharing for certain preventative services

54) Under many cafeteria plans, employees make premium contributions with pre-tax dollars. Then they use money from the salary reduction to purchase group health insurance or dental insurance. This type of cafeteria plan is called a

B) premium conversion plan.

47) Many group insurers contact employers and arrange for their individual insurance producers to meet with interested employees at the workplace to conduct sales interviews. This distribution method is called a

B) worksite marketing program.

23) All of the following statements about HMOs are true EXCEPT

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

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

C) Many employers provide a reduced amount of coverage on retired employees.

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

C) Most plans provide benefits for total disabilities only.

1) Which of the following statements about group insurance is true?

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

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

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

45) 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

C) capitation fee.

52) 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)

C) health reimbursement arrangement (HRA).

40) 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)

C) individual practice association plan.

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

C) low coverage limits.

46) One type of managed care plan has a network of preferred providers. When care is needed, the member has the option to seek care in the network or to go outside the network. If care is received outside the network, the member must pay substantially higher deductibles and coinsurance. This type of managed care plan is a(n)

C) point-of-service plan.

37) Tracy had continuous group health insurance coverage at her previous employer for 6 years. Tracy decided to change jobs. Under federal law, if Tracy changes jobs, the new employer or group health plan must give her credit for previous and continuous health insurance coverage. This characteristic is called

C) portability.

25) 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

C) stop-loss insurance.

38) 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?

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

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

D) The employer should ideally share in the cost of a group insurance plan.

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

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

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

D) eligibility period.

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

D) gatekeeper.

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

D) great emphasis on cost containment

48) 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

D) indemnity plans.

51) One provision of the Affordable Care Act is the creation in each state of a new and transparent marketplace where individuals and small employers can purchase affordable, qualified, health insurance plans. This marketplace is called a(n)

D) insurance exchange.

42) 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

D) noncontributory.

22) A managed care plan under which members can receive medical care from non-network providers at higher out-of-pocket costs is an example of a(n)

D) point-of-service plan.

43) Doris started a business 2 years ago. The business has been successful, and Doris is thinking about starting to offer 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

D) satisfy a 2-year probationary period.