Chapter 12 Quiz

Notice of claim is required within _____ days of loss.

20 Under the Notice of Claim Provision (a Mandatory Uniform Provision), the insured is required to notify the insurer, in writing, within 20 days of any loss.

If the insured is receiving regular disability income payments, the insurer can require notice of continuance of claim every ______ months.

6 If the insured is receiving regular disability income payments, the insurer can require notice of continuance of claim every 6 months.

The Legal Actions provision preserves the insured's right to bring suit against his/her own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action.

60 The insured must wait at least 60 days following the filing of a proof of loss before pursuing any legal action against the insurer.

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not:

Alter the minimum requirements of any provision The insurer must assure that any variation must be at least as favorable as the original wording, and no mandatory provision may be deleted if applicable to the coverage.

Which of the following is not a Mandatory Uniform Provision?

Conformity with State Statutes Conformity with State Statutes is an Optional Uniform Provision.

Right to Examine is the same as:

Free Look Period Right to Examine is another term for the Free Look Period. Owner's (or Insured's) Right of Rescission is one more term that means the same thing. A policy returned during the Free Look period is void, no claims are payable, and all premiums paid are refunded.

All of the following are Optional Uniform Provisions, except:

Legal Actions Legal Actions is a Mandatory Uniform Provision. All other responses are Optional Uniform Provisions.

Which statement is false?

Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered This describes Precertification, not Mandatory Second Surgical Opinion.

Failure to obtain ____________ in a managed care plan can result in denial of coverage, or a substantial reduction in the coverage normally provided.

Pre-authorization With a managed health care plan failure to obtain pre-authorization can result in denial of coverage, or a substantial reduction in the coverage normally provided.

Case managers do all of the following, except:

Providing the necessary care A case manager may be assigned to a case to determine the appropriate course of action for an insured. The case manager may require a referral or a second opinion before approving a procedure. The case manager will also manage the utilization review of a subscriber's stay in the hospital.

Which statement is inaccurate regarding the Change of Occupation Provision?

The insured must notify the insurer of a change of occupation, or the policy will be cancelled Failure to notify the insurer of a change of occupation will not result in cancellation of the policy.

When an insured is discharged from the military, what happens to health insurance coverage that was in place prior to being called up for active military service?

The insured will be permitted to resume coverage and premiums without any waiting periods Under the military suspension provision, individual plans may suspend coverage (and premium) during active military service. When the insured is no longer serving, these individuals will be permitted to resume coverage and premiums without any waiting periods.

Which statement concerning individual A&H policy renewal provisions is most correct from the perspective of the insured?

The more favorable the renewal provision to the insured, the higher the cost The more favorable a renewal provision is to the insured, the higher the premium will be. A Noncancellable policy will cost the most because its premium may not be changed in the future.

Proof of loss is required within _____ days of loss.

90 The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates that the insured must generally provide proof of the loss within 90 days of the loss, or within the shortest time possible, but not exceeding 1 year unless the insured suffers legal incapacity.

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions?

Consideration Clause The other choices are Case Management Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms.

Abigail has a preexisting condition noted in her new A & H policy. If she submits a claim for this condition within a specified time stated in the contract, what will the insurer do?

Deny the claim Since Abigail's claim occurred during the waiting period for preexisting conditions stated in her policy, the insurer would deny the claim.

When admission to a hospital's facilities is __________, the insurer may require pre-authorization approval under a managed care plan before claims will be paid.

Elective With a managed health care plan when admission to a hospital's facilities is 'elective', the insurer may require pre-authorization approval before claims will be paid.

If the insurer cancels an individual health plan, what happens to the unearned premium?

It is refunded on a pro rata basis According to the Cancellation Provision (an Optional Uniform Provision), if the insurer cancels a policy, unearned premiums are refunded on a pro rata basis.

Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim?

Only one policy will pay, the premiums for the other contracts will be returned Other Insurance With This Insurer (an Optional Uniform Provision) stipulates that if the insured has more than one policy of the same type with the same insurer, the insured may elect the policy to be used, and excess premiums for the excess coverage will be returned.

An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision?

Physical Exam & Autopsy According to the Physical Exam and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at its own expense, has the right to request a physical exam or autopsy where not prohibited by law.

Anna has a contract that includes the Non-Emergency Hospital Preauthorization Admissions Provision. For a scheduled hospital stay, she must first get preauthorization through her insurer. If she does not, the insurer may:

Reduce her normal benefits If Anna does not comply with this provision, she may have her normal benefit level reduced.

The Unpaid Premiums Optional Uniform Provision allows an insurer to:

Reduce the amount of a claim payment by the premium due An insurer can withhold unpaid premiums, to which it has a legal right, when paying a claim that has occurred during the grace period. Both the insurer and the insured are 'indemnified' in this manner.

Guaranteed Renewable means:

Renewable with adjustable premiums, by classification only The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by class only, not on an individual basis. A class of insureds is based on age or other uniform, nondiscriminatory method.

The Guaranteed Renewable Provision states that the policy is:

Renewable with premiums that may be increased for entire classes of insureds The Guaranteed Renewable Provision allows the insurer to adjust premiums upon renewal, but by classification only, not for particular individuals.

Under the Uniform Individual Accident and Sickness Policy Provisions, what happens when a health policy contains provisions that have gone out of compliance because of changes in state law?

The policy will be construed as if it conformed to the law According to the Conformity with State Statutes Provision (an Optional Uniform Provision), any provision on the policy effective date that is in conflict with state statutes is automatically amended to meet state requirements.

Which provision states that the insurance company must pay claims immediately?

Time of Payment of Claims Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.