Health Insurance Exam Review

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?

The maximum amount considered eligible for reimbursement by an insurance company under a health plan

When does a Probationary Period provision become effective in a health insurance contract?

At the policy's inception

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T

The difference between group insurance and blanket health policies is:

Blanket health policies do not issue certificates

a collection of health care providers such as physicians, hospitals, and clinics who offer their services to certain groups at prearranged discount prices.

PPO (preferred provider organization)

At what point during a transaction does a nonresident agent need a licensed resident agent to countersign any documents, policies, applications, or other insurance forms?

at no point

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

protect the producer

Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?

Prospective review

At what point would the Life and Health Insurance Guaranty Association becomes involved in an insurance company's affairs?

When the insurer becomes insolvent

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT: •When consent for the autopsy is not obtained • When the state prohibits this by law • When foul play was a contributing factor • When the cause of death is unknown

When the state prohibits this by law.

Medicaid was designed to assist individuals who are:

below a specific income limit

How does the Commissioner of Insurance attain office?

elected by the people of NC to a 4 year term

Employers are entitled to take a tax deduction for premium contributions they make under social security disability benefits; however...

employee taxes are paid with after-tax dollars for Social Security

The reason for a business having a Business Overhead Expense Disability Plan is to cover:

fixed business expenses

offers a variety of medical services subscribers

group model

Which of the following MUST be included with the continuation of coverage of a group Hospital, Surgical, and Major Medical policy?

hospital expenses

An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits:

immediately

Which of these circumstances REQUIRE an insurer to clearly specify questions designed to obtain information solely for marketing research?

in any insurance transaction

Basic Hospital and Surgical policy benefits are:

lower than the actual expenses incurred

Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?

major medical

K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K

not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law

The Commissioner of Insurance has notified an insurer that an Individual Health Policy form does not comply with North Carolina laws. The insurer may

not issue the form in connection with any new application

The Notice of Claims provision requires a policyowner to:

notify an insurer of a claim within a specified time

An example of unfair discrimination would be

offering different terms of coverage for different policyowners having the same risk classification

Deductibles are used in health policies to lower:

overuse of medical services

The law doesn't prohibit a lender from refusing to accept a binder as evidence of insurance, as long as the refusal is:

reasonable.

What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?

receiving care, terminal illness, confined to a facility

A Health Insurance Policy applicant unintentionally fails to list a previous visit to a neurologist. If the policy is issued and the insurer later decides to contest the policy, it must do so

within 2 years from the date of issue

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?

$1,250 3.5 months - 1 month elimination period = 2.5 months. 2.5 months X $500 monthly indemnity = $1,250.

Chemical dependency treatment under a Group Health policy MUST include (over the life of the contract) a minimum benefit of

$16,000

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

$2,100

C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

$720

physicians work out of their own facilities and participate in the HMO on a part time basis

(IPA) also known as open panel

A temporary license may be issued for a MAXIMUM period of how many days?

180

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

20

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration clause

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

Her group health plan

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a:

High Deductible Health Plan

most effective for large employers that face the risk of significant losses.

Stop-loss policies

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

The circulation of written literature that is maliciously critical of an insurer's financial condition is called

defamation

medical care is rendered by physicians and hospitals who participate in the HMO (employed by the HMO)

staff model

During the Grace Period, the benefits of an individual health policy will remain in force if

the premium is paid

Essential Benefits without annual and lifetime limits are required on any health policy purchased

through the Federal Marketplace

An agent inducing an insured to lapse, forfeit, or surrender insurance through misrepresentation is committing the illegal act of

twisting

What is the primary factor that determines the benefits paid under a disability income policy?

wages

Medical treatment in Tax-supported institutions cover the cost of:

•Cerebral Palsy • Alcoholism and drugs • Respiratory illness

Industrial health insurance is a form of health insurance that:

•Have a minimum grace period of 4 weeks for additional death benefit premium •Have a maximum of 2 years incontestability provision of the death benefit • Have a noncancellable death benefit unless due to nonpayment of premium

Which of the following claims are typically excluded from Medical expense policies?

Intentionally self-inflicted injuries

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

If a life insurance company becomes insolvent, the fund that guarantees policyowners payment of death benefits is known as the

Life and Health Insurance Guaranty Association

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury

is primarily funded by social security payroll taxes

Medicare Part A

is primarily funded by general tax revenue and premiums

Medicare Part B

What does Medicare Parts A and B cover?

Part A covers hospitalization; Part B covers doctor's services

Which of these do NOT constitute policy delivery?

Policy issued with a rating

How does group insurance differ from individual insurance?

Premiums are lower

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

Premiums are waived after the insured has been totally disabled for a specified time period

K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to P's estate

Under the Affordable Care Act (ACA), health coverage is provided for dependents up to the age of

26

An insurer must maintain grievance records for

3 years

A terminated employee must have been covered for at LEAST _ months) under a Group Health Insurance policy immediately prior to termination in order to be eligible for continuation of coverage.

3. Continuation of group health coverage is only available to those employees who were covered under a group plan for a minimum period of 3 months prior to the date of termination.

How long is the free look period for medicare and long term care policies?

30 days

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36

North Carolina insurance law specifically allows the Commissioner to issue a temporary license to which of the following individuals?

A surviving spouse of a deceased agent

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:

After an insured has become totally disabled as defined in the policy

Before a health insurance policy is issued, which of these components of the contract is required?

Applicant's signature on application

An incomplete health insurance application submitted to an insurer will result in which of these actions?

Application will be returned to the writing producer

The Life and Health Insurance Guaranty Association is funded by authorized insurers in this State. One of the roles of this organization is to

Assist in the prevention of insurer insolvencies

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:

Business Overhead Expense

-Employees pay 102% of the premium; -Extends group health coverage to terminated employees and their dependents after a qualifying event. -Required for employer with 20 or more employees.

COBRA

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as:

Coinsurance

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?

Commercial insurer

XYZ insurance Company would like to begin conducting business in North Carolina. Before XYZ can issue or deliver a Health policy, the form, classification of risks, and premium rates MUST be filed with the

Commissioner of Insurance

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Disability Income

Which of the following does Social Security NOT provide benefits for?

Dismemberment. Social Security provides for all of these types of benefits EXCEPT dismemberment. (Survivorship, Disability, Retirement)

Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)?

Employee funds the HRA entirely

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

Reinstatement

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?

Residual Benefit clause

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual disability

Which of these terms accurately defines an underwriter's assessment of information on a health insurance application?

Risk classification

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was declined

Which of the following statements BEST describes dental care indemnity coverage?

Services are reimbursed after insurer receives the invoice

P is a producer who notices 5 questions on a health application were not answered. What actions should P take?

Set up a meeting with the applicant to answer the remaining questions

The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

Social Security Disability Income

benefits are income tax free unless beneficiary or joint filer income is greater than 25-32k

Social Security benefits

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

They are nonprofit organizations

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses

what is the payment of premium(predetermined price) in an HMO plan commonly referred to as?

capitation

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

All of the following statements about health coverage for newborns are correct EXCEPT

coverage during the first year is limited to congenital defects