Health Simulation

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called... mq

Overinsurance

Under the Health Care False Claims Act, any person who makes false claims or conceals material information regarding a claim will be deemed guilty of... mq

Class C Felony

The provision that provides for the sharing of expenses between the insured and the insurance company is... mq

Coinsurance

Which of the following refers to "own occupation" disability?

Insured is unable to perform duties of the occupation for which he/she was educated and trained.

Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act?

Iron

What is the major difference between a stock company and a mutual company?

Ownership

In a group policy, who is issued a certificate of insurance?

The individual insured

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Which is true regarding HMO coverage?

Divided into geographic territories

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? mq

18 months

A tornado that destroys property would be an example of which of the following? mq

A peril

When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should

Adjust the benefit in accordance w/ the decreased risk

A copy of a replacement notice is provided to the applicant, and an additional copy signed by the applicant is retained by the insurer. A direct response insurer must deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of accident and sickness coverage. The form must be filed with the Commissioner prior to use in this state. The replacement notice in essence must state the following:

All of the above are required in a replacement notice

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of

Concealment

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Defamation

The period of time immediately following a disability during which benefits are not payable is

Elimination period

The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the... mq

Entire contract

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

All of the following are differences between individual and group health insurance EXCEPT... mq

Individual insurance does not require medical examinations, while group insurance does require medical examinations. (in individual coverage, policies are issued based upon ind. underwriting. Group plans everyone is covered for the same and no ind underwriting selection)

In a group health policy, a probationary period is intended for people who

Join the group after the effective date

An insured's health claim internal appeal was denied. The insurer must do all of the following EXCEPT

Offer a payment plan

All of the following are examples of risk retention EXCEPT

Premiums

Which of the following is an example of a peril covered in an accident and health insurance policy?

Sickness

An insurer is on the verge of bankruptcy and can no longer pay the claims to its insureds. Which of the following will make sure that the insureds receive their money?

The Life and Disability Insurance Guaranty Association

If a policy is rated-up, which of the following is true? mq

The premium increases

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

A health insurance policy may cover all of the following risks EXCEPT

War-related injuries

An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?

$5,000

Every order by the Commissioner suspending any insurance license must specify the period during which the suspension will be effective and may not last longer than

12 months

Paula applied for a Medicare Supplement policy 1 month before her 65th birthday. The policy was issued on her birthday, January 31. Her agent mailed the policy by certified mail, and Paula received the policy on February 5. How long does Paula have to examine the policy and decide whether or not to keep it? mq

30 days from the date it was received.

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? mq

30 months. (Omnibus Budget Reconciliation Act of 1990 requires employer health plan to provide primary coverage for 30 months for individuals w/ end-stage renal disease before Medicare becomes primary)

Which of the following is a specific dollar amount or a percentage of the cost of care that must be paid by an HMO member? mq

Copayment

Under which of the following disability income plans would the benefits be subject to income tax? mq

Group (benefit payments that are attributed to employee contributions are not taxable, but benefit payments that are attributed to the employer contributions are taxable)

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?

Health Maintenance Organization plan (HMOs)

What is NOT a benefit of a POS plan?

It allows guaranteed acceptance of all applicants.

Which of the following is correct about a group health insurance policy? mq

It cannot exclude newborn children from coverage! From moment of birth

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled?

Key Person Disability

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

n group insurance, what is the policy called?

Master policy

Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter?

Medical history

According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?

Platinum

In the event of a loss, business overhead insurance will pay for...

Rent

How do employer contributions to a Health Savings Account affect the insured's taxes?

The employer contributions are not included in the individual insured's taxable income

Which of the following is true regarding elimination periods and the cost of coverage? mq

The longer the elimination period, the lower the cost of coverage. (Period of days which must expire after the onset of an illness or occurrence of an accident before benefits will be payable)

Which of the following is true regarding METs?

They allow several small employers purchase less expensive insurance together

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?

2 years

A health carrier that provides coverage for maternity services must provide the same coverage for newborns as for the mother for at least

3 weeks

Medicaid provides all of the following benefits EXCEPT

Income assistance for work-related injury

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in... mq

Medicare Part A. (or A and B) for prescriptions.

If an insurer advertises material that exaggerates the dividends that a policy pays, what kind of illegal act is it committing?

Misrepresntation

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?

Only written statements can be considered fraud

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

Present earnings and earnings prior to disability

Issuers of disability insurance policies that provide hospital or medical expense coverage on an expense-incurred or indemnity basis to persons eligible for Medicare must do which of the following? mq

Provide to all applicants the pamphlet "Guide to Health Insurance for People with Medicare"

Which is NOT true regarding an insured who is considered to be a standard risk?

The insured may have to pay slightly higher premiums

Which of the following statements regarding conditional receipts is true?

They are temporary insuring agreements

Which of the following is true regarding benefits paid to disabled employees? mq

They may be subject to taxation if the premium was paid by the employer. (Any portion of the benefit paid for and deducted by the employer will be considered taxable income to the employee)

For the purpose of insurance, risk is defined as...

The uncertainty or chance of loss

A producer did not do his research and placed insurance coverage through an unauthorized insurer. When this becomes known, what may the Commissioner do? mq

Order a policy replacement

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Payment of Claims

Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed

Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to... mq

Prevent overutilization and malingering. (Insurer wants the insured to have a financial incentive to return to work)

In respect to the consideration clause, which of the following is consideration on the part of the insurer? mq

Promising to pay in accordance with contract terms

The term "producer" refers to any person appointed by an insurer to

Solicit applications for insurance on its behalf

Regarding health insurance premiums, all of the following statements are true EXCEPT

Substandard risks are not insurable and are always rejected

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

Which of the following is NOT covered under Plan A in Medigap insurance? mq

The Medicare Part A deductible

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

Claim is denied if his policy contains the Illegal Occupation provision

Which of the following losses will be covered by a group medical expense policy?

A pre-existing condition

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply? mq

Case management provision

The document that indicates that an insurer has been approved and is authorized to transact insurance in a particular state is known as

Certificate of Authority

A producer who fails to segregate premium monies from his own personal funds is guilty of... mq

Commingling

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

10 days

Once a producer's appointment is filed, within how many days will the Commissioner verify the appointment (for eligible producers)? mq

15 days. (Commish will verify apt by electronic message w/in _ days of notice from insurer. However if producer deemed ineligible, Commish will notify w/in 10 days)

B receives her Medicare Supplement policy but decides she doesn't want to keep it. How many days does B have to return her policy for a full refund? mq

30 days (all Medicare supplement policies must provide a free 30-day free-look provision)

What is the elimination period for Social Security disability benefits? mq

5 months

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?

6 credits

While a claim is pending, an insurance company may require

An independent examination as often as reasonably required

Application forms for Medicare supplement policies are required to include questions designed to elicit information as to whether as of the date of the application, the applicant has... mq

Another Medicare supplement insurance or other disability policy in force and whether the proposed policy is intended to replace any existing policies.

Which of the following hospice expenses would NOT be covered in a cost-containment setting?

Antibiotics

Which of the following types of agent authority is also called "perceived authority"? mq

Apparent

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

Being age 65

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? mq

Fraud

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

Held or transmitted in any form

The purpose of the Life and Disability Insurance Guaranty Association is to

Help protect policyowners and beneficiaries against financial loss caused by the insolvency of an insurance company

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? mq

Illegal under any circumstances

Any person who transacts insurance without a license is punishable with a Class B felony. If the Commissioner has reason to believe that any person has violated this rule, the Commissioner may do any of the following EXCEPT

Impose a prison sentence of no more than 6 months

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

Twisting

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? mq

Twisting

For how many days of skilled nursing facility care will Medicare pay benefits? mq

100 days (First 20 days in skilled facility covered in full. From then on, patient must pay daily copayment. No Medicare benefits provided for treatment in a skilled facility beyond _ days)

One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of... mq

50 or more

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

Adjust the claim benefit to reflect the insured's true age

A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?

Both group health and Medicare

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the... mq

Consideration clause (specifies that both parties to the contract must give some valuable consideration. Payment of prem is consideration given by applicant, since she has not paid, she is not covered by insurance)

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Which of the following acts is NOT considered to constitute an act of transacting insurance?

Filing forms with the Department

Health coverage becomes effective when the... mq

First premium has been paid and the application has been approved

Which of the following is NOT true regarding a flexible spending account? mq

It does not have limits on contributions. (form of cafeteria plan benefit funded by salary reduction. Employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes. Subject to annual maximum and "use-or-lose" rule

Which benefits would a disability plan most likely pay? mq

Income lost by insured's inability to work. (Due to accident or illness, designed to help them recover income lost from disability. Amount they receive is determined by insured's earned income and is usually limited to a certain % of that amount)

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education