Excel Solutions Chapter 3 Exam- Health and Accident

What does the Consolidated Omnibus Reconciliation Act (COBRA) of 1985 allow an employee to do? In the event of employment termination, group health insurance can be kept if the employee pays the premiums Receive a tax credit to help offset the cost of health insurance Remain on their current coverage for 30 months In the event of employment termination, group health insurance can be kept if the employer pays the premiums

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

Health insurance will typically cover which of the following perils? Death due to illness Injury due to accident Death due to accident Dismemberment

Injury due to accident

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA? It would be considered taxable income to the employee The employee would not be allowed to an HSA The employer would pay payroll tax and FICA on the contribution amount The employer would not be allowed to deduct the contribution from the employee's pay

It would be considered taxable income to the employee (Contributions to an HSA may be made-pre-tax under a Section 125 Cafeteria Plan. Without the Section 125 Plan in place, it would be considered taxable income to the employee)

The election of COBRA for continuation of health coverage will? Increase the coverage and lower the premium Maintain the same coverage and increase premium Increase out-of-pocket costs and lower premium Decrease out-of-pocket costs and maintain same premium

Maintain the same coverage and increase premium (COBRA results in the same coverage with increased premiums up to 102% of prior premium)

What is the contract called that is issued to an employer for a Group Medical Insurance plan? Master policy Certificate of coverage Provisional policy Document of coverage

Master policy

Group health plans may deny participation based upon the? Member's claims history Member's current age Member's pre-existing condition Member's part-time employment status

Member's part-time employment status

According to HIPPA, when can a group health policy renewal be denied? There have been to any claims in the past year The size of the group increased by more than 10% Participation or contribution rules have been violated Participation or contribution rules have been changed

Participation or contribution rules have been violated

When are group disability benefits considered to be tax-free to the insured? When the recipient pays the premiums When the employer pays the premiums When both the employer and recipient pay the premiums When benefits paid are equal to or lower then the recipient's salary

When the recipient pays the premiums

Under group health insurance, a certificate of coverage is issued to the? Employer Employee Producer Sponsor

Employee

How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50

20

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance. 45 63 75 90

63 days (Under HIPPA a group health plan may not impose a pre-existing condition exclusion if the person has had a creditable medical coverage for at least 12 months as long as the person had no more than 63 days with no coverage)

HIPPA considers which of the following as "individually identifiable health information"? A persons employment history A persons net income A persons hire date A persons health claim information

A persons health claim information

Which of the following is INELIGIBLE to participate in a Section 125 plan? Key Employee in a C-Corp Highly Compensated Employee in an S-Corp A C-Corp Owner with a greater than 2% share An S-Corp Owner with a greater than 2% share

An S-Corp Owner with a greater than 2% share (Owners of a C-Corp are eligible, but must hold up to the non-discrimination rules)

Under COBRA, a terminated employee's benefit's must? Be less extensive and premium cannot exceed 102% Be the same and the premium cannot exceed 102% Be more extensive and the premium cannot exceed 102% Be the same as well as the premium

Be the same and the premium cannot exceed 102%

Which of the following would be considered a possible applicant and contract policyholder for group health benefits? Human resource department Employer Insured Employee Insurance Company

Employer

Key Person Disability Insurance pays benefits to the? Hospital Employee Employer Employee's creditors

Employer (Protects company financially when a key employee can no longer work due to disability. Benefits are received tax-free to the employer