Life and Health Chapter 13

Which statement is incorrect regarding COBRA? a. The employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage b. The employer may require the former employee or beneficiary to pay an amount equal to 102% of the premium c. Coverage continues for 29 months for individuals receiving Social Security disability d. Evidence of insurability is not required to continue coverage under COBRA

a. The employee or beneficiary must respond to the notification of his/her right to continue coverage within 90 days, if he/she wants to continue the coverage

A firm with 50 employees replaces its existing group health plan. With regard to ongoing existing claims, the replacing insurer will be: a. Required to keep paying them under the Dual Choice Provision b. Required to continue paying them under the No Loss-No Gain law c. Required to stop paying them under COBRA d. Allowed to deny claims over 60 days old under ERISA

b. Required to continue paying them under the No Loss-No Gain law

HIPAA laws apply to groups of _____ or more. a. 2 b. 100 c. 5 d. 20

a. 2

COBRA applies to employers with ______ or more employees. a. 20 b. 15 c. 30 d. 10

a. 20

The employee or the beneficiary must notify the employer within ______ days if they elect to continue coverage under COBRA. a. 60 b. 45 c. 30 d. 90

a. 60

Which of the following is incorrect regarding the group underwriting process? a. Adverse selection is not a concern for group contracts b. The insurer's office location is not a cost factor c. Evidence of insurability is not required since premiums are adjusted annually by evaluating the group and the claims experience d. New employees usually become eligible to enroll after a waiting period

a. Adverse selection is not a concern for group contracts

Which statement would be considered inaccurate regarding the underwriting of a group plan? a. Contributory plans require 100% employee participation b. The cost of a group policy is determined by the type, size, and average age of the group and claims experience with previous insurers c. The corporate home office of the group normally is the group's address d. The insurer can require a minimum percentage of the group to be enrolled to guard against adverse selection

a. Contributory plans require 100% employee participation

When Harold became no longer eligible for coverage under his employer's group benefit program, which of the following statements accurately reflects the conversion privilege defined by his group contract? a. Harold had 31 days to convert his policy to an individual plan b. Harold was covered for an additional 30 days under the conversion provision c. Harold had 31 days in order to request COBRA coverage d. Harold was covered by his group plan until he found individual coverage

a. Harold had 31 days to convert his policy to an individual plan

A small employer health benefit plan may be nonrenewed for all of the following reasons, except: a. High number of claims b. Nonpayment of required premiums c. Fraud or misrepresentation on the application d. Insufficient number of individuals under the plan to meet participation requirements

a. High number of claims

When underwriting group life, the underwriter treats the group as if it were: a. One individual b. Two groups, with all the males in one group and all the females in the other c. A number of separate individuals d. A substandard risk

a. One individual

Which of the following might be done to protect against adverse selection when underwriting group medical insurance? a. Require a minimum percentage of the group to enroll b. Include all dependents to make the group larger c. Enroll the business owner first d. Allow coverage to begin immediately

a. Require a minimum percentage of the group to enroll

If a child is covered under more than one group health insurance plan how is it determined which carrier is primary? a. The younger parent's plan will become primary b. The plan covering the parent whose birthday occurs first in the calendar year will be the children's primary coverage c. The date of birth of the child that is closest to either parent becomes primary d. The parent whose date of birth is closest to the end of the year determines which is primary

b. The plan covering the parent whose birthday occurs first in the calendar year will be the children's primary coverage

HIPAA defines a pre-existing condition as one for which the insured received medical advice, diagnosis, care, or treatment within the past _____ months. a. 18 b. 12 c. 6 d. 3

c. 6

Until yesterday, J. J. worked for his father's company and was covered by the company's large group health plan. He stopped working to go to college. He is 26 years of age and wants to keep the same coverage until he earns his degree in approximately 24 months. Which of the following statements is true? a. As a student, J.J. is still covered under his father's group plan b. J.J. can obtain coverage under COBRA, but it won't be the same coverage he had under his father's group plan c. A good option for J.J. is to exercise the COBRA option under his father's group plan d. J.J.'s only option is to buy a personal plan of coverage

c. A good option for J.J. is to exercise the COBRA option under his father's group plan

All of the following are ways in which an employee will lose their employer sponsored group health insurance, except: a. Group contract is terminated b. No longer meeting eligibility requirements c. Becoming too old while still on the job d. Employment is terminated

c. Becoming too old while still on the job

Which of the following types of policies would a sports team purchase to obtain coverage for a season? a. Limited Accident b. Limited Sickness c. Blanket d. AD&D

c. Blanket

Which of the following is not used to reduce adverse selection? a. Limiting coverage only to those employees who work a minimum number of hours weekly b. Requiring that the group be formed for a purpose other than obtaining insurance c. Establishing a maximum number of participants that can be covered under the plan d. Requiring 75% employee participation for contributory employer group health plans

c. Establishing a maximum number of participants that can be covered under the plan

All of the following are accurate statements, except: a. In group insurance, the contract is between the employer and the insurer b. In group insurance, the employer receives a Master Policy and each employee receives a Certificate of Insurance c. Group insurance normally covers occupational injury or disease d. The group must be a natural group

c. Group insurance normally covers occupational injury or disease

A replacing insurer must assume liability for paying ongoing existing claims under which law? a. ERISA b. HIPAA c. No-Loss, No-Gain d. COBRA

c. No-Loss, No-Gain

Which of the following is correct pertaining to underwriting a group health policy? a. All participants are always eligible immediately b. Group insurance cannot be based upon community experience c. Premiums are generally re-evaluated annually and may be based upon prior claims d. The average age of the group is not taken into consideration

c. Premiums are generally re-evaluated annually and may be based upon prior claims

An employer may require a former employee who has COBRA coverage to pay up to _____% of the premium. a. 90 b. 105 c. 95 d. 102

d. 102

Small employer plan preexisting conditions may not be excluded for any longer than _____ months. a. 36 b. 29 c. 18 d. 12

d. 12

COBRA is a federal law requiring employers with _____ or more employees to provide the option of continuing the employee's existing health coverage for dependents for up to _____ months following qualifying events. a. 20, 18 b. 25, 45 c. 15, 36 d. 20, 36

d. 20, 36

For an employee to be eligible to participate in an employer's group health insurance plan, he/she must be considered full-time and work a minimum of _____ hours as established by the Affordable Care Act. a. 35 b. 40 c. 50 d. 30

d. 30

The federal law that governs employer-sponsored employee retirement and welfare and benefit plans is: a. ADEA b. COBRA c. HIPAA d. ERISA

d. ERISA

When an insurer relies on the prior claims history of the group to be insured in determining the rate to be charged, it is called: a. Cost rating b. Claims rating c. Community rating d. Experience rating

d. Experience rating

All of the following are correct regarding regulatory jurisdiction over group insurance, except: a. The policy only needs to provide benefits as required by the state in which the insurer is incorporated b. Unless the state of delivery has a significant relationship to the insurance transaction, other states may seek to exercise their regulatory authority c. The state in which the group contract is delivered generally has governing jurisdiction d. The contract must conform to the laws of the state where the Master Policy is delivered even though certificates of insurance may be delivered in other states

a. The policy only needs to provide benefits as required by the state in which the insurer is incorporated

When a group is covered by a MET, who is issued the Master Policy? a. The trust b. A representative for the insureds c. The insurer d. The sponsor

a. The trust

Which is true regarding the advertising of Accident and Sickness Insurance? a. When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group b. When an agent misleads the public in an advertisement, only the agent is accountable c. Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive' d. Sales talks and personal testimonials are not considered advertising

a. When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group

Payment of the first premium and an application must be submitted to an insurer for individual coverage within how many days to convert group coverage to an individual policy not requiring proof of insurability? a. 7 days b. 31 days c. 10 days d. 45 days

b. 31 days

A carrier replacing employer group coverage is not required to cover all employees and dependents covered by, or eligible for, coverage under the previous policy if the replacement takes place more than _____ days after of the previous policy's termination. a. 10 b. 60 c. 30 d. 90

b. 60

All of the following are ways in which an employee will lose their employer sponsored group health insurance, except: a. Group contract is terminated b. Becoming too old while still on the job c. No longer meeting eligibility requirements d. Employment is terminated

b. Becoming too old while still on the job

When group health insurance is being replaced, ongoing claims under the former policy must continue under the new policy, overriding any preexisting condition exclusion. This is a requirement under which of the following? a. The Level of Benefits Provision b. No Loss - No Gain Statutes c. The Preexisting Conditions Provision d. Replacement Regulations for Group Policies

b. No Loss - No Gain Statutes

Which event does not cause termination of continuing coverage by COBRA? a. The employee becomes covered by another group health plan b. Premium payments are made in a timely manner c. The employee becomes eligible for Medicare benefits d. The employer ceases to maintain any group health plan

b. Premium payments are made in a timely manner

All of the following are true of the Coordination of Benefits Provision under a group plan, except: a. In a spousal situation, the insurer for the claim of an employee is primary, with the spouse's plan being secondary b. It is a method of determining primary and secondary coverage when an insured is covered by more than one group policy c. Secondary carriers will only pay claims that are in excess of the primary carrier's responsibility d. In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary

d. In the event children are covered under two group plans, the insurer for the parent who is the oldest is primary, and the other parent's plan is secondary

Regarding COBRA, which of the following is not true? a. It provides continuation of coverage for 36 months for an individual losing dependent status b. It provides continuation of coverage for 29 months for workers on Social Security Disability c. It provides continuation of coverage for 36 months for a surviving spouse d. It covers participants who have resigned for 36 months following the date of their resignation

d. It covers participants who have resigned for 36 months following the date of their resignation

When employers who self-fund their employee benefits form a larger group in order to offer health insurance benefits to each employer's workers, it is called a (an): a. Insurance Alliance b. Premium Discount Plan c. Trade Association d. Multiple Employer Welfare Association (MEWA)

d. Multiple Employer Welfare Association (MEWA)

Group health plans usually cover: a. Both occupational and nonoccupational injury or disease b. Neither occupational nor nonoccupational injury disease c. Occupational injury or disease d. Nonoccupational injury or disease

d. Nonoccupational injury or disease

All of the following are a prohibited form of advertising, except: a. An advertisement that uses the words 'only', 'just', 'merely', 'minimum', or similar words to imply a minimal imposition of restrictions and reductions b. Advertisements for Medicare Supplements containing information that create undo anxiety in the minds of the insureds c. When an insurer excludes coverage for preexisting conditions, an advertisement of the policy that implies that the applicant's medical condition or history will not affect eligibility or payment d. Stating that 'We have been in business for over 50 years, for more information contact a local agent.'

d. Stating that 'We have been in business for over 50 years, for more information contact a local agent.'

Which is not a qualifying event for the continuation of dependent coverage under the Consolidated Omnibus Budget Reconciliation Act? a. Death of the employee b. The employee's eligibility for Medicare benefits c. Divorce or legal separation d. Termination of the employee for theft

d. Termination of the employee for theft