PA Accident and Health Insurance Chapter tests
a policyholder has a major medical plan with a 80/20 coinsurance and a deductible of 75$. if the insured has previously met her deductible and receives a bill for $175, how much with the insurer pay
$140 (insured met her deductible, eligible amount for claim is entire $175, 80 of 175 is 140)
An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for?
$200 (20%)
An insured has a stop-loss limit of $500 and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much with the insured hav
$5,000 (they Pau the stop-loss limit
if an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered a taxable income of a $1,000 monthly disability benefit
$500
Kim has health insurance with a deductible of 500 and an 80/20 coinsurance. how much will she pay if she incurs a loss of $1,500
$700 (she pays the deductible plus 20% coinsurance)
sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
100% of costs
In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at
60% of the benefit
at what age will a personal normally enroll with an insurance carrier under a Part C medicare advantage plan
65
which of the following does coordination of benefits allow
Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
what is implied authority defined as
Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
Business overhead expense policy
An example of risk sharing would be
Doctors pooling their money to cover malpractice exposures
What type of policy would only provide coverage for specific types of illness (cancer, stroke, etc)?
Dread disease insurance
Donna and Mary were racing bicycles in a store parking lot while being cheered on by fellow employees. Mary ran into John, another employee, who happened to be taking out the garbage. Both Mary and John are injured. Who would most likely be covered under Workers' Compensation?
John
Small employers who are sponsored by an insurer to provide group benefits to its employees are called
MEWA
A type of insurer that is owned by its policyowners is called
Mutual
When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?
No deductible payment is required
The elimination period under a hospital indemnity plan is
The specific number of days an insured must wait before becoming eligible to revise benefits for each hospitalization
Part A Hospital expense coverage provided under Medicare is automatically made available to each of the following EXCEPT
a 70 year old NOT eligible for social security
a fee for service health insurance plan will normally cover
a disease
Major medical insurance will typically cover medical expenses that result from
a negative reaction to a prescribed medication
A plan in which an employer pays insurance benefits from a fund derived from the employers current revenue is called
a self-funded plan
people with higher loss exposures have the tendency to purchase insurance more often than those at average risk. this is called
adverse selection
Medical expense insurance would cover
an injury occurring at the insured's residence
According to life insurance contract law, insurable interest exists
at the time of the application
the purpose of the coordination of benefits provision group in accident and health plans is to
avoid overpayment of claims
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must
be the same and the premium cannot exceed 102%
Why are dividends from a mutual insurer not subject to taxation?
because the dividends are considered to be a return of premium
An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. this list is called
benefit schedule
Maria is a preferred provider organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result
care is covered
all of the following are elements of an insurance policy EXCEPT
claim forms
Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)
concealment
what is the primary purpose of a rating service company such as A.M best?
determine financial strength of an insurance company
a pharmacy benefit covers prescription drugs derived from a life called a(n)
drug formulary
All of these are characteristics of a major medical expense policy EXCEPT
elimination periods
Under group health insurance, a certificate of coverage is issued to the
employee
Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the
employees waiting period for coverage of a preexisting condition can be reduced under the new employers health plan
which of the following would be considered a possible applicant and contract policyholder for group health benefits
employer
The limited period of time given to all members to sign up for a group health plan is called the
enrollment period
a professional liability for which producers can be sued for mistakes of putting a policy into effect is called
errors and omissions
the waiting period for a disability insurance policy
excludes payments for a short term illness or injury
When the principal gives the agent authority in writing, it's referred to as
express authority
which of these is NOT a qualifying event for Medicare
falling below the federal poverty level
a group disability income plan that pays tax free benefits to covered employees is considered
fully contributory
An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n)
group HMO
which of the following is considered to be an event of condition that increases the probability of an insureds loss
hazard
which of the following is NOT included under a health benefit plan?
hospital indemnity plan
the power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority
implied
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do
in the event of employment termination, group health insurance can be kept in the employee pays the premiums
Which of the following is NOT taken into consideration when determining eligibility for medicare benefits
income
A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment
indicates a preexisting condition
Health insurance will typically cover which of the following perils
injury due to accident
which of the following is present when an applicant stands to lose value if the insured dies
insurable interest
who is responsible for assembling the policy forms for insureds
insurance carriers
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
insurance sales calls
an accident and health policy that provides reimbursement benefits makes them payable to the
insured
which of the following statements regarding group disability income insurance is TRUE
it provides benefits for non occupational illnesses and injuries
a common exclusion with vision plans is
lasik surgery
the authority granted to a licensed producer is provided via the
law of agency
how do insurers predict the increase of individual risks
law of large numbers
insurance companies determine risk exposure by which of the following
law of large numbers and pooling
A dread disease policy is considered to be a type of
limited health insurance policy
low frequency diseases can be exclusively covered by what kind of health insurance
limited policies
An insurers ability to make unpredictable payouts to policy owners is called
liquidity
all of the following are examples of pure risk EXCEPT
losing money at a casino
what is the contract called that is issued to an employer for a group medical insurance plan
master policy
Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which day would Sonya have coverage
may 30
which of the following is medicare Part B also known as
medical insurance
Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?
medicare is the secondary payer
Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability?
own occupation
the cause of a loss is referred to as a(n)
peril
what is known as the immediate specific event causing loss and giving rise to risk
peril
Which of the following would evidence ownership in a participating health insure contract
policy ownership
a rehabilitation benefit is intended to
prepare the insured to return to employment
Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a
presumptive disability
According to the principal of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and its
promises made
what is considered to be the primary reason for buying life insurance?
provide death benefits
Who is the individual paid on a fee-for-service basis
provider
When comparing an HMO to a PPO, the PPO
provides a greater choice of providers
an indemnity plan
provides the insured a specific dollar amount for services
The role of the federal government was expanded when Medicaid was established by allowing the state to
receive matching funds to expand public assistance programs
ABC insurance company transfers part of their risk to XYZ insurance company. this situation is called
reinsurance
a life insurance company has transferred some of its risk to another insurer. the insurer assuming the risk is called the
reinsurer
what are applicants statements concerning occupations, hobbies, and personal health history regarded as
representation
an individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in
risk avoidance
health insurance involves two perils, accident and
sickness
Typically, Long-Term Disability benefits are coordinated with which benefit plan?
social security
An insurers claim settlement practices are regulated by the
state insurance departments
in an insurance contract, the applicants "consideration" is the
statements made in the application and the premium
A(n) _______ company Is owned by its shareholders
stock
Distributions from a Health Savings Account (HSA) for qualified medical expenses are
tax-free
Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?
taxes must be paid on 75% of the benefits received
When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur?
the insurer will pay a reduced amount
under a contract of adhesion
the terms must be accepted or rejected in full
legal purpose is a term used in contract law meaning
there must be legal reasons for entering into the contract
insurance represents the process of risk
transference
"Maximum benefits" refers to the
upper limit of the total lifetime benefits the insurance company will pay
funding for medicare Part B is partially provided by
users premiums
An individual can enroll in a Part C medicare advantage plan at what time
when becoming eligible for medicare
How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company?
with a usual, customary, and reasonable fee