Chapter 15-18

Kristen has an individual medical expense policy with a $1,000 calendar-year deductible, a $5,000 out-of-pocket limit, and a 20 percent coinsurance requirement. Kristen was hospitalized for a surgical procedure in March, her first health care treatment received during the year. The total bill was $20,000. Considering the deductible and coinsurance, how much of this amount must Kristen pay? Select one: A. $5,100 B. $4,800 C. $5,000 D. $4,400

$4,800

Dirk suffered a heart attack and was rushed to the hospital where heart surgery was performed. His total bill for medical services was $50,000. Dirk has a major medical policy with a $1,000 calendar-year deductible and a $5,000 out-of-pocket limit. His coinsurance percentage is 20 percent. The out-of-pocket limit applies to coinsurance only. Assuming this hospitalization was the first medical care that Dirk received during the year and that all of the hospital services were eligible for coverage under the policy, how much of the $50,000 bill will the insurer pay? A) $39,000 B) $39,200 C) $40,000 D) $44,000

$44,000

All of the following statements about optional disability income benefits are true EXCEPT Select one: A. Under a cost-of-living rider, benefits are periodically adjusted for inflation. B. Adding a return of premium rider results in a lower initial premium. C. A Social Security rider pays additional benefits if the insured is turned down for Social Security disability benefits. D. Under an option to purchase additional insurance, the insured has the right to buy additional insurance at specified times without evidence of insurability.

Adding a return of premium rider results in a lower initial premium.

One provision of the Affordable Care Act provides the creation in each state of a transparent and competitive insurance marketplace where individuals and small firms with fewer than 100 employees can purchase affordable and qualified health coverage. This marketplace is called a(n) Select one: A. Medicare plan. B. Medicaid plan. C. Affordable Health Insurance Exchange. D. Health Maintenance Organization (HMO).

Affordable Health Insurance Exchange.

Which of the following statements is (are) true regarding the calendar-year deductible used in most individual medical expense policies? I. Once the deductible is satisfied, no additional deductible is payable during the calendar year. II. A carryover provision helps to avoid paying two deductibles in a short period of time.

Both I and II

The effect of an annual out-of-pocket limit in an individual medical expense policy is to Select one: A. put a cap on annual benefits the insurer will pay. B. limit the lifetime benefits payable under the policy. C. prevent the insured from receiving duplicate benefits if medical expenses are also covered under workers compensation insurance. D. cover 100 percent of eligible medical expenses after an insured has incurred a specified amount of out-of-pocket expenses.

D. cover 100 percent of eligible medical expenses after an insured has incurred a specified amount of out-of-pocket expenses.

All of the following statements about the tax treatment of Health Savings Accounts (HSAs) are true EXCEPT Select one: A. Distributions from a qualified HSA used to fund medical expenses are taxable income. B. Distributions from a qualified HSA prior to age 65 for nonmedical purposes are subject to a 10 percent penalty tax. C. Contributions to a qualified HSA are tax deductible. D. Investment income in a qualified HSA accumulates income tax free.

Distributions from a qualified HSA used to fund medical expenses are taxable income.

All of the following statements about HMOs are true EXCEPT Select one: A. They organize and deliver health care services. B. HMO members pay nothing for medical care until care is provided, then they must pay high deductibles and large coinsurance payments. C. HMOs place a heavy emphasis on controlling the cost of covered services. D. The selection of physicians is usually limited to physicians affiliated with the HMO.

HMO members pay nothing for medical care until care is provided, then they must pay high deductibles and large coinsurance payments

Which of the following statements about Blue Cross Plans is (are) true? I. They typically provide service benefits rather than cash benefits to members. II. They usually provide very limited benefits for hospital charges. Select one: A. I only B. II only C. both I and II D. neither I nor II

I only

Which of the following statements about HMO managed care plans is (are) true? I. There is an emphasis on controlling costs. II. They usually have high deductibles. Select one: A. I only B. II only C. both I and II D. neither I nor II

I only

Which of the following statements regarding health care expenditures in the United States is (are) true? I. As a nation, the U.S. spends significantly more per-person on health care than most other industrialized nations. II. Health care expenditures in the U.S. are high because everyone is covered by a health insurance plan.

I only

Which of the following statements regarding recent developments in employer-sponsored health plans is (are) true? I. Preferred provider organizations (PPOs) continue to dominate group health insurance markets. II. The number of employers offering medical benefits to workers who retire early has increased. Select one: A. I only B. II only C. both I and II D. neither I nor II

I only

Which of the following is (are) characteristics of HMO managed care plans? I. Unlimited choice of physicians and hospitals II. Emphasis on controlling the cost of covered services Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements about cafeteria plans is (are) true? I. Unspent flexible spending account balances are refunded to the employee, tax-free, at year-end. II. Cafeteria plans enable employees to select benefits that meet their specific needs. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements about disability and disability income insurance is (are) true? I. Most disability income policies replace 100 percent of gross earnings. II. The probability of being disabled before age 65 is much higher than commonly believed. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements about eligibility requirements for qualified Health Savings Accounts (HSAs) is (are) true? I. Only individuals who are eligible for Medicare benefits can establish a qualified HSA. II. Applicants must be covered by a high deductible health plan and not be covered by any other comprehensive health plan to establish a qualified HSA.

II only

Which of the following statements about individual disability income policies that use a two-part definition of total disability is (are) true? I. During the initial period of disability, the insured must be unable to perform the duties of any gainful occupation. II. After the initial period of disability, the insured must be unable to perform the duties of any occupation for which he or she is reasonably fitted by education, training, and experience

II only

Which of the following statements about long-term care insurance is (are) true? I. Long-term care insurance is inexpensive, especially if purchased at older ages. II. Purchasers have a choice of daily benefits and benefit periods. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements about recent developments in group medical coverage is (are) true? I. After increasing for many years, the premiums for group medical expense coverage have finally started to decline. II. A growing number of employers are offering plans with higher deductibles for employees. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements is (are) true with regard to group life insurance? I. Most group life insurance is whole life coverage. II. Most group life insurance plans allow a modest amount of life insurance on the employee's spouse and dependent children. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Which of the following statements regarding group long-term disability income insurance plans is (are) true? I. These plans are usually limited to occupational disabilities. II. These plans typically use a more restrictive definition of disability after an initial period, such as two years. Select one: A. I only B. II only C. both I and II D. neither I nor II

II only

Maria is covered under a group medical expense plan as an employee. She is also covered under her husband's plan as a dependent. If Maria is hospitalized, how will each plan respond to her medical bills if both plans have the typical coordination-of-benefits provision? Select one: A. The primary plan is determined by which birthday, Maria's or her husband's, is earlier in the year. B. Her husband's plan is primary, and Maria's plan is excess. C. Maria's plan is primary, and her husband's plan is excess. D. Both plans will pay benefits on a pro rata basis

Maria's plan is primary, and her husband's plan is excess

A controversial provision of the Affordable Care Act is the expansion of a public assistance program designed to make health coverage available to low-income individuals. By increasing the maximum income level that can be earned and still qualify for benefits, millions of individuals will be eligible for coverage under this public assistance program. This public assistance program is called Select one: A. Affordable Health Exchange. B. Medicare. C. Health Maintenance Organization. D. Medicaid.

Medicaid.

All of the following statements about individual disability income policies are true EXCEPT Select one: A. Most disability income insurance policies contain an elimination period of 10 or fewer days. B. At the time of purchase, the insured can choose the length of the benefit period from among several available options. C. Premiums are often waived while a person is disabled but must be resumed if the insured recovers. D. In order to encourage rehabilitation, benefits may be continued during periods of vocational training.

Most disability income insurance policies contain an elimination period of 10 or fewer days.

Which of the following statements about individual disability income policies is true? Select one: A. Most policies pay a benefit equal to 100 percent of the disabled person's lost income. B. Benefits paid for partial disabilities are usually greater than benefits paid by the same policy for total disabilities. C. Newer policies often provide or make available a residual disability benefit for persons who are able to work but at a reduced income. D. Benefits are typically paid only for disabilities resulting from sickness.

Newer policies often provide or make available a residual disability benefit for persons who are able to work but at a reduced income.

Which of the following statements about health savings accounts (HSAs) is true? Select one: A. Once an individual has reached age 65 or is covered by Medicare, no additional contributions to the HSA may be made. B. The health insurance plan covering the HSA account beneficiary is not permitted to use a deductible. C. There are no limits to annual contributions that an individual may make to his or her HSA. D. HSAs offer no tax benefits for the account beneficiary.

Once an individual has reached age 65 or is covered by Medicare, no additional contributions to the HSA may be made.

All of the following statements about long-term care insurance are true EXCEPT Select one: A. Premiums can be reduced by electing shorter elimination periods. B. Protection against inflation is usually made available as an optional benefit. C. A common benefits trigger is the inability to perform a certain number of activities of daily living. D. Policies currently sold are guaranteed renewable.

Premiums can be reduced by electing shorter elimination periods.

Which of the following statements about provisions in individual health insurance policies is true? Select one: A. Insurers are not permitted to place time limits on filing claims or providing proof of loss. B. The usual length of the grace period is 180 days. C. After a policy is in force for 3 months, the time limit on certain defenses provision prohibits the insurance company from denying a claim based on a fraudulent misstatement in the application. D. Under the reinstatement provision, a health insurance policy that has lapsed can be put back in force.

Under the reinstatement provision, a health insurance policy that has lapsed can be put back in force.

Which of the following statements about the continuation of group health insurance under the COBRA law is true? Select one: A. The employer must pay the entire cost of coverage during the continuation period. B. The length of the continuation of coverage is 90 days. C. The option to continue coverage applies to minor children only, not to adults. D. A continuation of coverage must be made available even if an employee voluntarily terminates employment.

a continuation of coverage must be made available even if an employee voluntarily terminates employment

Turner Company self-insures its group life and group health insurance plans. Turner entered into an agreement with ABC Insurance through which ABC handles the plan design, claims processing, and record keeping for Turner. The agreement between Turner and ABC is called a(n) Select one: A. administrative services only contract. B. point-of-service contract. C. exclusive provider agreement. D. preferred provider agreement

administrative services only contract

Which of the following statements about the eligibility requirements for group insurance is true? Select one: A. An employee who signs-up for insurance during an eligibility period must furnish evidence of insurability. B. One purpose of a probationary period is to determine whether the employee is healthy enough to be covered under the group health insurance plan. C. Most plans cover both full-time and part-time employees. D. An employee must be actively at work on the day the employee's group insurance becomes effective.

an employee must be actively at work on the day the employee's group insurance becomes effective

After all of the provisions of the Affordable Care Act are implemented, which of the following statements will be true? I. Health insurers cannot use pre-existing conditions exclusions. II. Health insurers cannot impose annual benefit limits and lifetime benefit limits.

both I and II

Problems with the current health care system in the United States include which of the following? I. Rising health care expenditures II. Considerable waste and inefficiency in the health care system

both I and II

Reasons for having a minimum participation requirement before a group is eligible for insurance include which of the following? I. To lower the expense rate per unit of insurance II. To minimize the possibility of insuring a group which consists largely of unhealthy individuals Select one: A. I only B. II only C. both I and II D. neither I nor II

both I and II

Which of the following statements about group accidental death and dismemberment (AD&D) insurance is (are) true? I. The principal sum is paid if the employee dies in an accident. II. A percentage of the principal sum is paid for certain types of dismemberments. Select one: A. I only B. II only C. both I and II D. neither I nor II Clear my choice

both I and II

Which of the following statements about high deductible health insurance plans is (are) true? I. Coverage under a high deductible health plan is necessary to establish a qualified health savings account (HSA). II. High deductible health plans provide a maximum limit on annual out-of-pocket expenses.

both I and II

Which of the following statements about preferred provider organization (PPO) health plans is (are) true? I. A PPO plan contracts with health care providers to provide medical services to members at reduced fees. II. Plan members are given a financial incentive to use PPO providers rather than other providers. Select one: A. I only B. II only C. both I and II D. neither I nor II

both I and II

Which of the following statements is (are) true concerning benefit payments under long-term care insurance? I. Reimbursement policies pay for actual charges up to a specified daily limit. II. Per diem policies pay a specified daily benefit regardless of the charges incurred.

both I and II

Which of the following statements is (are) true concerning high deductible health plans? I. An employee can withdraw money tax-free from a health savings account or health reimbursement account to pay covered medical costs. II. There is a cap on an employee's out-of-pocket expenses under the plan. Select one: A. I only B. II only C. both I and II D. neither I nor II Clear my choice

both I and II

Nancy's employer provides an interesting employee benefit plan. Each employee is given 250 employee benefit credits to spend. A wide array of benefits areis available, and the employee uses benefit credits to select the benefits that he or she wants. This type of employee benefit plan is called a(n) Select one: A. cafeteria plan. B. contributory plan. C. defined benefit plan. D. employee selection plan.

cafeteria plan

A deductible under which expenses are accumulated on an annual basis, and once a specified total is reached, the deductible is satisfied for the year is called a Select one: A. prospective deductible. B. straight deductible. C. waiting period. D. calendar-year deductible

calendar-year deductible

HMOs typically pay network physicians or medical groups a fixed annual or monthly payment for each member, regardless of the frequency or type of service provided. This payment is called a Select one: A. corridor payment. B. pro-rata charge. C. capitation fee. D. persistency bonus

capitation fee

A key feature of group medical expense plans is the employee being required to pay a percentage of covered expenses in excess of the deductible. This feature is Select one: A. reinsurance. B. coinsurance. C. other insurance. D. pro-rated insurance

coinsurance

Some employers offer employees a choice of health care plans which are designed to make employees more sensitive to health care costs, to provide an incentive to avoid unneeded care, and to seek low-cost health care providers. Such plans are called Select one: A. employee assistance plans. B. consumer-directed health plans. C. cafeteria plans. D. preferred provider organization (PPO) plans

consumer-directed health plans

Which of the following statements about group long-term disability income plans is true? Select one: A. Benefits are increased if a worker is eligible for Social Security or workers compensation benefits. B. The definition of disability becomes less restrictive after a worker has been disabled for 2 years. C. Coverage is provided for both occupational and nonoccupational disabilities. D. Maximum monthly benefits under long-term disability income plans are lower than the benefits paid under short-term disability income plans

coverage is provided for both occupational and nonoccupational disabilities

The period of time during which an employee can sign up for group insurance coverage without furnishing evidence of insurability is called a(n) Select one: A. waiting period. B. probationary period. C. eligibility period. D. noninsurability window.

eligibility period

The Affordable Care Act requires all new medical expense plans to provide a comprehensive set of coverages and services. This comprehensive set of coverages and services that must be provided are called Select one: A. long-term care benefits. B. essential health benefits. C. respite care benefits. D. dread disease benefits.

essential health benefits.

All of the following are typical characteristics of individual medical expense coverage EXCEPT Select one: A. deductibles. B. coinsurance. C. broad coverage. D. first-dollar coverage.

first-dollar coverage.

An HMO physician who determines if medical care from a specialist is necessary is called a(n) Select one: A. gatekeeper. B. internist. C. network facilitator. D. capitator.

gatekeeper

Which of the following is a characteristic of a health maintenance organization (HMO)? Select one: A. great emphasis on cost containment B. no premiums until care is provided C. unlimited choice of health-care providers D. narrow, limited, medical services provided

great emphasis on cost containment

Ellen purchased a health insurance policy. Under the provisions of the Affordable Care Act, which of the following renewal provisions must the insurer use in the policy? Select one: A. renewable at the insurer's option B. cancellable C. guaranteed issue D. conditionally renewable

guaranteed issue

Because of the Affordable Care Act, beginning in 2014, all new medical expense plans that offer individual and group coverage must accept all individuals and employers in the state who apply for coverage. These insurers are required to continue to renew the coverage at the option of the individual or plan sponsor. Thus, under the Affordable Care Act, the renewal provision is Select one: A. guaranteed issue. B. nonrenewable. C. conditionally renewable. D. renewable at the insurer's option.

guaranteed issue.

Kevin has an individual major medical policy that his insurer agrees to keep in force until age 65. However, the company has the right to increase the premium each year for the underwriting class in which Kevin has been placed. Which renewal provision is found in Kevin's policy? Select one: A. nonrenewable. B. noncancellable C. guaranteed renewable D. conditionally renewable

guaranteed renewable

An employer-funded plan with favorable tax advantages, which repays employees for medical care not covered by the employer's standard medical plan is a(n) Select one: A. flexible spending account (FSA). B. individual retirement account (IRA). C. health reimbursement arrangement (HRA). D. 401(k) account.

health reimbursement arrangement (HRA)

Greta purchased a long-term care policy. Greta's eligibility for benefits under the policy may be triggered by Select one: A. eligibility for Medicare benefits. B. continuous hospitalization for at least 60 days. C. how long premiums have been paid. D. inability to perform activities of daily living.

inability to perform activities of daily living.

The Affordable Care Act has provisions that improve the quality of health care and provide several advantages. All of the following are examples of these provisions EXCEPT Select one: A. increasing the number of physician specialists and reducing the number of general practitioners. B. compensating physicians based on value rather than service volume. C. encouraging integrated health care systems. D. reducing paperwork and administrative expenses.

increasing the number of physician specialists and reducing the number of general practitioners.

Under older group medical expense plans, physicians were paid a fee for each covered service and were reimbursed on the basis of reasonable and customary charges, up to a maximum limit. These older group medical expense plans were called Select one: A. major medical plans. B. indemnity plans. C. managed care plans. D. point-of-service plans.

indemnity plans

Beginning in 2014, the Affordable Care Act requires that most U.S. citizens and legal residents have qualifying health insurance or pay a financial penalty. This provision of the Affordable Care Act is known as the Select one: A. affordable health insurance exchange option. B. individual mandate. C. public option. D. premium subsidy option.

individual mandate.

Med Profs is a group of 18 doctors. These doctors work out of their own offices and treat patients on a fee-for-service basis. In addition, Med Profs doctors also agree to treat HMO members at reduced fees. The type of HMO that uses organizations like Med Profs is called a(n) Select one: A. network model plan. B. individual practice association plan. C. group model plan. D. closed panel plan

individual practice association plan

One provision of the Affordable Care Act is the creation in each state of a new and transparent marketplace where individuals and small employers can purchase affordable, qualified, health insurance plans. This marketplace is called a(n) Select one: A. residual pool. B. insurance exchange. C. catastrophic health insurance pool. D. FAIR plan.

insurance exchange

Under the Affordable Care Act, if a health insurer does not meet the minimum loss ratio requirement, the insurer must Select one: A. not sell any health insurance for a period of one year. B. issue rebates to the people the insurer covered. C. reduce the premium on the policies it sells the following year. D. pay a fine to the federal government.

issue rebates to the people the insurer covered

High deductible group health insurance plans have all of the following characteristics EXCEPT Select one: A. health savings accounts or health reimbursement accounts. B. high dollar deductibles. C. low coverage limits. D. major medical insurance.

low coverage limits

Which of the following statements about group term life insurance is true? Select one: A. It usually is written in the form of 5-year level term insurance. B. It represents only about 5 percent of the group life insurance in force. C. Many employers provide a reduced amount of coverage on retired employees. D. An employee who leaves the group can usually convert the coverage to an individual term life insurance policy.

many employers provide a reduced amount of coverage on retired employees

Which of the following statements about group short-term disability income plans is true? Select one: A. Most plans pay benefits for a period of 3 to 5 years. B. Most plans have a 90-day elimination (waiting) period. C. Most plans provide benefits for total disabilities only. D. Most plans cover occupational disabilities only

most plans provide benefits for total disabilities only

Which of the following statements about group insurance underwriting principles is (are) true? I. If a plan is contributory, 100 percent of the eligible employees must be covered. II. Employees should be allowed to determine their own level of benefits. Select one: A. I only B. II only C. both I and II D. neither I nor II

neither I nor II

An HMO that contracts with two or more independent group practices to provide medical services to covered members is called a(n) Select one: A. individual practice association HMO. B. network model HMO. C. staff model HMO. D. group model HMO.

network model HMO

Which of the following is a provision of the Affordable Care Act? Select one: A. strengthening the use of pre-existing conditions exclusions B. elimination of flexible spending accounts C. no cost-sharing for certain preventative services D. introduction of annual and lifetime limits to control costs

no cost-sharing for certain preventative services

Individual major medical insurance is characterized by which of the following? Select one: A. no exclusions B. narrow range of benefits C. no lifetime benefit limits D. first-dollar coverage

no lifetime benefit limits

Marv is covered by a group health insurance plan at work. His employer funds the entire cost of the group health insurance. Because of this characteristic, the group health insurance plan can be described as Select one: A. defined benefit. B. noncontributory. C. contributory. D. defined contribution. Clear my choice

noncontributory

Barb was injured in an auto accident. She was totally disabled and collected disability income benefits for 8 months. She would like to return to work on a part-time basis to see if her recovery is complete. During this period, her insurer will pay reduced disability income benefits. This type of disability is called Select one: A. permanent disability. B. recurrent disability. C. presumptive disability. D. partial disability.

partial disability.

The inability of the insured to perform some but not all of the important duties of his or her occupation is called Select one: A. partial disability. B. recurrent disability. C. total disability. D. residual disability

partial disability.

A managed care plan under which members can receive medical care from non-network providers at higher out-of-pocket costs is an example of a(n) Select one: A. exclusive provider organization. B. group practice plan. C. individual practice plan. D. point-of-service plan

point-of-service plan

One type of managed care plan has a network of preferred providers. When care is needed, the member has the option to seek care in the network or to go outside the network. If care is received outside the network, the member must pay substantially higher deductibles and coinsurance. This type of managed care plan is a(n) Select one: A. individual practice association plan. B. staff model plan. C. network model plan. D. point-of-service plan

point-of-service plan

Tracy had continuous group health insurance coverage at her previous employer for 6 years. Tracy decided to change jobs. Under federal law, if Tracy changes jobs, the new employer or group health plan must give her credit for previous and continuous health insurance coverage. This characteristic is called Select one: A. vesting. B. portability. C. renewability. D. convertibility.

portability

Prior to passage of the Affordable Care Act, insurance policies typically contained a provision excluding coverage for impairments that were present or were treated during a specified period prior to the effective date of the policy. This provision is a(n) Select one: A. incontestable clause. B. preexisting-conditions clause. C. benefit period provision. D. time limit on certain defenses.

preexisting-conditions clause.

Some physicians, hospitals, and health care organizations agree to make medical services available to insureds at discounted prices. Insureds are not required to use these entities, but if they do, care costs are less than if these entities are not used. Such health care entities are called Select one: A. Health Maintenance Organizations (HMOs). B. Blue Cross/Blue Shield Plans. C. preferred providers. D. health savings accounts (HSAs).

preferred providers.

Under many cafeteria plans, employees make premium contributions with pre-tax dollars. Then they use money from the salary reduction to purchase group health insurance or dental insurance. This type of cafeteria plan is called a Select one: A. health reimbursement arrangement plan. B. full-choice plan. C. premium conversion plan. D. flexible spending account plan.

premium conversion plan

Beth's disability income insurance policy provides benefits for accidental death, dismemberment, and loss of sight. The maximum amount payable under this benefit is known as the Select one: A. monthly benefit. B. face value. C. cash value. D. principal sum.

principal sum.

One provision of the Affordable Care Act is designed to benefit young adults up to age 26. This provision allows these young adults to Select one: A. remain covered under their parents' health insurance policies. B. receive coverage under Medicare if they are not covered by a private health insurance plan. C. receive a tax credit for their health insurance premium if they are unemployed. D. receive low-interest government loans to finance their health insurance.

remain covered under their parents' health insurance policies.

Prior to passage of the Affordable Care Act, insurers could go back to the date a health insurance policy became effective and render the policy void due to a clerical error. This practice, which is prohibited under the Affordable Care Act except in cases of fraud or intentional misrepresentation of a material fact, is called Select one: A. estoppel. B. reformation. C. retention. D. rescission.

rescission.

Doris started a business 2 years ago. The business has been successful, and Doris is thinking about starting to offer some employee benefits for her workers. She plans to offer a group term life insurance benefit. All of the following are usual eligibility requirements for participation in a group life insurance plan EXCEPT Select one: A. be actively at work when insurance becomes effective. B. full-time employment. C. apply for insurance during the eligibility period. D. satisfy a 2-year probationary period.

satisfy a 2-year probationary period

One long-term care insurance benefit trigger considers whether the insured needs supervision to protect against threats to health or safety due to memory loss or disorientation. This benefit trigger is referred to as a(n) Select one: A. needs test trigger. B. medical necessity trigger. C. severe cognitive impairment trigger. D. activities of daily living trigger.

severe cognitive impairment trigger.

Advantages of cafeteria plans include all of the following EXCEPT Select one: A. greater employer control over increasing benefit costs. B. simplicity of benefit administration. C. employees can select benefits that best match their needs. D. reduced taxes for employees

simplicity of benefit administration

Under one type of HMO, the physicians are employees of the HMO and are paid a salary and sometimes an incentive bonus to hold down costs. This type of HMO is called a(n) Select one: A. individual practice association (IPA). B. network model. C. staff model. D. group model

staff model

Connors Company self-funds the medical expense benefits that it provides to its employees. Connors Company has a contract with a commercial health insurance company providing that the health insurance company will pay all claims in excess of $250,000. The arrangement with the health insurance company is called Select one: A. managed care. B. reinsurance. C. stop-loss insurance. D. coinsurance.

stop-loss insurance

All the following are common exclusions in a major medical insurance policy EXCEPT Select one: A. surgeons' fees. B. cost of eyeglasses. C. routine dental care. D. expenses covered by workers compensation laws.

surgeons' fees.

The Affordable Care Act includes a provision designed to help small employers make health insurance coverage available to their employees. This provision allows small employers to directly reduce their federal income tax by a percentage of the employer's contribution to funding health care for employees. This subsidy, in the form of reduction of income taxes, is called a Select one: A. tax deduction. B. tax bracket. C. tax credit. D. marginal tax rate.

tax credit.

Jan needed health insurance. She met with an agent who described the provisions of a health insurance policy. Jan purchased the policy. When she received the policy, she noted that several provisions were different from the provisions the agent described. She was not satisfied with the policy and immediately sent it back to the agent with a note stating her reasons for returning the policy. Jan is guaranteed a premium refund because of which policy provision? Select one: A. ten-day right to examine the policy B. waiting period C. time limit on certain defenses D. waiver-of-premium provision

ten-day right to examine the policy

Which of the following statements about group insurance is true? Select one: A. The actual experience of a large group is a factor in determining the premium that is charged. B. Individual evidence of insurability is usually required. C. Individual contracts are issued to each person covered under a group insurance plan. D. The cost of group insurance is usually higher on a per-person basis than the cost of individual insurance.

the actual experience of a large group is a factor in determining the premium that is charged

Which of the following statements about group short-term disability income plans is true? Select one: A. The amount of disability income benefits typically is equal to some percentage of a worker's normal earnings. B. Most short-term plans cover occupational disability only. C. Most plans have a short elimination period for accidents but cover sickness from the first day of disability. D. Disability is usually defined in terms of any substantial, gainful, employment

the amount of disability income benefits typically is equal to some percentage of a worker's normal earnings

Which of the following statements about group insurance underwriting principles is true? Select one: A. The average age of the group should ideally increase over time. B. Employees should be required to remit premiums directly to the insurance company. C. The employer should ideally share in the cost of a group insurance plan. D. A group should be formed for the specific purpose of obtaining insurance.

the employer should ideally share in the cost of a group insurance plan

Which of the following statements about group universal life insurance is true?Select one: A. The employer usually funds most of the cost of group universal life insurance. B. The interest rate credited to a policy varies over time, but is subject to a minimum guarantee. C. The employee selects where the cash value of the policy is invested. D. The coverage is not convertible to individual insurance if the employee leaves the group.

the interest rate credited to a policy varies over time, but is subject to a minimum guarantee

Most group health insurance plans have adopted the coordination-of-benefits rules developed by the National Association of Insurance Commissioners. Under these rules, if a dependent child is covered by both of the health insurance plans of the child's married parents, which health plan is primary for the child's medical expenses? Select one: A. the plan of the parent who works for the larger employer, based on number of total employees B. always the father's plan C. the plan of the parent whose birthday occurs first in the calendar year D. always the mother's plan

the plan of the parent whose birthday occurs first in the calendar year

All of the following statements about cost controls in dental insurance plans are true EXCEPT Select one: A. The coinsurance percentage used may vary by type of dental service. B. The limit on benefits may be expressed as an annual limit or as a lifetime limit for certain types of dental services. C. To eliminate small claims, there is no coverage for routine oral examinations, X-rays, or cleaning teeth. D. Cosmetic dental work is usually excluded

to eliminate small claims, there is no coverage for routine oral examinations, X-rays, or cleaning teeth

What is the purpose of stop-loss insurance that is used with self-insured group medical expense plans?Select one: A. to exempt self-insured plans from state insurance laws that require mandated benefits B. to obtain administrative services from a commercial insurer C. to have a commercial insurer pay claims that exceed a specified limit D. to require employees to buy insurance for losses in excess of some specified amount

to have a commercial insurer pay claims that exceed a specified limit

All of the following are reasons why employers self-insure medical expense plans EXCEPT Select one: A. to eliminate the need to comply with separate state laws. B. to provide mandated state benefits. C. to reduce certain costs, such as premium taxes and commissions. D. to retain funds until needed to pay claims

to provide mandated state benefits

All of the following are historical reasons for the increase in health care expenditures in the U.S. EXCEPT Select one: A. technological advances in health care. B. universal health insurance coverage. C. employment-based health insurance. D. cost insulation because of third-party payers.

universal health insurance coverage.

Many group insurers contact employers and arrange for their individual insurance producers to meet with interested employees at the workplace to conduct sales interviews. This distribution method is called a Select one: A. mixed marketing program. B. mass merchandising program. C. cafeteria plan. D. worksite marketing program.

worksite marketing program