AH5 Q&A Group Health Insurance

24. Continuous period of creditable coverage means the period during which a person was covered by creditable coverage, if during the period of the coverage the individual had no breaks in coverage greater than:

a. -> 63 days. b. 36 days. c. 60 days. d. 30 days

16. Of the following, which individuals would probably not be considered a qualified beneficiary under COBRA?

a. -> A dependent child of the employee not currently covered under the employee's health plan. b. A dependent child of the employee's born during the 18 month coverage period. c. The employee's spouse. d. The employee. e. *A qualified beneficiary is any individual who is covered under group health plan on the day before a qualifying event. Children adopted or born during the coverage period are considered qualified beneficiaries.

10. Barney and Betty are a young married couple with 2 small children. Each have employer-sponsored major medical coverage for the entire family. Barney was born on July 22, 1982, and Betty was born on February 14, 1987. Under the birthday rule, whose plan is primary for the children?

a. -> Betty's plan b. Barney's plan c. Neither, they coordinate equally d. Barney's plan is primary; Betty's plan is excess e. *If each parent names his or her children as dependents under his or her group policy, the order of payment under the birthday rule states that the coverage of the parent whose birthday is earliest in the year will be considered primary.

17. What group insurance provision is designed to eliminate duplication of benefit payments and overinsurance when an individual is covered by more than one group health plan?

a. -> Coordination of Benefits b. No Loss-No Gain c. COBRA d. HIPAA e. * Coordination of benefits (COB) is designed to eliminate duplication of benefit payments and overinsurance when an individual is covered by more than one group health plan. The provision does not limit the maximum amount of benefits the insured is entitled to; rather, it is designed to offer insured's the most coverage possible while eliminating overinsurance.

33. All of the following are qualifying events under COBRA except:

a. -> Job promotion of the covered employee. b. Termination of employment. c. Death of the covered employee. d. Divorce or legal separation of the covered employee e. *Essentially, if you or your dependents lose Group Medical coverage because your employment is terminated, you get a divorce, or you die, your family can still continue the same coverage you enjoyed prior to one of these qualifying events taking place.

22. In underwriting group insurance, companies use all of the following underwriting guides to guard against adverse risk EXCEPT:

a. -> Medical examinations. b. Minimum participation rules. c. Benefits determined by formula. d. Careful group selection. e. *Medical examinations are not typically required for during the initial enrollment period for group plans.

3. An important term for a group medical expense policy is creditable coverage. Which of the following is not considered creditable coverage?

a. -> Medical payments coverage in an auto policy b. A group health plan c. A state health benefits risk pool d. Part A or B of the Social Security Act (Medicare) e. *Medical payments coverage in an auto policy is not considered creditable coverage.

11. When underwriting group health insurance:

a. -> The underwriter generally focuses on the group as a whole, rather than on specific individuals. b. The underwriter generally requires extensive medical information from all of the group members. c. The underwriter generally requires extensive medical underwriting on each individual. d. The underwriter generally focuses on individual members of the group, rather than the group as a whole. e. *The underwriter generally focuses on the group as a whole, rather than on specific individuals.

9. You've been covered for 6 months under a group health policy covering 10 employees. You then decide to take a job with a larger company with a group health plan. How long must you wait to be covered under the new employer group plan?

a. -> You will have immediate coverage. b. 30 days. c. 60 days. d. 12 months e. *In this situation, HIPPA provides that if you go to work for an employer with a group plan covering 2 or more employees, you would be covered immediately.

15. Mark is covered under his wife's group health plan. After she is killed in an auto accident, Mark is eligible to continue coverage under COBRA for how long?

a. 0 months b. 18 months c. 26 months d. -> 36 months e. *Benefits triggered by the death of a covered spouse will continue under COBRA for 36 months.

19. What is the minimum number of group members required for maternity benefits to be covered on the same basis as nonmaternity benefits in a group medical expense plan?

a. 5 b. 10 c. ->15 d. 25 e. *If maternity benefits are included as a part of a group plan, the group must have 15 members or more to include maternity benefits on the same basis as nonmaternity benefits.

7. You were covered by an employer group for 7 months before leaving your job. You acquired new coverage under your new employer within ten days of losing your old plan. The new plan must credit ___ months to the preexisting condition limitation, leaving you a maximum of ____ months during which those conditions may be limited or denied.

a. 5/7 b. -> 7/5 c. 7/12 d. 5/12 e. *The new plan must credit 7 months to the preexisting condition limitation, leaving you a maximum of 5 months during which those conditions may be limited or denied.

18. If a company has 2,000 employees eligible for a contributory group life insurance program, how many would be required to participate?

a. 500 b. 1,000 c. -> 1,500 d. 2,000 e. *A contributory group life insurance requires a minimum participation of 75% of eligible employees

20. If a company has 2,000 employees eligible for a noncontributory group life insurance program, how many would be required to participate?

a. 500 b. 1,000 c. 1,500 d. -> 2,000 e. *Noncontributory group life plans require 100% participation.

8. You were covered by an employer group for three years, at which time you lost your job and insurance coverage. You did not get a new job or insurance until 6 months later. Since you had a break in coverage which exceeded ___ days, preexisting condition limitations may be applied under the new plan.

a. 60 b. -> 63 c. 65 d. 66 e. *Since you had a break in coverage which exceeded 63 days, preexisting condition limitations may be applied under the new plan.

31. You were covered by an employer group plan for two years before leaving your job. You acquired coverage under your new employer's group plan; however, there was a break between the two plans of 45 days during which you had no health insurance. Since the break in coverage did not exceed ____ days, the new insurer must credit you for ____ years of coverage and cannot apply a preexisting condition limitation.

a. 63/1 b. 50/1 c. 45/2 d. -> 63/2 e. *Since the break in coverage did not exceed 63 days, the new insurer must credit you for 2 years of coverage and cannot apply a preexisting condition limitation.

25. Barney and Betty is a young married couple with two small children. They both have employer sponsored major medical coverage for the entire family. Barney was born on July 22, 1982, and Betty was born on February 14, 1987. Under the gender rule, whose plan is primary for the children?

a. Betty's plan b. -> Barney's plan c. Neither, they coordinate equally d. Betty's is primary; Barney's is excess e. *If each parent names his or her children as dependents under his or her group policy, the order of payment under the gender rule states that the father's coverage is always considered primary.

1. What is the greatest concern of underwriters in issuing group insurance?

a. Conversion options. b. Noncontributory plans. c. -> Adverse selection. d. Contributory plans. e. *Adverse selection in group plans can adversely affect the plan and is generally the greatest concern to group underwriters.

6. For those who have group health coverage and want to work past the age of 65, which coverage becomes secondary?

a. Group health plan b. -> Medicare c. Medicaid d. Medigap e. *For those who want to work past the age of 65, Medicare becomes the secondary payer while their group insurance remains the primary payer. The group health plan will pay first, while Medicare pays secondary.

21. All of the following are characteristics of group health insurance except:

a. Group plans are usually written without evidence of insurability. b. Minimum participation standards are required. c. -> Each insured receives a policy. d. The group is underwritten as a whole, rather than individually. e. *Each insured receives a certificate of insurance rather than an individual policy.

26. If you or your dependents lose group medical coverage because your employment is terminated, you may be able to continue your group health coverage under:

a. HIPPA. b. -> COBRA. c. TEFRA. d. SGLI. e. * If you or your dependents lose Group Medical coverage because your employment is terminated, you get a divorce, or you die, your family can still continue the same coverage you enjoyed prior to one of these qualifying events taking place.

4. Dave started work at ABC Plumbing on May 15. ABC offers a noncontributory group life insurance plan to its employees after a probationary period. If the probationary period is the normal time period, Dave will be eligible for group life insurance on:

a. May 30. b. -> August 15. c. June 15. d. July 15. e. *The typical probationary period is 90 days.

2. Creditable coverage means coverage of the person provided under any of the following except:

a. Part A or B of Medicare. b. CHAMPUS. c. Federal Employees Health Benefits Program. d. -> Workers'' Compensation. e. *Creditable coverage does not include Workers' Compensation.

29. Which of the following is true about conversion from group health insurance to an individual policy?

a. Proof of insurability will be required. b. -> Premiums for the new policy will be based on the insured's attained age. c. Conversion must be applied for within six months of termination. d. Coverage must be converted to a term policy. e. *Premiums for the new individual policy will be based on the insured's attained age.

28. Which of the following statements regarding to the conversion privilege in group health insurance policies is false?

a. Some states specify minimum benefits for conversion policies. b. -> Insured's who voluntarily leave or who are terminated have 180 days to convert their coverage to an individual policy. c. A conversion privilege applies when a group health policy is terminated. d. An insured that is terminated from the plan can acquire a conversion policy without evidence of insurability within a certain period of time. e. *With the conversion privilege in group health insurance, an employee who quits their job or is terminated has 31 days to exercise their right to convert without having to show evidence of insurability.

30. All of the following statements are false except:

a. The eligibility period runs before the probationary period. b. A policy must have both a probationary and an eligibility period. c. A policy cannot have both a probationary and an eligibility period. d. -> The probationary period runs before the eligibility period. e. *The probationary period must run before the eligibility period.

13. When an employer sets up a group plan for its employees, the contract of coverage is between who?

a. The employer and employees b. The employees and the insurer c. -> The employer and the insurer d. None of the above e. *Since the employer is issued a master contract from the insurer, the contract is between the employer and the insurer. The covered employees receive a certificate of insurance which serves as proof of coverage only.

12. When a person converts from a group health policy to an individual policy:

a. The individual plan will provide the same benefits as the group plan. b. The individual plan will always cost less than the group plan. c. The individual plan will provide better benefits than the group plan. d. -> The individual plan will not provide the same benefits as the group plan. e. *When converting to an individual plan, benefits will not be the same as the group plan. Benefits under a group plan are not usually as restrictive as individual plans.

5. You have been covered under your employer's group health plan for 13 months when you are offered a position with another company. Assuming the new employer's group plan covers 2 or more employees, how would the new plan treat preexisting conditions?

a. There would be a 6 month preexisting conditions waiting period in the new plan. b. There would be a 30 day preexisting conditions waiting period in the new plan. c. There would be a 90 day preexisting conditions waiting period in the new plan. d. -> There would be no preexisting conditions waiting period in the new plan. e. *If you have been covered for at least 12 months under your current group plan, and then leave your current plan, you will receive a Certificate of Prior Creditable Coverage, and your time in service under the previous plan erases the preexisting conditions limitation of your new employer's plan if you make timely entry into the new plan.

23. You have been covered under your employer's group health plan for 13 months when you are offered a position with another company. Assuming the new employer's group plan covers 2 or more employees, how would the new plan treat preexisting conditions?

a. There would be a 6 month preexisting conditions waiting period in the new plan. b. There would be a 30 day preexisting conditions waiting period in the new plan. c. There would be a 90 day preexisting conditions waiting period in the new plan. d. ->There would be no preexisting conditions waiting period in the new plan. e. *If you have been covered for at least 12 months under your current group plan, and then leave your current plan, you will receive a Certificate of Prior Creditable Coverage, and your time in service under the previous plan erases the preexisting conditions limitation of your new employer's plan if you make timely entry into the new plan.

14. Of the following statements concerning the Coordination of Benefits provision, which one is correct?

a. This provision can be found in both group and individual policies. b. -> The purpose of the Coordination of Benefits provision is to eliminate duplication of benefit payments and overinsurance. c. The provision allows for an equal division of benefit payments for all policies that cover an individual. d. Coordination of benefits provisions are typically found only in individual policies. e. *This is a provision found only in group plans. The coordination of benefits provision normally becomes effective with a married couple that are covered by each other's plan. The provision limits the total amount of claims paid from all insurers covering the insured. It allows the maximum amount of benefits to be paid while eliminating overinsurance and duplication of benefit payments. The COB provision establishes which plan is the primary plan and which is the secondary plan. After the primary plan has paid its maximum benefit, the insured may submit a claim to the secondary insurer for any additional benefits that may be payable.

32. When underwriting a group health plan, company underwriters evaluate each individual employee of the group before making a decision to accept the group or not.

a. True b. -> False c. Partially true d. Neither true or false e. *When underwriting a group health plan, company underwriters evaluate the group as a whole instead of each individual employee. Individual employees who choose group coverage during the enrollment period are not generally subjected to a medical exam.

27. You've been covered for 6 months under a group health policy covering 10 employees. You then decide to take a job with a larger company with a group health plan. How long must you wait to be covered under the new employer group plan?

a. You will have immediate coverage. b. 30 days. c. 60 days. d. 12 months. e. *In this situation, HIPPA provides that if you go to work for an employer with a group plan covering 2 or more employees, you would be covered immediately.