CH 6 VA State and Health Exam

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? A) 6 B) 12 C) 24 D) 36

B) 12

Which of the following provides coverage on a first-dollar basis? A) Basic expense B) Accident expense C) Supplementary major medical D) Limited major medical

A) Basic expense

The amount a self-insured company will pay out-of-pocket for health insurance covers before a stop loss policy goes into effect is referred to as the A) Deductible. B) Stop loss limit. C) Aggregate. D) limit of liability.

A) Deductible.

If an insured is not required to pay a deductible, what kind of coverage does he/she have? A) First dollar B) Corridor C) Major Medical D) Comprehensive

A) First dollar

Another term used to describe "no deductible" is A) First-dollar basis. B) Comprehensive. C) Total coverage. D) Immediate cooperative.

A) First-dollar basis.

Alden is involved in a small plane accident that render him permanently deaf, although he does not sustain any other major injuries. Alden is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? A) Full benefits B) Partial benefits C) Full benefits for two years D) No benefits

A) Full benefits

An association could buy group insurance for its member if its meets all of the following requirements EXCEPT A) Has at least members. B) Has a constitution and by-laws. C) Holds annual meetings. D) Is contributory.

A) Has at least members.

HSAs are designed to A) Help individuals save for qualified health expenses. B) Increase individual interest income. C) Insure against catastrophic losses. D) Provide duplicate coverage for health care expenses

A) Help individuals save for qualified health expenses.

To be eligible for a Health Savings Account, an individual must be covered by a A) High-deductible health plan. B) Low-deductible health plan. C) Nondeductible health plan. D) Health plan with no deductible.

A) High-deductible health plan.

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the A) Major medical coverage B) Comprehensive expense coverage C) Interval expense coverage D) Limited coverage

A) Major medical coverage

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? A) Special Risk Policy B) Limited Risk Policy C) Specified Disease Policy D) Credit Disability

A) Special Risk Policy

When an employee covered under a health reimbursement account changes employers, the HRA A) Stays with the employer B) Follows the employee C) Returns to the insurer D) Is split between the employee and employer

A) Stays with the employer

Your client wants to know what the tax implication are for contributions to a Health Savings Account. You should advise her that contributions are A) Tax deductible. B) Subject to personal income taxes. C) Post-tax dollars. D) Subject to capital gains taxes

A) Tax deductible.

What happens if a non-member physician is utilized under the Point-Of-Service plan? A) The attending physician will be paid a fee for service, but the member patient will have to pay a high coinsurance amount of percentage for the privilege. B) The non-member physician will be paid a fee for service C) The non-member physician will be paid a fee for service, but the member patient will be penalized per visit on his/her monthly premium. D) The member patient will have to pay all costs out-of-pocket.

A) The attending physician will be paid a fee for service, but the member patient will have to pay a high coinsurance amount of percentage for the privilege.

Ana loses her left arm in an accident that is covered by her Accidental Death and Dismemberment policy. What kind of benefit will Anna most likely receive from this policy? A) The capital amount in a lump sum B) The principal amount in a lump sum C) The capital amount in monthly installments D) The principal amount in monthly installments

A) The capital amount in a lump sum

Jim is covered by a high deductible health plan. He makes regular contributions to this HSA. How are those contributions treated in regards to taxation? A) The contributions are tax-deductible B) The contributions are considered pre-tax C) The contributions are not deductible D) The contributions are taxed as income

A) The contributions are tax-deductible

How does a member of an HMO see a specialist? A) The primary care physician refers the member. B) The insurer chooses the specialist. C) HMOs do not cover specialist. D) The member is allowed to choose his/her own specialist/

A) The primary care physician refers the member.

An insured has an Accidental Death & Dismemberment policy with a principal value of $50,000. He loses sight in both eyes in a hunting accident. How much will he receive? A) $0 B) $50,000 C) $100,000 D) $25,000

B) $50,000

Brandon owns a small hardware store. He is involved in car accident that renders him totally disabled for half a year. Which type of insurance would help him par for expenses of the company during the time of his disability? A) Business disability policy B) Business overhead expense policy C) Key person insurance. D) Disability buy-sell insurance.

B) Business overhead expense policy

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance? A) Request a refund of unearned premium. B) Convert to an individual health policy. C) Sue the employer. D) Apply for another group health insurance.

B) Convert to an individual health policy.

Who can provide skilled nursing care? A) Community volunteer B) Doctor C) Spouse D) Family Member

B) Doctor

A policy which covers medical costs related to a specific condition is called a A) Limited Coverage Policy B) Dread Disease Policy C) Condition-Specific Policy. D) Specific Condition Policy

B) Dread Disease Policy

If your health care plan has characteristics of an HMO and PPO, what type of plan do you have? A) FSA B) POS C) HIPAA D) MET

B) POS

Don has both a basic expense and major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off? A) Submit written notification to his major medical insurance company B) Pay a special deductible on his major medical policy C) Wait 6 months in order to be covered again D) Nothing needs to be done. The hospital's billing staff will make the appropriate arrangements

B) Pay a special deductible on his major medical policy

Don has both a basic expense and major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off? A) Submit written notification to this major medical insurance company B) Pay a special deductible on his major medical policy C) Wait 6 months in order to be covered again D) Nothing needs to be done. The hospital's billing staff will make the appropriate arrangements.

B) Pay a special deductible on his major medical policy

Todd has been informed that he has a hernia that requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using? A) Conversion factor B) Relative value C) Basic Surgical D) Point-based medical

B) Relative value

Under HIPPA, how many months of creditable coverage must a new employee have earned to not have a pre-existing condition exclusion in the new plan? A) 3 months B) 6 months C) 12 months D) 18 months

C) 12 months

Which of the following is the required number of participants in a contributory group plan? A) 25% B) 50% C) 75% D) 100%

C) 75%

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a health Savings Account? A) Jenny is 60 and also has a long-term care insurance plan. B) Joe is 50 and is not covered by any other health insurance. C) Amanda is 67 and is covered by basic medical expense policy. D) Andy is 55 and is covered under a dental care policy.

C) Amanda is 67 and is covered by basic medical expense policy.

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? A) The employee can covert from group to individual insurance within 31 days of termination. B) The premium of the individual health insurance policy can be higher than the original policy. C) By law, the new, individual policy must provide the same benefits as the group insurance policy. D) Continuation of group coverage need not include dental, vision, or prescription drug benefits.

C) By law, the new, individual policy must provide the same benefits as the group insurance policy.

Which of the following is true regarding inpatient hospital care for HMO members? A) Services for treatment of mental disorders are unlimited. B) Inpatient hospital care not part of HMO services. C) Care can be provided outside of the service area. D) Care can only be provided in the service area.

C) Care can be provided outside of the service area.

Becasuse of the history of cancer in her family, Julie purchased a polcy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? A) Specified Health Policy B) Term Health Policy C) Dread Disease Policy D) Family History Cancer Policy

C) Dread Disease Policy

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How was this plan since changed? A) The minimum number of employees has decreased. B) The minimum number of employees has increased. C) Employers are no longer forced to offer HMO plans. D) The source of funding has changed.

C) Employers are no longer forced to offer HMO plans.

As it pertains to group health insurance, COBRA stipulates that A) Terminated employees must be allowed to convert their group coverage to individual policies B) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. C) Group cover must be extended for terminated employees up to a certain period of time at the former employee's expense. D) Retiring employees must be allowed to convert their group coverage to individual policies.

C) Group cover must be extended for terminated employees up to a certain period of time at the former employee's expense.

An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness two weeks after the policy was issued, how much will the policy pay? A) It will way pay up to 10 years of benefits. B) It will pay until the insured is released from the hospital. C) Nothing, illness is not covered during the first 20-days of the contract. D) The insured will receive a return of premium

C) Nothing, illness is not covered during the first 20-days of the contract.

The primary purpose of disability income insurance is to A) Reimburse lost income while in the hospital B) Reimburse loss of income to a family due to the death of the insured. C) Replace income lost due to a disability. D) Reimburse medical expenses and/or loss income due to accidents at work.

C) Replace income lost due to a disability.

An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true? A) There will be a tax and a 20% penalty. B) There will be a 20% penalty. C) There will be a tax. D) There will be no taxes and no penalties.

C) There will be a tax.

Insurers usually do not reimburse the claimants for the full 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? A) To reimburse only for the premiums paid into the policy. B) Disability income policies are design to pay no more than 50% of the pre-disability income. C) To provide an incentive for the insured to return to work. D) To make sure there is enough money to reimburse all the claims.

C) To provide an incentive for the insured to return to work.

Social Security Supplement (SIS) or Social Security Riders are used to supplement or replace benefits that might be payable under Social Security Disability. In which of the following situations would these NOT provide for the payment of income benefits? A) When the insured is eligible for Social Security benefits but before the benefits begin (usually there is a 5 month waiting period for Social Security benefits). B) If the insured has been denied coverage under Social Security ( roughly 75% of the people who apply for Social Security benefits are denied coverage because of their rigid definition of total disability). C) When the amount payable under Social Security is more than the amount payable under the rider. D) When used to replace or supplement benefits payable under other social insurance programs, such as Workers Compensation.

C) When the amount payable under Social Security is more than the amount payable under the rider.

Can an individual who belongs to a POS plan use an out-of-network physician? A) Yes, but they must use the POS physician first B) Yes, but they must the HMO physician first C) Yes, and they may use any preferred physician, even if not part of the HMO D) NO

C) Yes, and they may use any preferred physician, even if not part of the HMO

What percentage of a company's employees must take part in a noncontributory group life plan? A) 0% B) 25% C) 75% D) 100%

D) 100%

Regarding a PPO, which of the following is correct when selecting a primary care physician? A) The insured may choose medical providers not found on the preferred list and still retain coverage. B) The insured is allowed to receive care from any provider, but if the insured selects a PPO provider the insured will realize lowed out-of-pocket costs. C) If a non-network provider is used, the insured's out-of-pocket costs will be higher. D) All of the above are correct

D) All of the above are correct

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? A) Proprietary Transfer B) Ownership Transition C) Transfer of Ownership D) Disability Buy-Sell

D) Disability Buy-Sell

Which of the following is NOT covered by Health Maintenance Organizations (HMOs)? A) Immunizations B) Routine physicals C) Well-baby care D) Elective services

D) Elective services

Long term care coverage may be sold in all of the various way EXCEPT A) Group long term care B) Individual long term care. C) Endorsement to life policy. D) Endorsement to health policy.

D) Endorsement to health policy.

Which of the following is available to employers of all sizes? A) MSAs B) LPAs C) HSAs D) HRAs

D) HRAs

Which of the following is NOT an advantage of an HRA for an emplyoer? A) Employer contributions are tax-deductible. B) HRAs give smaller employers an opportunity compete with larger employers in the benefits offered to employees C) HRAs permit an employer to reduce health plan cost by coupling the HRA with a high-deductible ( and usually lower-cost) health plan D) HRAs are defined benefit programs

D) HRAs are defined benefit programs

Which type of hospital policy pays a fixed amount each day that the insured is in a hospital? A) Surgical B) Blanket C) Medigap D) Indemnity

D) Indemnity

What is NOT a benefit of a POS plan? A) IT allows the employee to use an HMO provided doctor. B) It allows the employee to use a doctor not covered under the HMO. C) With the Point-Of-Service plan the employees do not have to make a decision between the HMO or PPO plans that lock them in. D) It allows guaranteed acceptance of all applicant.s

D) It allows guaranteed acceptance of all applicant.s

Which of the following is NOT true regarding a flexible spending account? A) It operates on "use-or-lose: basis. B) It provides an opportunity to receive benefits on a pretax basis C) It is a cafeteria plan D) It does not have limits on contributions

D) It does not have limits on contributions

Garret is involved in car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? A) Full benefits B) Partial benefits C) Full benefits until the blindness lifts D) No benefits

D) No benefits

Sherman owns a general disability policy and is injured during a war, rendering him disabled. What will be the extent of benefits that he will receive? A) Full B) 50% C) 25% D) None

D) None

When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called A) Managed care. B) Indemnity plans C) Point of Service Plans (POS) D) Preferred Provider Organization (PPO)

D) Preferred Provider Organization (PPO)

Assume that the insured owns a Major Medical policy with a $2,00 deductible, an 80/20 coinsurance and $15,000 stop loss limit. The insured suffered covered losses of $10,000. How much will the insurance company pay for the claim? A) $10,000 B) $6,400 C) $3,600 D) $8,000

B) $6,400

At what age may an individual make withdrawal from an HSA for nonhealth purposes without being penalized? A) 65 B) 62 C) 59.5 D) 55

A) 65

Which of the following would be an example of a limited accident and health insurance policy? A) A long-term care policy B) A dread disease policy C) An automobile liability policy D) A medicare policy

B) A dread disease policy

Which of the following does NOT describe the principal goal of a Preferred Provider Organization? A) Provide the subscriber a choice of physicians B) Provide the subscriber a choice of hospitals C) Provide medical services at a reduced cost D) Provide medical services only from physicians in the network

D) Provide medical services only from physicians in the network

Benefit periods for individual short-term disability policies will usually continue from A) Two years to age 65. B) One week to four weeks. C) Three months to three years. D) Six months to two years.

D) Six months to two years.

Which of the following would be a qualifying event as it relates to the Consolidate Omnibus Budget Reconciliation Act (COBRA)? A) Termination of employment for stealing. B) Becoming covered under another group plan. C) Eligibility for Medicare. D) Termination of employment for "downsizing"

D) Termination of employment for "downsizing"

Which of the following statements concerning group health insurance is correct? A) Only the employer receives a certificate of insurance B) Each employee receives a policy. C) Under group insurance, the insurer may reject certain individuals from coverage. D) The employer is the policyholder.

D) The employer is the policyholder.

Hospital indemnity/hospital confinement indemnity policy will provide payment based on A) The type of illness. B) The premiums paid into the policy. C) The medical expense incurred. D) The number of days confined in a hospital.

D) The number of days confined in a hospital.