health

Guaranteed issue is a process by which eligible employees may enroll in the company's group plan without restriction. Guaranteed issue is usually available on what basis? Select one: a. At any time the employee wishes to enroll b. At the employer's discretion c. At the insurance company's discretion d. At the time of hire or other annual open enrollments

Guaranteed issue must be administered on a non-discriminatory basis. When an employee is hired, he/she may enroll without restriction within the prescribed enrollment period. If there is an open enrollment at a later time, the employee may also qualify for guaranteed issue. Neither the employer, nor the insurance company may single out an individual employee for exclusion, pre-existing restrictions or any other action. The correct answer is: At the time of hire or other annual open enrollments

Kathy has a cancellable health policy. Her insurance company may do any of the following, EXCEPT: Select one: a. Raise premiums for her class of insureds b. Cancel the policy with notice c. Change the state required provisions of the policy d. Give a 30-day notice of cancellation

The company can cancel a policy or change premiums, but can't change the state mandated provisions. The correct answer is: Change the state required provisions of the policy

The death benefit for an accidental death and dismemberment policy is referred to as which of the following? Select one: a. Maximum benefit b. Principal sum c. Capital sum d. Residual sum

The principal sum is the face amount of the coverage and is paid out if the insured dies or loses two limbs, two hands, two feet, or vision in both eyes as a result of an accident. The correct answer is: Principal sum

Bruce has a noncancellable health policy. The company may do any of the following, EXCEPT: Select one: a. Pay the benefits when they are due b. Cancel the policy or raise premiums c. Offer different premium modes d. Pay the listed beneficiary any death benefit due

A noncancellable policy guarantees the rate and the renewal from change or cancellation. The correct answer is: Cancel the policy or raise premiums

A major medical expense plan: Select one: a. Is provided only through a group plan b. Supplements Medicare c. Has large lifetime benefit maximums d. Never has a deductible

Major medical is designed to have substantial lifetime maximums to provide protection for the much larger medical bills. The correct answer is: Has large lifetime benefit maximums

How many mandatory provisions for health insurance contracts are there? Select one: a. 10 b. 11 c. 12 d. 13

There are 12 mandatory and 11 optional provisions that may be added. Good numbers to remember for the test. The correct answer is: 12

Which of the following is not described in the provisions section of a disability income policy? Select one: a. Length of the benefit period b. Length of the elimination period c. Benefit amount d. Definition of disability

Disabilities are defined in the definitions section of a disability income policy. The correct answer is: Definition of disability

The NAIC insurance model includes how many mandatory standard provisions for health insurance contracts? Select one: a. 10 b. 11 c. 12 d. 13

The current law includes 12 mandatory provisions. The correct answer is: 12

The NAIC insurance model includes how many optional standard provisions for health insurance contracts? Select one: a. 10 b. 11 c. 12 d. 13

The current law includes 11 optional provisions. The correct answer is: 11

Joan asked her agent when will she have benefits if she reinstates a lapsed health policy. Her agent would be correct if he told her: Select one: a. 10 days for accidents and 30 days for sickness b. Immediately for accidents and 10 days for sickness c. 30 days for either sickness or accident, but there would be a new pre-existing condition period d. 30 days for accidents and 60 days for sickness

The reinstatement provision states that a reinstated policy will cover accidents immediately, but will not cover sickness until 10 days have passed. The correct answer is: Immediately for accidents and 10 days for sickness

Wildlife Manufacturing Company has a non-contributory health plan. How many employees must participate to meet enrollment requirements? Select one: a. 75% b. 90% c. 50% d. 100%

100% enrollment is required when the employer pays the premium. The correct answer is: 100%

The conversion period for an employee to convert their group policy to an individual policy is: Select one: a. 7 days b. 15 days c. 31 days d. 45 days

31 days is the standard conversion period where it applies. The correct answer is: 31 days

A grace period allows a certain number of days by contract for the insured to submit a premium. Except for weekly and monthly premium contracts, what is the usual grace period? Select one: a. 7 days b. 15 days c. 31 days d. 60 days

31 days is the usual grace period for all policies other than weekly premium policies, which have a grace period of 7 days, and monthly premium policies, which have a grace period of 10 days. The correct answer is: 31 days

Samantha has a basic plan with a supplemental major medical through her employer. The deductible that will be applied when she is eligible for major medical benefits is called which of the following? Select one: a. An integrated deductible b. A corridor deductible c. A flat deductible d. A residual deductible

A corridor deductible is the type of deductible used when a basic plan is involved. Some benefits will be paid with no deductible and major medical will cover those not fully covered by the basic plan, but there is a deductible called a corridor. The corridor is between the basic and the major medical. The correct answer is: A corridor deductible

Valerie has a health insurance policy that states that the insurance company may not cancel the policy, but they may increase the rates on a specified class of insureds. Valerie has a: Select one: a. Non-cancellable policy b. Optionally renewable policy c. Guaranteed renewable policy d. Conditionally renewable policy

A guaranteed renewable policy allows the insurance company to increase rates on the policy anniversary, but it may not cancel the policy. This is common for health insurance contracts. The correct answer is: Guaranteed renewable policy

A health insurance policy will generally exclude all of the following losses, EXCEPT: Select one: a. Injuries sustained while falling off a ladder b. Losses sustained as a result of drug abuse c. Hurting oneself intentionally d. Injuries incurred while robbing a bank

A health insurance policy would not exclude losses resulting from falling off a ladder. The other options are exclusions. The correct answer is: Injuries sustained while falling off a ladder

Major medical may have any of the following deductibles, EXCEPT: Select one: a. Flat b. Stacked c. Corridor d. Integrated

A major medical policy may have a flat, corridor, or integrated deductible.

Sometimes small businesses are grouped together in order to obtain insurance as one large group. This practice is a characteristic of which of the following? Select one: a. A BlueCross BlueShield plan b. A franchise plan c. Health Maintenance Organization (HMO) d. A multiple employer trust (MET)

A multiple employer trust (MET) is the grouping of small businesses together to obtain insurance as one large group. The correct answer is: A multiple employer trust (MET)

Mr. Jones wants a health policy that can never be cancelled by the insurance company. He also wants one that will guarantee the premiums for the life of the policy (no premium increases). He should look for a policy that is: Select one: a. Noncancellable b. Guaranteed renewable c. Renewable for life d. Provisionally renewable

A noncancellable policy provides the insured the right to continue coverage by making timely payment of premiums. The insurer cannot make changes to a noncancellable policy without the consent of the insured. The noncancellable renewability provision is the same as the guaranteed renewable provision, except that premiums cannot be increased. The correct answer is: Noncancellable

Harry has a major medical plan that has a new deductible for each illness or accident he incurs. What is the name for this type of deductible? Select one: a. Annual deductible b. Carryover deductible c. Per cause deductible d. Aggregate deductible

A per cause deductible will pay for a specific spell of illness. A new sickness will begin a new period of illness with a new deductible. The correct answer is: Per cause deductible

Susan has paid the maximum out-of-pocket required on her major medical plan for the year. Any additional claims will be reimbursed at what level? Select one: a. 75% b. 80% c. 90% d. 100%

After Susan has paid her maximum out-of-pocket limit, she will be reimbursed for 100% of all medical expenses. The correct answer is: 100%

The incontestable clause in a health policy will provide what protection? Select one: a. After two years, the claim may not be contested by the insurance company, except for fraud. b. The insured may not contest the premiums after two years. c. The policy may not be altered for any reason after two years. d. Premiums may not be waived until the end of two years.

After two years, except for fraud, the claim may not be contested by the insurance company. This is a standard provision in virtually all policies. Note the exception for fraud because there is no limit for that. The correct answer is: After two years, the claim may not be contested by the insurance company, except for fraud.

COBRA is a provision that allows a terminating employee to continue health insurance under his employer's plan for a specified period of time. If an employer fails to allow this benefit, its consequences may include which of the following? Select one: a. Private lawsuits under ERISA b. IRS excise taxes c. Liability for past and future medical expenses during the qualified beneficiary's continuation period d. All of the above

An employer's failure to comply with COBRA may result in that employer being subject to IRS excise taxes, private lawsuits under ERISA, and liability for past and future medical expenses. The correct answer is: All of the above

A company may use a rider or an endorsement to do any of the following, EXCEPT: Select one: a. Add benefits b. Change the insuring clause c. Increase premiums d. Restrict benefits

An insurance company may not use a rider or endorsement to change the insuring clause. The insuring clause contains the insurer's basic promise to pay a sum of money in the event of a covered loss to the beneficiary. The correct answer is: Change the insuring clause

An insurance company must pay a disability benefit no less frequently than: Select one: a. Weekly b. Bi-weekly c. Quarterly d. Monthly

An insurance company must pay a disability benefit no less frequently than monthly. The correct answer is: Monthly

Your disability policy states that to be considered disabled you must not be able to work as a result of an accident or sickness. That definition is known as: Select one: a. Any occupation definition b. Partial disability definition c. Residual disability definition d. Rehabilitative disability

Any occupation is the most restrictive definition of disability used except for Social Security. If you can work, you are not considered disabled. This is most commonly used in short term policies rather than long term policies; however, if a group is predominantly blue collar in make up, it may also be used in that case, as well. The correct answer is: Any occupation definition

Of the following statements about HMOs, which is CORRECT? Select one: a. They place special emphasis on preventive health care. b. Subscribers pay a one-time, fixed fee in advance for health care services. c. HMO's generally are owned by insurance companies. d. They mainly provide emergency medical care for subscribers.

As their name suggests, HMOs place special emphasis on preventative health care. They provide free annual physical examinations, special screens, well-child examinations, inoculations, and other services that are aimed at preventing illness. The correct answer is: They place special emphasis on preventive health care.

An association is required to do all of the following to qualify for an association group plan, EXCEPT: Select one: a. The employer must pay all premiums in full for its employees. b. The association must have been in existence for at least two years. c. The association must be a natural group, not formed specifically to provide benefits. d. There must be at least 100 members.

Association group health plans may be contributory or noncontributory. An employer may pay premiums for these employees, but is not required to under the association rules. The correct answer is: The employer must pay all premiums in full for its employees.

All the following are considered basic health care services offered by HMOs, EXCEPT: Select one: a. Rehabilitative and home health services b. Emergency care c. Inpatient hospital care d. X-ray services

Basic health care services include emergency care, inpatient hospital and physician care, outpatient medical and chiropractic services, laboratory and x-ray services, coverage for certain low-protein food products, optional coverage for mental health services for alcohol or drug abuse and chiropractic services on a referral basis as an optional service. Rehabilitative and home health services are not considered BASIC health care services. They are described as optional health care services. The correct answer is: Rehabilitative and home health services

Which of the following is not covered under a basic medical insurance plan? Select one: a. Private nursing b. Income replacement c. Daily hospital charges for room d. Physician's visits

Basic medical insurance plans do not provide income replacement. The correct answer is: Income replacement

Max has a policy that pays part of his medical bill without any deductible. He most likely has a(n): Select one: a. Disability income b. Basic medical expense plan c. Individual medical plan d. Group medical plan

Basic medical plans are generally the only ones without a deductible. The correct answer is: Basic medical expense plan

Larry is in an accident and he loses one hand and one eye. He has an Accidental Death and Dismemberment policy for $200,000 principal sum. What should he expect for his benefit? Select one: a. $50,000 for each loss b. $100,000 total c. $400,000 since this is a double dismemberment d. $200,000 since this is the principal sum

Because a single loss of limb is paid at 50% of the principal sum, a double dismemberment is paid at the principal sum. This is sometimes referred to as the capital sum. The correct answer is: $200,000 since this is the principal sum

Joan was robbing a bank when she was severely injured in a car accident as she tried to make her escape. Joan can expect her health insurance policy to: Select one: a. Pay normal benefits b. Pay 50% of normal benefits due to her occupation c. Pay nothing since Joan was engaged in an illegal occupation d. Report this to local law enforcement for prosecution

Benefits are denied if the insured is engaged in an illegal occupation or in the act of committing a felony. The correct answer is: Pay nothing since Joan was engaged in an illegal occupation

COBRA is intended to accomplish which of the following in regard to a group health policy? Select one: a. Terminate coverage at the time of resignation or other separation from employment b. Protect employees and their dependents from immediately losing health insurance under the group plan in the event of a separation by a listed number of events c. Totally eliminate the need for a conversion plan d. Allow the employer to select exactly who may be covered under the company's group plan

COBRA allows individual and dependents to continue their group health coverage for a qualifying event up to 18 months. Dependents can be covered up to 36 months, depending on the qualifying event. The correct answer is: Protect employees and their dependents from immediately losing health insurance under the group plan in the event of a separation by a listed number of events

Fred has purchased a cancellable policy. He should understand that: Select one: a. He can keep the policy as long as he makes required premiums. b. The policy may be cancelled by the insured only on the anniversary date. c. The insurance company may cancel the policy at any time with proper notice and refund of all unearned premium. d. The insured can cancel for any reason.

Cancellable polices allow the insurer to cancel the policy at any time provided the insurer returns all unearned premium. The correct answer is: The insurance company may cancel the policy at any time with proper notice and refund of all unearned premium.

All of the following are required provisions in a health policy, EXCEPT: Select one: a. Grace period b. Notice of claim c. Entire contract d. Change of occupation

Change of occupation is an optional provision. This provision is in place to protect the company, not the policyholder. The correct answer is: Change of occupation

Sam Johnson is looking at possible methods to classify his employees under his group insurance program. He may choose all of the following, EXCEPT: Select one: a. Method of compensation b. Job classification c. Length of service d. Age bands

Classifying by age is discriminatory. The correct answer is: Age bands

Co-insurance is designed to control which of the following situations? Select one: a. Make deductibles higher b. Allow the insurance company to charge higher premiums c. Raise premiums more frequently d. Make the insured responsible for some of the charges to hold down claims payments

Co-insurance will make the insured responsible for some of the charges to hold down claims payments. Medical economics tell us that an individual will use fewer services when he/she is responsible for part of the payment. The correct answer is: Make the insured responsible for some of the charges to hold down claims payments

All of the following provisions are mandatory in health policies, EXCEPT: Select one: a. Coinsurance provision b. Grace period c. Payment of claims provision d. Reinstatement provision

Coinsurance is not a mandatory provision. The correct answer is: Coinsurance provision

The insured and the insurance company are each responsible for a percentage of a medical claim. This feature is called a: Select one: a. Deductible b. Stop loss c. Copayment d. Coinsurance

Coinsurance is sharing the bill on a preset percentage. The correct answer is: Coinsurance

Coinsurance may do any of the following, EXCEPT: Select one: a. Provide insurance for multiple individuals b. Provide a cost sharing between the individual and the insurance company c. Mitigate risk d. Define which party will pay what portion of a medical bill

Coinsurance refers to the mechanics of how the policy pays benefits, not to provide insurance for multiple individuals. The correct answer is: Provide insurance for multiple individuals

Smaller employer group rates are usually determined by a preset table that deals with the demographic make up of that group of individuals. This process is known as: Select one: a. Industry rating b. Group rating c. Community rating d. Combined rating

Community rating uses data gathered on a specific geographic area's overall health insurance claims experience. This represents a large cross section. The larger the cross section of individuals, the better the data is expected to be. There is a term called creditability factor, which indicates how a given group of people will develop claims from one year to the next. The larger the group, the more accurate the prediction should be. A smaller group is not creditable, since one major claim could represent several years of premium collected. The correct answer is: Community rating

Which dental plan pays medical providers on a usual, reasonable and customary basis? Select one: a. Basic b. Prepaid c. Scheduled d. Comprehensive

Comprehensive, or nonscheduled, dental plans pay benefits on a usual, reasonable and customary basis. The correct answer is: Comprehensive

All of the following are true about health insurance deductibles, EXCEPT: Select one: a. Higher deductibles limit smaller claims b. Higher deductibles tend to lower premiums c. Deductibles continue to increase as the cost of healthcare services increase d. Deductibles vary on an employer group plan depending on the risk of the individual employee

Deductibles for group plans are set based on the risk of the entire group or individual classes of employees. Individual deductibles based on each individual's risk would be unfair discrimination. The correct answer is: Deductibles vary on an employer group plan depending on the risk of the individual employee

An individual disability will be characterized in all of the following ways, EXCEPT: Select one: a. The benefit is a stated dollar amount based on a percentage of income per month. b. The premium is established by the insured's occupation and health status. c. The benefit may be paid annually. d. The company may be able to increase premiums.

Disability benefits are required to be paid no less than monthly. When a person is underwritten for an individual disability policy, his/her occupation and the general health status will determine the rate and benefit available. Group policies do not usually require individual underwriting. Depending on the type of renewal provision, the insurance company may have the right to increase premiums on an entire class of insured. The correct answer is: The benefit may be paid annually.

Which of the following policies will not reimburse for specified medical expenses? Select one: a. Major medical policies b. Daily hospital indemnity c. Disability income d. HMO plans

Disability pays in the event of a qualifying disability, not a specific illness or accident. The disability may be caused by sickness or accident, but the insured must also meet the qualification for disability benefits. The correct answer is: Disability income

A disability policy can be provided on a noncancellable and guaranteed renewable basis because: Select one: a. The benefits are fixed and will not increase at a later date. b. There is a specific stop loss in the contract. c. A longer waiting period applies. d. There is a decreasing maximum annual benefit.

Disability plans do not have a stop loss and the waiting period does not affect potential benefits once it is satisfied. The correct answer is: The benefits are fixed and will not increase at a later date.

Health insurance may be sold on a participating or a non-participating basis. Which of the following is true about participating policies? Select one: a. Dividend amounts are guaranteed b. Dividends will always be the same as the projected schedule c. The insured has a choice of whether his policy will be participating or not d. Dividends are paid year to year and the amount of the payment is not guaranteed

Dividends are never guaranteed and projected dividends are merely an estimate. The correct answer is: Dividends are paid year to year and the amount of the payment is not guaranteed

The free look period for an insurance policy begins: Select one: a. When the company issues the policy b. When the underwriting company approves the risk c. When the agent delivers the policy to the insured d. When the first premium is paid

Each insurance policy must provide notice of a free look period beginning from the date of delivery to the policyowner. The correct answer is: When the agent delivers the policy to the insured

Martha decides she does not want the new policy she purchased. She is within her free look period, so she returns the policy. She should receive which of the following? Select one: a. Full refund of all premiums paid b. Full refund less an administrative charge for the paperwork c. Full refund less the basic cost of insurance for the period Martha held the policy d. Full refund less a pro-rata charge for the agent commission

Each insurance policy must provide notice that during the free look period, from the date of delivery to the policyowner, such policy may be returned for cancellation to the insurer, the insurer will refund all premiums paid, including any policy fees or other charges, and the policy will be deemed void, as if no policy had been issued. The correct answer is: Full refund of all premiums paid

COBRA eligibility may be triggered as a result of any of the following events, EXCEPT: Select one: a. An employee loses eligibility for group coverage as a result of reduction in hours b. Termination of employment c. An employee dies d. An employee is promoted

Eligibility of COBRA benefits is triggered by the following occurrences: the employee dies, is terminated, or loses eligibility for group coverage due to reduction in hours. A promotion is not one of the triggering events. The correct answer is: An employee is promoted

Major medical plans usually allow benefits for all of the following, EXCEPT: Select one: a. Non-occupational accidents b. Diagnostic testing c. Surgical procedures d. Experimental drugs and treatment

Experimental drugs are not covered under a major medical plan. The correct answer is: Experimental drugs and treatment

A hospital income plan pays benefits based on which of the following? Select one: a. Aggregate stop loss b. Reimbursement schedule c. Co-insurance d. Flat payment per day in the hospital

Flat payment per day in the hospital

A group plan will generally accept all employees without underwriting questions. What are the circumstances where the insurance company can accept or reject a member under a group plan? Select one: a. The group has had excessive claims b. An employee has declined coverage when eligible and later elects to join the group c. If an employee has exceeded his stop loss too many times d. This is never allowed under any circumstances.

Group plans have an annual open enrollment period and anything outside of this requires company approval. Company approval may be conditioned upon showing proof of insurability. The majority of the time an employee will wait until the next open enrollment period to join the group plan. The correct answer is: An employee has declined coverage when eligible and later elects to join the group

When comparing individual disability income policies with group disability income policies, group policies are generally: Select one: a. More costly and more restrictive b. More restrictive in terms of what constitutes a disability c. Made to have longer elimination periods d. Less costly and have more liberal benefits

Group plans usually have higher income limits and lower premiums. The correct answer is: Less costly and have more liberal benefits

All of the factors below are factors in underwriting a group health insurance plan, EXCEPT: Select one: a. Stability of the group b. Type of industry c. Individuals with certain health conditions d. Community or experience rating

Groups are underwritten as a whole, not based on individuals within the group. The correct answer is: Individuals with certain health conditions

Health insurance will provide benefits for all the following, EXCEPT: Select one: a. Living too long b. Surgery c. Illness d. Heart attack

Health insurance protects against accidents and sickness, while life insurance protects against dying too soon. Living too long would be protected by an annuity contract. The correct answer is: Living too long

xAccording to the Physical Examination and Autopsy provision, who is pays the cost of examining an insured? Select one: a. Insured b. Insurer c. Beneficiary d. The state

If not prohibited by state law, an insurer may request that a physical examination or autopsy of an insured be performed at the insurer's expense while a claim is pending. The correct answer is: Insurer

Amanda noticed that the wrong date of birth was recorded on her application for insurance. Health policies have a provision that addresses this issue. If Amanda has a claim, she can expect which of the following? Select one: a. The policy will be cancelled for fraud. b. Claims will be denied until her age is corrected. c. The amount of the claim will be adjusted to reflect the correct premium and benefit. d. The insurance company will ignore this and pay as requested.

If the age of the insured has been misstated, all amounts payable under the policy will be modified to that which the premiums would have purchased at the correct age. The correct answer is: The amount of the claim will be adjusted to reflect the correct premium and benefit.

The time limit on certain defenses provision allows the insurance company to defend against which of the following? Select one: a. The time limit for the company to cancel the policy for misstatement of age or sex b. The time limit for which the insurance company may cancel the policy and refund premiums for material misrepresentation in the application c. The time an insurance company must wait to take legal action against a fraudulent claim d. The time limit the insured must wait to file legal action for non-payment of claim

If the company waits beyond the specified time, they can not bring legal action. The correct answer is: The time limit for which the insurance company may cancel the policy and refund premiums for material misrepresentation in the application

HIPAA rules on renewability apply to: Select one: a. Individual policies b. Group policies c. Both group and individual policies d. Companies can cancel at any renewal anniversary with notice.

Individual policies must be renewable under HIPAA. The premiums may be increased, but the company is not allowed to cancel a policy, except when an individual becomes eligible for Medicare or some other listed event. The correct answer is: Individual policies

How does the pre-existing condition vary from individual to group policies? Select one: a. There is no difference. b. Individual pre-existing conditions are less restrictive. c. Group plans never have pre-existing conditions. d. Individual plans are usually more restrictive than group plans.

Individual underwriting is always more restrictive than group underwriting. The correct answer is: Individual plans are usually more restrictive than group plans.

How long do COBRA benefits remain from the date employment is terminated? Select one: a. 6 months b. 12 months c. 18 months d. 24 months

Individuals may continue their group health coverage under COBRA for 18 months. Covered dependents are eligible for coverage up to 36 months if the insured's coverage is terminated due to death, divorce, the insured becomes eligible for Medicare or the dependent loses dependency status. The correct answer is: 36 months

Why do group policies include coordination of benefit (COB) provisions? Select one: a. To allow the insured to collect double when they have two insurance plans b. To limit payment to 100% of the loss and no more c. To designate which company must pay the claim d. To allow the insured to pick the policy with the best benefits

Insurance is to cover losses, not create profit opportunities. The coordination of benefits provision prevents overpayment of a claim to an insured who has duplicate coverage. The coordination of benefits does designate which company must pay a claim. The question asks why, the provision is included. The correct answer is: To limit payment to 100% of the loss and no more

Which of the following types of policies might have a guaranteed insurability clause attached? Select one: a. Major medical b. PPO c. HMO d. Disability income

Insurers can issue disability income policies that are guaranteed insurable because the benefit amount is fixed, so costs remain level. The correct answer is: Disability income

A short-term disability policy will provide short benefit periods of less than two years. In most cases, the benefit period is shorter. One common exclusion for short-term disability policies is: Select one: a. Only accidents qualify for benefits b. On the job injuries are not covered c. Benefits are generally paid weekly d. Pre-existing exclusions are not allowed

It is usual for both company sponsored and state sponsored short-term disability plans to exclude on the job injuries. Benefits are generally paid weekly; since the definition of short-term disability is that the insured will exhaust benefits or return to work. The correct answer is: On the job injuries are not covered

Jason is comparing plans for medical insurance. His employer offers two plans. One has an 80/20 coinsurance provision and the alternate plan has a 75/25 coinsurance provision. Jason should expect which of the following? Select one: a. To pay less out of pocket for the 75/25 plan b. To have a lower premium for the 75/25 plan c. To have a better stop loss with the 80/20 plan d. There will be no difference between the plans

Jason should expect to have a lower premium with the 75/25 plan, because the plan pays less coinsurance benefits. The correct answer is: To have a lower premium for the 75/25 plan

Julia purchases a disability policy that will provide $500 per month if she becomes disabled. The policy requires her to notify the insurance company if she changes occupations. When the policy was issued, Julia was a bank employee. At the time of disability, she had changed occupations to become a welder. What kind of benefit should she expect? Select one: a. A refund of premium since she had not notified the company of the change b. A lower benefit since she had changed to a more hazardous occupation c. $500 per month since that is what she paid for d. More than $500 per month since she had paid premiums for a long time

Julia has changed her job to a more hazardous occupation; therefore, the insurance company would lower the benefit amount. The correct answer is: A lower benefit since she had changed to a more hazardous occupation

The Health Insurance Coverage Continuation Act regulates which of the following? Select one: a. Large companies with exclusions in their policy b. Establishing requirements for insurers who market to small employers with 20 employees or less c. The transition of individual employees from regular group benefits to Medicare d. Members switching from an HMO plan to a regular group medical plan

Large employers are covered under COBRA, which requires that employees be allowed to continue group coverage when terminating employment. This act allows employees of small groups not covered by COBRA to continue coverage upon termination. The correct answer is: Establishing requirements for insurers who market to small employers with 20 employees or less

A large group of 2,000 employees has renewed for another year. The premiums have increased by 12% over the previous year. The new rates were most likely a result of: Select one: a. Higher than expected claims for that particular group of people b. Higher than expected claims for the insurance company's block of group insurance business c. Higher than expected claims for the entire group of insureds in that geographic area d. Higher fixed costs to administer the program

Larger groups are generally rated by the claims experience generated by that particular group. The size of a group that will determine experience will vary from company to company, but 1,000 is usually the size where all companies use experience rating to determine rates. Companies may use a mixture of community rating and experience rating on groups between 100 and 999. The correct answer is: Higher than expected claims for that particular group of people

Long-term disability has a benefit that will provide income payments for longer time periods. The maximum duration of a long-term disability payment is usually: Select one: a. 10 years only b. To age 65 in all cases c. Age 65 or a specified period of time if the insured is over a specified age when disabled d. Coinciding with Social Security

Long-term disability plans can be designed to provide specific benefit periods, such as 5 years maximum. The maximum benefit for a group policy is generally age 65 or a specific number of years if the insured is disabled after a specified age. As an example, the insured may be age 63 at disability and the plan may allow a maximum of 4 years of benefits, which would pay until age 67. The correct answer is: Age 65 or a specified period of time if the insured is over a specified age when disabled

An employee's eligibility for group enrollment may be determined by all of the following, EXCEPT: Select one: a. Number of hours worked weekly or monthly b. Job classification c. Gender d. Time in service with the employer

Most group contracts define an eligible employee as one that works a minimum number of hours per week or month, such as 30 hours per week. That number may vary by employer and group size. Certain job classifications may be excluded if the process is non-discriminatory. An example might be workers who are based outside the USA that are covered by a local government plan. A probationary period may also be applied. No one can be excluded based on their sex, period. The correct answer is: Gender

Karl has an individual health insurance policy with Wildlife Mutual. Wildlife also sells group contracts and his employer decides to purchase group coverage for its employees through that company. Karl enrolls in the group, but he also continues to pay premiums on his individual plan. When Karl has a claim, what can he expect? Select one: a. Karl will receive full benefits from both contracts, since there is no coordination of benefits on individual plans. b. Karl's group plan will be primary and the individual plan will be secondary. c. Karl's individual policy will be primary and the group plan will be secondary. d. Wildlife Mutual will be able to cancel Karl's individual policy under these circumstances.

Most, if not all, state laws do not permit a group contract to coordinate with an individual contract. The theory is that an individual is paying for the benefit directly and should not be penalized. As you may recall, HIPAA prohibits the cancellation of individual health insurance contracts. The correct answer is: Karl will receive full benefits from both contracts, since there is no coordination of benefits on individual plans.

The legal action provision states that a policyholder must wait for how long after presenting proof of loss before bringing legal action against the insurer? Select one: a. 60 days b. 120 days c. 30 days d. 45 days

No legal action may be brought to recover on the policy until 60 days after written proof of loss is provided to the insurer. Remember, it is 60 days after proof of loss has been submitted, not 60 days after the loss occurred. The correct answer is: 60 days

All of the following are true concerning Workers' Compensation laws, EXCEPT: Select one: a. All states require employers to have Workers' Compensation Insurance. b. Workers' Compensation provides benefits for employees who have been injured, become ill or died as a result of workplace issues. c. Many states have pools from which employers can purchase coverage. d. Premiums for Workers' Compensation vary by industry classification and actual employer experience.

Not all states require the employer to have Workers' Compensation insurance, but they all have laws concerning Workers' Compensation. Not having Workers' Compensation insurance does not relieve the employer of liability for on the job injuries. The correct answer is: All states require employers to have Workers' Compensation Insurance.

Marjorie has notified the insurance company of a claim. How long does the insurance company have to furnish a claim form? Select one: a. 10 days b. 15 days c. 30 days d. 45 days

Once she has notified the company, they must give her a claim form within 15 days. The correct answer is: 15 days

Samantha has not paid her premium on her health insurance policy. It has not lapsed, but the premium is due. On her pending claim, Samantha can expect which of the following? Select one: a. The claim will not be paid until premium is current. b. The insurance company will pay the claim minus the premium due. c. The insurance company will wait until the policy lapses and cancel the policy. d. The insurance company will use the time limit for certain defenses clause

Samantha can expect the insurance company to deduct any premium due from the claim payment. The correct answer is: The insurance company will pay the claim minus the premium due.

Hal is covered by a short-term disability through his employer. These plans may be designed with any of the following features, EXCEPT: Select one: a. Benefits may be paid as a percent of income. b. Benefits may be paid as a flat indemnity amount. c. Benefits will coordinate with Workers' Compensation. d. Both accidents and sicknesses will be covered.

Short-term disability usually does not cover on the job losses. It does not coordinate with Workers' Compensation, since it is not a covered loss. Benefits can be stated as a flat amount, such as $300 weekly, or as a percent of income, such as 66 2/3% of base salary. It is not common to include overtime pay in a benefit calculation, but that can be written into the contract. Individual plans are almost always written on a flat amount basis. The correct answer is: Benefits will coordinate with Workers' Compensation.

All of the following may be exclusions from coverage in a health policy, EXCEPT: Select one: a. Injury while committing a felony b. Sickness while traveling abroad c. Treatment for drug and alcohol abuse d. Self-inflicted injury

Sickness while traveling abroad is not a policy exclusion. The exception to this is Medicare, which does not cover treatment out of the country. The correct answer is: Sickness while traveling abroad

Carl is unable to work due to a medical condition. He has been confined to his home for four months and wants to begin the process for filing a disability claim with Social Security. All of the following are true, EXCEPT: Select one: a. He should wait until he has completed 5 months of waiting. b. He should be eligible for Medicare before he applies. c. His disability should prevent him from working at all. d. He should expect to be disabled for 12 months or more. RHD5016

Social Security disability benefits are paid after a five-month waiting period. The disability must be total and expect to last twelve months. Being eligible for Medicare is not one of the criteria. In fact, Social Security disability benefits become retirement benefits when a person reaches age 65. The correct answer is: He should be eligible for Medicare before he applies.

All of the following government benefit programs will provide medical benefits, EXCEPT: Select one: a. OASDI b. Social Security Disability c. Medicare d. Medicaid

Social Security disability only pays income. The correct answer is: Social Security Disability

Edward has been treated for kidney stones in the past. He is applying for disability benefits. His agent should explain to him that he might have which of the following added to his policy: Select one: a. A longer elimination period for benefits b. A waiting or probationary period before disabilities related to his pre-existing condition are covered c. No recurrent disability benefit d. None of the above

The agent should explain that the policy will have a probationary period. The purpose of the probationary period is to prevent the insurer from buying a claim. The correct answer is: A waiting or probationary period before disabilities related to his pre-existing condition are covered

Harry has been disabled for 2.5 years. He has been on his employer group plan through COBRA most of that time, but his coverage expired due to time limits. He is not eligible for Medicare Part A and Part B. What is the status of his employer plan? Select one: a. His employer plan has expired and it is not an issue in this case. b. His employer is required to continue his coverage for at least 5 years. c. Medicare will become primary to his employer's plan. d. Harry will automatically qualify for Medicaid due to the length of his disability.

The answer is in the question. COBRA has expired due to time limits. The employer's plan is no longer part of the equation. Unless there is a specific state law or permissible contract language in the group contract, the employer is not required to provide coverage beyond COBRA. Medicaid is a needs tested program and it is only available for individuals who are below the poverty line or meet other financial requirements. The correct answer is: His employer plan has expired and it is not an issue in this case.

A policyholder is injured while robbing a home. He has to be hospitalized as a result of his injury. When the insurance company discovers that a felony is involved with the claim, the insurance company may do which of the following? Select one: a. Cancel the policy for fraud b. Deny the claim based on no liability c. Reduce the claim payment by 50% d. Increase the premium immediately

The insurance company may deny the claim, since injury during the act of committing a felony is excluded. The correct answer is: Deny the claim based on no liability

What is the time limit for an insured to notify the insurance company of a loss? Select one: a. 20 days b. 15 days c. 30 days d. 90 days

The insured must submit a notice of loss to the insurer within 20 days. The correct answer is: 20 days

A pre-existing condition clause protects the insurance company against: Select one: a. Fraud b. Misrepresentation c. Adverse selection d. Over insurance

The pre-existing conditions clause protects the insurance company from adverse selection. The correct answer is: Adverse selection

Who is the "Other Insurance in this Insurer" provision supposed to protect? Select one: a. Insured b. Insurer c. Beneficiary d. The state

The purpose of the "Other Insurance in this Insurer" provision is to prevent an insured from making a profit from insurance claims, thereby protecting the insurer. The correct answer is: Insurer

What is the purpose of a Stop Loss feature in a Major Medical policy? Select one: a. To stop the insurer from raising premiums b. To cap the insurer's liability c. To cap the the insured's out of pocket expenses d. To cap the benefits paid by the policy

The purpose of the Stop Loss feature in a major medical policy is to cap the the insured's out of pocket expenses The correct answer is: To cap the the insured's out of pocket expenses

The insurance company that Jonathan works for has classified Jonathan as totally disabled. Under the waiver of premium, how long is the waiting period? Select one: a. 30 days b. 60 days c. 1-3 months d. 3-6 months

The waiting period before the insurance company will waive the premium is 3-6 months. The correct answer is: 3-6 months

Your disability policy states that you will qualify for benefits as a result of your inability to perform the duties of any job that you are qualified by prior training, education, or experience. It further states that you must lose income as a result of this circumstance. You most likely have: Select one: a. An income replacement policy b. An indemnity policy c. A specified risk policy d. A qualified health plan

This is an example of the question providing more information than you need to arrive at a correct answer. Disability plans are either indemnity plans (pay a specific benefit based on the loss) or income replacement plans where the loss of income due to a sickness or an accident is what triggers the benefit. The key here is the insured lost income and the income replacement policy replaces lost income up to a specified limit. \The correct answer is: An income replacement policy

Bernie is disabled and wants to apply for disability under Social Security. In order to qualify, he must meet all of the following requirements, EXCEPT: Select one: a. Total and permanent disability and he must not be able to work b. He must have earned the necessary number of quarters of coverage. c. There is a 6 month waiting period. d. The disability is expected to last 12 months or more, or result in death.

To qualify for Social Security disability, Bernie must have total and permanent disability and not be able to work. He must also earn the necessary number of quarters of coverage, and the disability must be expected to last 12 months or more. The waiting period for Social Security disability benefits is 5 months, or 150 days. The correct answer is: There is a 6 month waiting period.

To be eligible to participate in a group medical plan, an employee: Select one: a. Must be full time b. Must have served any required probationary period c. Should enroll during period of eligibility d. All of the above

Typically, in order to be eligible for group insurance coverage, an employee must be working full time, have satisfied the probationary period, and enroll during the open enrollment period. The correct answer is: All of the above

The longest pre-existing period for conditions that occurred prior to employment under HIPAA is: Select one: a. 6 months b. 12 months c. 18 months d. 24 months

Under HIPAA, a group plan may not exclude conditions that have been diagnosed or treated prior to employment, unless it is within 12 months before hire. That can be modified if the employee has been covered by another group plan during that time. Service under another group plan is referred to as creditable coverage. The correct answer is: 12 months

Jim applies for reinstatement after his health policy lapses. He submits all requirements, including the premiums. He hears nothing further from the company. This policy is in effect: Select one: a. When 30 days have passed without notification b. When his agent binds the contract c. Automatically in 45 days if the company takes no action d. Only when the company notifies him he has coverage

Unless the company takes action to the contrary, his coverage is deemed to be effective in 45 days. The correct answer is: Automatically in 45 days if the company takes no action

Both spouses are covered by their employer group plans for full family coverage. Based on usual guidelines, how is the order of coverage determined? Select one: a. The father's coverage is always primary. b. The first qualification is which parent has been covered longest. c. Primary coverage is usually determined by which parent's birthday comes earliest in the year. d. The couple may choose the plan with the higher benefit schedule.

Unless there is a legal separation and a court order, the spouse's plan whose birthday falls earliest in the year is primary. If the spouses have the same birthday month, the spouse with the longest time under the plan is primary. The correct answer is: Primary coverage is usually determined by which parent's birthday comes earliest in the year.

Betty has enrolled in an HMO through her employer. The booklet she receives indicates that she may choose any doctor or specialist without a referral, but approved HMO doctors will provide service at lower or no out-of-pocket cost. Betty is enrolled in: Select one: a. Open panel HMO b. Independent practice HMO c. Staff model HMO d. Closed panel HMO

When there is a free choice of doctors by the member, the plan is known as an open panel HMO. There are usually large incentives for using approved HMO doctors, but the member has more flexibility in choosing physicians. The correct answer is: Open panel HMO

An example of presumptive disability might be any of the following, EXCEPT: Select one: a. Total blindness b. Complete loss of hearing c. Amputation of a leg at the hip d. Severance of a hand

While the definition of a presumptive disability may vary somewhat depending on the specific policy, all of those listed above except the severance of a hand are usually on the short list of presumptive disabilities. These conditions will never improve, and they will most likely prevent an individual from engaging in any occupation after the loss. It would be futile and punitive for an insurance company to inquire about someone regaining their sight or hearing if they had a total loss. The correct answer is: Severance of a hand

Max is enrolled through his employer's group plan. While he has a generous reimbursement schedule for benefits, all of his medical care must be focused through a designated physician whom he may choose. The designated physician must make all referrals, but there is no restriction on the network. Max most likely has: Select one: a. A POS plan b. A PPO plan c. A closed panel HMO d. An open panel HMO

A POS plan requires a primary care physician to coordinate all treatment for participants. The POS model may be within an HMO, but that is generally referred to a primary care physician. The correct answer is: A POS plan

A PPO network may have a contract that involves any of the following, EXCEPT: Select one: a. The contracting network b. Physicians, hospitals and other providers c. The participating employee d. Insurance companies

A PPO network exists for the purpose of contracting with doctors, hospitals and other provider groups, such as physical therapists. The contract is usually between the network and the provider; however, insurance companies, TPA's and on rare occasions, large employers who have their individual claims payment units, may also be contracting parties. There is no case when the individual employee will be part of a PPO contract. The correct answer is: The participating employee

A PPO plan will usually have all the following features, EXCEPT: Select one: a. Higher reimbursement for in-network providers b. Office visit co-pays c. Mandatory referrals to specialists d. Deductibles and co-insurance for non-network providers

A PPO plan will usually allow open access to all providers under contract in the approved network. The mandatory referral system is usually a characteristic of an HMO or a POS plan. The correct answer is: Mandatory referrals to specialists

Jennifer's employer offers her the opportunity to choose from a variety of group benefits. She can choose the plans that best meet her needs while declining to participate in components of the plan. The type of plan she is being offered is called which of the following? Select one: a. HMO b. PPO c. Free lunch program d. Cafeteria plan

A cafeteria plan allows the participants to choose from a menu of plans that will allow them to customize the benefits to their needs. The correct answer is: Cafeteria plan

George has enrolled in his company's group insurance plan. As proof of his participation, George will receive which of the following? Select one: a. A certificate of coverage b. A copy of the master contract outlining benefits c. An individual insurance contract that he can keep if he leaves the group d. Claim forms

A certificate of coverage is what is issued for a group policy. A health insurance policy may also include a summary of benefits and directions on how to file claims, etc. The correct answer is: A certificate of coverage

Horace owns a health insurance policy that will not pay benefits unless he is confined to the hospital. This type of contract is known as a: Select one: a. Non-cancellable contract b. Unilateral contract c. Contract of adhesion d. Conditional contract

A conditional contract will not provide benefits or payments until specific conditions are met by the insured. In this case, Horace will have to be hospitalized to qualify for benefits. If he is not hospitalized, there are no benefits and no refund of premium. The correct answer is: Conditional contract

A person that is disabled under Social Security is eligible for Medicare benefits after how long? Select one: a. 5 months (150 days) b. 24 months (720 days) c. 29 months (870 days) d. Varies, determined by a Medicare formula

A disabled individual is eligible to be enrolled in Medicare Part A and Part B after being on Social Security benefits for 2 years (24 months). Since there is a 5-month elimination period, the total wait for Medicare benefits will be 29 months before benefits become effective on Medicare. There is not a formula to determine eligibility for Medicare benefits. The correct answer is: 29 months (870 days)

A group health insurance plan may include all of the following benefits, EXCEPT: Select one: a. Medical expense b. Disability income c. Retirement pension d. Accidental death and dismemberment

A group health insurance plan may provide medical expense, disability income, and accidental death and dismemberment benefits. A pension plan is a completely different benefit. The correct answer is: Retirement pension

An association seeking group insurance must meet all of the following requirements, EXCEPT: Select one: a. Must be formed for the purpose of buying insurance b. Meet minimum number of participants c. Must be made up of employees and employers d. Must meet criteria of "natural group"

A group must be a "natural group", meaning it cannot be formed for the specific purpose of buying insurance. The correct answer is: Must be formed for the purpose of buying insurance

Regina is insured under a guaranteed renewable health contract. The insurance company may increase rates: Select one: a. When it has approval from the insurance commissioner b. When specific individuals have excessive claims c. On any anniversary date for any reason d. Only when an entire class of insureds has a premium increase

A premium increase may only be implemented when an entire class of insureds has an increase. The correct answer is: Only when an entire class of insureds has a premium increase

A disability plan that pays a benefit based on loss of earnings is considered which of the following? Select one: a. A non-cancellable plan b. A residual disability plan c. A rehabilitative plan d. A partial disability plan

A residual disability plan is a form that is written that relies more on loss of earning than inability to perform duties. The correct answer is: A residual disability plan

Harold is enrolled in an HMO program through his employer. He notes in his benefit booklet that he must select a primary care physician for his medical treatment and consultation. There are specialists listed in the panel of doctors, but none are listed as primary care physicians. How will Harold be able to access these specialists? Select one: a. He can choose to make an appointment with any physician on the list. b. He must consult his primary care physician and receive a referral to a specialist based on his primary doctor's evaluation. c. He may only see a specialist with permission from the plan sponsor. d. Harold may only see a specialist in the event of an emergency.

An HMO is usually set up so there is a primary physician assigned or selected by the member. The member is required to consult with the primary physician and obtain a referral to a specialist in the event his condition warrants. There may be exceptions to this rule; however, seeking a specialist without a referral might cause a benefit reduction or denial. The correct answer is: He must consult his primary care physician and receive a referral to a specialist based on his primary doctor's evaluation.

An HMO will generally cover all of the following services from a hospital, EXCEPT: Select one: a. Inpatient care, including ancillary services b. Outpatient surgery c. X-ray and laboratory d. Outpatient prescription drugs

An HMO may or may not provide a prescription plan, and the cost may vary widely for this benefit. While drugs will be provided as part of a hospital stay, the outpatient benefit is generally not the same as the inpatient benefit. All other standard hospital services are generally available just like any other health plan. The correct answer is: Outpatient prescription drugs

An HMO hospital benefit will usually provide all of the following services, EXCEPT: Select one: a. Specified mental health conditions b. Hospital room and board c. Eyeglasses and hearing aids d. X-rays and laboratory testing

An HMO plan will provide a comprehensive schedule in their approved facilities. Dental work, eyeglasses and hearing aids are generally not covered by an HMO plan. Benefits for durable equipment may also be limited by a dollar limit or the kind of device requested. The correct answer is: Eyeglasses and hearing aids

Carl has enrolled in an HMO plan through his employer. The price is very low and attractive. Carl reads that he must use the doctor listed in his directory or lose benefits. This type of HMO is known as a(n): Select one: a. Open panel HMO b. Staff model HMO c. Closed panel HMO d. Modified HMO

An HMO that restricts the doctor choice to their approved doctors is known as a closed panel HMO. This is a cost control measure, since the fees have been pre-negotiated by the HMO and the providers. The HMO feels it can control costs more efficiently with this method. The correct answer is: Closed panel HMO

An HMO plan is characterized by all of the following, EXCEPT: Select one: a. Community rating b. Periodic wellness testing c. Annual open enrollments d. Free choices of any provider

An HMO usually restricts the choice of physicians and other providers to those who have contracts or are employed directly with the HMO. In the event that a non-contracted provider is used, there may be no benefits or lower benefits than those allowed through contracted or employed providers. The correct answer is: Free choices of any provider

Which type of policy generally requires an elimination period to qualify for benefits? Select one: a. A dread disease policy b. A major medical plan c. A dental plan d. A disability plan

An elimination period is a waiting period for benefits. While it is not common, you may see this referred to as a time deductible. To qualify for benefits for a disability plan, an insured is required to serve an elimination period before benefits will begin. For example, benefits begin after the insured has been disabled for 90 days. The correct answer is: A disability plan

When an employee has enrolled in a group health plan, he/she will receive what document? Select one: a. An abridged copy of the master contract b. A certificate of coverage c. Notice of coverage from the insurance company d. A letter from the employer acknowledging enrollment

An employee's record of insurance is called a certificate of coverage. The correct answer is: A certificate of coverage

Ajax Manufacturing has a self-funded group health plan and believes it can lower administrative costs from those charged by an insurance company for processing claims. Which type of organization should Ajax use to process claims? Select one: a. Third Party Administrator (TPA) b. Health Maintenance Organization (HMO) c. Preferred Provider Organization (PPO) d. Administrative Services Only (ASO)

An employer can contract out the claims processing to a third party administrator (TPA ) that is not an insurer. An employer may self-fund a group plan through an administrative services only (ASO) contract, where the employer provides the funding and the insurance company handles all claims processing. The correct answer is: Third Party Administrator (TPA)

Final Rest Mutual is an insurance company that processes and pays claims for ABC Company's self-funded health plan. This arrangement is known as: Select one: a. Third Party Administration (TPA) b. Cost plus benefits (CPB) c. Exclusive Provider Organization (EPO) d. Administrative Services Only (ASO)

An employer may self-fund a group plan through an administrative services only (ASO) contract, where the employer provides the funding and the insurer handles all claims processing. An employer can also contract out the claims processing to a third party administrator (TPA). The correct answer is: Administrative Services Only (ASO)

Leon has decided to self-insure his medical plan through an insurance company. This will pay his claims and administer the other features of the plan for a set fee plus claims paid. This arrangement is known as which of the following? Select one: a. Third Party Administration (TPA) b. Administrative Services Only (ASO) c. Health Maintenance Organization (HMO) d. Preferred Provider Organization (PPO)

An employer may self-fund a group plan through an administrative services only (ASO) contract, where the employer provides the funding and the insurer handles all claims processing. An employer can also contract out the claims processing to a third party administrator (TPA). The correct answer is: Administrative Services Only (ASO)

In addition to the basic health services, an HMO may also offer which of the following services? Select one: a. Health education programs (quit smoking, prepare for childbirth, etc.) b. Spiritual counseling c. Naturopathic medicine d. Dental care

Another service of an HMO is the continuing education programs to promote better health choices. The courses vary, but quit smoking classes, managing diabetes classes and preparing for childbirth are among the most common. The correct answer is: Health education programs (quit smoking, prepare for childbirth, etc.)

An HMO will offer basic services to all members. All of the following services are offered as a basic service, EXCEPT: Select one: a. Doctor services b. Preventive and routine care, like annual physical and immunizations c. Rehabilitation therapy d. Durable equipment

Durable equipment is not listed as a basic service. Coverage and benefits for this item will vary from HMO plan to HMO plan. There may be annual limits and restriction on durable equipment. The correct answer is: Durable equipment

The process by which an employee may enroll in an employer group insurance plan without regard or restriction for any pre-existing condition is referred to as: Select one: a. Automatic enrollment b. Conditional enrollment c. Prospective enrollment d. Guaranteed Issue

Guarantee issue is the process by which an individual is accepted into a group insurance plan without restriction as to coverage or pre-existing conditions. This must be provided on a complete non-discriminatory basis. The correct answer is: Guaranteed Issue

Under HIPAA an insurance company may look back how far on pre-existing conditions for a late enrollee? Select one: a. 6 months b. 12 months c. 18 months d. 24 months

HIPAA allows the insurance company to look back 18 months for pre-existing conditions for late enrollments. For new hires, it is 12 months. The correct answer is: 18 months

While the definition of a pre-existing condition may vary to some degree, a pre-existing condition is one that: Select one: a. The employee received treatment for or was diagnosed with prior to joining the group 12 months before employment b. Commenced at birth c. Manifested itself prior to the open enrollment d. Existed, but the insured did not know about it

HIPAA uses the criteria that a company may not look back more than 12 months to determine pre-existing conditions. States may have more restrictive laws concerning this, but 12 months is the maximum time allowed on new enrollments. The correct answer is: The employee received treatment for or was diagnosed with prior to joining the group 12 months before employment

A Health Maintenance Organization (HMO) is known for stressing which type of medical care? Select one: a. Preventative and wellness care to keep its members well b. Diagnostic medicine after a member develops health conditions c. Limiting the number of visits a patient may use on a calendar-year basis d. Providing surgical options after internal medicine has run its course

HMOs are designed to encourage their members to participate in testing and wellness programs to promote good health. The theory is that if the patient does not become ill, the long-term cost of medical care will be lower. The correct answer is: Preventative and wellness care to keep its members well

HIPAA recognizes time served under group plans to determine pre-existing condition restrictions. If a person is not covered, what is the maximum period they are allowed to go without coverage before the HIPAA requirements become void? Select one: a. 6 months b. 5 months c. 90 days d. 63 days

If a person is without creditable group coverage, including COBRA options, for 63 days the clock for creditable coverage starts again. With a 63 day lapse, the insurance company may apply pre-existing condition clauses without recognizing prior coverage. The correct answer is: 63 days

In a non-contributory plan: Select one: a. The employer may choose who they want to cover b. The employer may exclude hazardous occupations c. The employee must pay part of the cost d. 100% of the employees must be covered

In a non-contributory plan, 100% of the employees must be covered. The correct answer is: 100% of the employees must be covered

To qualify as an association group benefit program, an organization must: Select one: a. Be formed for the purpose of setting up an insurance plan b. Have no common business affinity c. Exist for at least two years d. Have at least 1,000 members

In order to qualify for group insurance plans, an association must have been formed for a purpose other than to obtain insurance, existed for at least two years, have a constitution and by-laws, hold regular meetings at least annually and have at least 100 members. The correct answer is: Exist for at least two years

Is an insurance company required to return unearned premiums on a policy cancellation? a. Only if the insurance company initiates cancellation b. Only if the policy has a provision allowing this action c. In all cases where the insured has paid for coverage beyond the cancellation date d. Never

In the event of cancellation, the insurer must return the unearned portion of any premium paid. An insurance company is not allowed to charge for coverage it did not provide. The correct answer is: In all cases where the insured has paid for coverage beyond the cancellation date

Group policies typically contain a coordination of benefits (COB) provision. This provision is in the contract to: Select one: a. Prevent underpayment of claims b. Eliminate arbitration on disputed claims c. Prevent overpayment of a claim when more than one insurance policy is involved d. Provide extra income for the participant

In the event the insured is covered by more than one policy, the COB provision defines the method for determining which insurer is the primary insurer and which one is the secondary insurer. The COB provision is also in place to prevent the insured from making a profit from a claim. The correct answer is: Prevent overpayment of a claim when more than one insurance policy is involved

Maternity coverage covers the expenses for child delivery. Which of the following statements is correct regarding maternity coverage? Select one: a. Individual policies may not offer this benefit or have limitations. b. Group policies treat maternity like any other sickness or accident. c. The employer may make maternity coverage optional. d. The employees can pay an extra premium for this benefit.

Law requires that group policies treat maternity care as if it were any other illness or accident. The correct answer is: Group policies treat maternity like any other sickness or accident.

To protect against a disabled person receiving more income by being disabled than they can earn by working, most group disability plans will offset policy benefits with any of the following benefits, EXCEPT: Select one: a. Wage continuation plans b. Medicaid c. Social Security d. Workers' Compensation

Medicaid only provides medical expense benefits and not income replacement. All the other plans provide some form of wage benefit, and coordination of benefits is necessary to prevent duplicating benefits. The correct answer is: Medicaid

Cheryl has filed a claim for a hospital stay with her insurance company. She has complied with all time lines, but the insurance company has been unresponsive to date. Her health care providers are calling her for payment and threatening to turn her account over to a collection agency. How long does Cheryl have to wait until she can take legal action against the insurance company? Select one: a. 20 days b. 30 days c. 60 days d. 90 days

No legal action may be brought to recover on the policy until 60 days after written proof of loss is provided to the insurer. The correct answer is: 60 days

Both HMO and PPO plans may allow out-of-network access. If a member elects to use out-of-network providers, he/she may expect any of the following results, EXCEPT: Select one: a. Lower benefits reimbursement b. Lower quality of care c. More out-of-pocket expense d. More individual paperwork

Some HMO plans and most PPO plans will allow the members to choose out-of-network providers. Except in the case of designated emergencies, the member will be subject to a lower reimbursement schedule, more out-of-pocket expense and may be required to pay for expenses up front and submit a claim without the help of the provider. The choice of a provider, in-network or out-of-network, does not automatically result in a lower quality of care. The correct answer is: Lower quality of care

Barney has a surgical expense policy listed as a "$1,000 Basic Surgical Expense Policy". This means which of the following? Select one: a. Any surgery will pay $1,000. b. The plan will pay $1,000, only if the surgeon is board certified. c. Only the most complex surgery will be reimbursed at $1,000 and other procedures by the dollar value of procedure. d. Only specific surgeries listed in the policy will be covered.

The basic surgical expense plan contains a list of covered surgical procedures and the dollar limit for each procedure. This list of surgical procedures is referred to as a schedule. The most complex procedures are assigned the highest dollar benefit, while the least complex have the lowest. The correct answer is: Only the most complex surgery will be reimbursed at $1,000 and other procedures by the dollar value of procedure.

Matilda is starting a new job on Monday. She has been covered under her prior employer's group plan for 6 months, but she has been treated for a stomach disorder just prior to joining her new employer. When will she have full coverage under the new plan if they do not offer guaranteed issue? Select one: a. Immediately, since the new company may not look back on pre-existing conditions b. After six months, since Matilda will have 12 months of credible coverage c. She may be declined at the company's option d. She will be issued a plan with exclusions for stomach disorders

The clock starts when Matilda has her first period of creditable coverage. As long as there has not been a lapse of 63 days or more, the 12 months maximum will apply, counting the 6 months she was covered prior to joining the new employer. The correct answer is: After six months, since Matilda will have 12 months of credible coverage

Group insurance plans typically have a provision called coordination of benefits. This occurs when an insured is covered by more than one group plan. Why is this provision in the contract? Select one: a. It provides the contract with a formal method to deny claims. b. It allows the insured to choose which contract will pay the claim. c. It prevents over insurance d. It prevents payment for excluded conditions for both programs equally.

The coordination of benefits provision allows the insured to be reimbursed up to 100% of a claim, but it prevents the insured from "making money" from being sick or hurt. Insurance is designed to place the insured in as close to the same position as possible as he was prior to the claim. The correct answer is: It prevents over insurance

Gilda is at home and she discovers that her child is running an extremely high fever. Gilda places a call to her primary care physician advising her that she is going to go to the emergency room. Which of the following is true? Select one: a. As long as Gilda takes her child to an HMO approved hospital, she will have benefits. b. Gilda may take her child to any emergency room under the circumstances. c. Gilda's child may only be treated at the outpatient clinic during regular hours. d. Gilda must wait until her primary care physician is available.

The correct answer is: As long as Gilda takes her child to an HMO approved hospital, she will have benefits.

In an HMO, a member may be required to have a primary physician to be the focal point for all treatment and service. All of the following are true about the primary care physician relationship, EXCEPT: Select one: a. The primary care physician will have records from all physicians and other providers in the HMO to coordinate the patient's treatment. b. The primary care physician will provide referrals to specialists and other providers when required. c. The primary care physician can decide what is covered and what is not for the member. d. The primary care physician is usually an internal medicine or general Practice doctor.

The doctors in an HMO do not decide which services are covered or denied. The HMO makes those decisions through their claims division and policy writing department. The member should consult with the HMO directly when there is a question about eligibility for benefits. The correct answer is: The primary care physician can decide what is covered and what is not for the member.

For a benefit plan to be considered non-contributory: Select one: a. The employee must pay part of the cost. b. The government subsidizes the premiums. c. The employer pays 100% of the cost. d. The employee pays 100% of the cost.

The employer paying 100% of the cost is the definition of non-contributory. It means the employee does not contribute. The correct answer is: The employer pays 100% of the cost.

The theory of providing preventative care under an HMO is: Select one: a. Diagnosing and treating a problem at the earliest possible date will reduce health care cost in the long run. b. Free physicals will encourage people to use the plan. c. Doctors can get to know patients better. d. The patient will be better educated about health issues.

The entire concept of an HMO is to prevent serious conditions by early intervention. While an HMO will provide a complete array of treatments and curative services, their goal is to diagnose and manage conditions that might lead to significant medical bills; thus, reducing cost in the long run. The correct answer is: Diagnosing and treating a problem at the earliest possible date will reduce health care cost in the long run.

When group insurance is compared to individual insurance, all of the following are true, EXCEPT: Select one: a. More people are covered by individual plans than by group plans. b. It is usually easier to qualify for a group plan than an individual plan. c. The unit cost for group insurance is generally less than for a comparable individual plan. d. Premiums may increase for both group plans and individual plans.

The opposite is true. The majority of people are insured through their employer-sponsored group plan. The correct answer is: More people are covered by individual plans than by group plans.

An outline of coverage will include all of the following, EXCEPT: Select one: a. Exclusions and limitations b. Renewal and cancellation provisions c. Calculation of premiums d. Benefits and coverage's

The outline of coverage includes a description of the benefits and coverage, exclusions and limitations, and renewal and cancellation provisions. Calculation of premiums is not part of the coverage provisions. The correct answer is: Calculation of premiums

To be considered an out-of-network a provider must: Select one: a. Provide service at multiple locations b. Be in a non-recognized specialty c. Not have a contract with the network d. Not accept new patients

The primary distinction of a non-network provider is that he/she has not agreed to the discounts or fee schedule outlined in the provider contract. The other choices do not automatically eliminate the provider from participating in- network or HMO. The correct answer is: Not have a contract with the network

Normally, proof of loss for a medical claim must be submitted to the insurance company for consideration within 90 days, UNLESS: Select one: a. The provider fails to submit the claim. b. The insured is not of legal capacity. c. Hospital claims take longer. d. The insured is out of town.

The primary exception is lack of legal capacity of the insured. The correct answer is: The insured is not of legal capacity.

Eddie has an accidental death and dismemberment policy for $100,000 principal amount. He is involved in a logging accident and his hand is severed. What benefit should he expect? Select one: a. $200,000 since this is an industrial accident b. $100,000 since this a complete loss of the hand c. $50,000 since this is the benefit for losing a hand d. Nothing, since logging is an excluded industry

The principal sum is $100,000 and the loss of a hand is paid at 50% of the principal sum, which is $50,000. The correct answer is: $50,000 since this is the benefit for losing a hand

PPO networks contract with individual physicians and also with physician groups. What is the disadvantage of contracting with physician groups? Select one: a. Contracting with physician groups provides higher discounts to services. b. Contracting with groups allows the network and the physicians to have one individual act on their behalf. c. Physicians may leave the group from time to time to begin an individual practice and not be part of the network at the time of service. d. Doctors tend to practice in groups and the network can contract with more doctors in a shorter period of time.

When a PPO contracts with a group of physicians rather than individual doctors, individual doctors may move out of a practice for a number of reasons and the contract does not automatically go with them. A PPO participant may find that their doctor is no longer a contracted provider for this reason and be reimbursed with a lower scale of benefits. The correct answer is: Physicians may leave the group from time to time to begin an individual practice and not be part of the network at the time of service.

William is in the hospital recovering from surgery. He has some complications and his course of treatment has varied for the original plan. A representative from his insurance provider has visited the hospital to check on his progress and prognosis. Part of the visit involves creating a discharge plan. This process is known as: Select one: a. Concurrent review b. Postoperative review c. Prospective review d. Utilization review

When a case is ongoing, the insurance company may send a representative to verify that treatment is consistent with the diagnosis and to work toward establishing a discharge plan to minimize cost. This may include suggesting an extended care facility for convalescence. This process in known as concurrent review. The correct answer is: Concurrent review

Warren has followed the procedure to initiate a claim for a hospital stay. His insurance company has requested information from him that documents his loss. How long does Warren have to produce this proof of loss? Select one: a. 20 days b. 30 days c. 60 days d. 90 days

Written proof of loss must be provided to the insurer within 90 days after the date of loss. The correct answer is: 90 days

Several small businesses join together to form a large group for the purpose of buying group health insurance. This type of arrangement is called which of the following? Select one: a. Health Maintenance Organization (HMO) b. Franchise c. Association d. Multiple Employer Trust (MET)

A Multiple Employer Trust (MET) is an arrangement where small employers can join and receive more benefits than if they bought insurance separately. The correct answer is: Multiple Employer Trust (MET)

A policy lapses when: Select one: a. Premiums have not been paid and the grace period expires b. A bank draft is returned for NSF c. The insured pays with a money order d. The insured does not contact his agent for payment instructions

A grace period of at least seven days for weekly premium policies, 10 days for monthly premium policies and 31 days for all other policies, will be granted for the payment of each premium falling due after the first premium, during which grace period the policy coverage will continue in force. None of the other choices automatically creates a lapse. The correct answer is: Premiums have not been paid and the grace period expires

John has been in the hospital for five days. How long does he have to file a claim form and show proof of loss with his insurance company? Select one: a. 45 days b. 90 days c. 20 days d. 60 days

Although medical providers may file claims on your behalf, it is the responsibility of the insured to be sure that proof of loss is provided within 90 days with a proper claim completed and valid receipts attached. The correct answer is: 90 days

In a basic hospital expense policy, the ancillary hospital charges are usually paid as follows: Select one: a. Whatever is considered reasonable and customary b. A multiple of the daily room and board rate c. An amount equal to the room and board rate d. The scheduled daily charge

Ancillary charges are the extra charges, other than room and board, and are stated as a multiple of the daily room and board limit. A basic hospital expense plan will have a schedule that is usually based on the room and board rate. The correct answer is: A multiple of the daily room and board rate

Nick is reading his policy to determine any exclusions that he should know about. If he suffers a loss as a result of using intoxicants or narcotics, he should expect which of the following from most policies? Select one: a. Losses from the use of intoxicants or narcotics will only be covered if prescribed by a licensed physician. b. Losses from the use of intoxicants or narcotics will be covered under any policy without restriction. c. Losses from the use of intoxicants or narcotics may be considered fraud and result in a policy cancellation. d. The insurance company may file criminal charges.

Losses from the use of intoxicants or narcotics will only be covered if prescribed by a licensed physician. The coverage for use of intoxicants and narcotics can be very restrictive. The correct answer is: Losses from the use of intoxicants or narcotics will only be covered if prescribed by a licensed physician.

Marjorie has notified her insurance company that she has been in the hospital. The insurance company has furnished the form to file a claim. How long does Marjorie have to file proof of her loss? Select one: a. 10 days b. 30 days c. 60 days d. 90 days

Marjorie must file proof of loss within 90 days. The correct answer is: 90 days

Health polices can be all of the following, EXCEPT: Select one: a. An indemnity contract b. A valued contract c. A reimbursement contract d. A service basis contract

Medical expense contracts are reimbursement contracts. There is generally a reimbursement schedule or formula. The correct answer is: Reimbursement

What provision of a health policy may cover pre-existing conditions? Select one: a. Time limit for certain defenses b. Entire contract c. Insuring clause d. Exclusions

Note the difference. Exclusions will list the specific conditions that will not be covered. Time limit for certain defenses will provide automatic coverage for a condition that might not have been disclosed after a certain time. The correct answer is: Time limit for certain defenses

Which of the following will you find in the consideration clause of a heath insurance contract? Select one: a. Rules on filing claims b. Frequency of premium payments c. Entire contract d. Conversion options

Premiums are part of the consideration for the insurance contract. Know that both the application and the premium constitute the consideration at the time of application. The correct answer is: Frequency of premium payments

Which of the following can be excluded from prescription plans? Select one: a. Fertility drugs b. Experimental drugs c. Vitamins d. All of the above

Prescription plans may exclude coverage for fertility drugs, experimental drugs or vitamins. The correct answer is: All of the above

Matilda goes motocross racing over the Memorial Day weekend and suffers a broken leg. She contacts her agent to purchase a major medical policy and files a claim when the policy is issued. The company declines the claim. The grounds for declination is which of the following? Select one: a. Insuring clause does not cover this event b. The premium was not paid until the policy was issued c. The transaction did not meet the consideration requirement d. The broken leg was a preexisting condition

The accident occurred prior to the application for the policy, so it is a pre-existing condition. The correct answer is: The broken leg was a preexisting condition

An insured has reported the wrong age and the wrong occupation on his application. What is the insurance company allowed to do when the error is discovered? Select one: a. Cancel the policy and start over b. Cancel the agent's appointment for a grievous error c. Pay a benefit that the premium paid would have purchased at the correct age or occupation d. Bill the insured for unpaid premiums based on the insured's actual age

The benefit would be based on the age and occupation that would have been correct at the time of claim. The correct answer is: Pay a benefit that the premium paid would have purchased at the correct age or occupation

Which of the following may be an optional provision under the Uniform Provisions Law? Select one: a. Physical exam b. Change in occupation c. Entire contract d. Time limit to file claims

The change of occupation provision is an optional provision. The other provisions are mandatory. The correct answer is: Change in occupation

Nathan has advised his insurance company of a loss covered by his major medical policy. Nathan has not received a claim form. After 15 days, Nathan may: Select one: a. File a complaint with the insurance department b. Hire a lawyer to settle the claim in court c. Submit a description with supporting documents in any form he chooses d. Have his claim paid automatically since the company has not followed the rules

The claims form provision of a health contract states that if claims forms are not provided within 15 days, the claimant may submit the claim on any form they choose. The correct answer is: Submit a description with supporting documents in any form he chooses

Michelle has reviewed her health policy after her agent delivered it to her. She noticed that the birth date recorded is not correct and she requested that her date of birth be changed to reflect her correct age. Michelle can expect all of the following, EXCEPT: Select one: a. The company will rescind her policy due to incorrect information. b. She may have a premium change to reflect the correct age. c. If she has a claim before the age change is noted, the benefit may be more or less due to age adjustment. d. The policy will continue at the new age once corrected.

The company will NOT rescind her policy due to incorrect information. The company will adjust premiums and/or benefits to reflect the correct age. The correct answer is: The company will rescind her policy due to incorrect information.

A guaranteed renewable policy will have all of the following features, EXCEPT Select one: a. The company will renew the policy, but may increase rates for the entire class of business. b. The company will renew the policy to a certain age and never increase premiums. c. The company may stop renewing the policy based on a specified age in the policy. d. The insured may cancel the policy at any time by stopping premium payments.

The correct answer is the company will renew the policy to a certain age and never increase premiums. This statement describes a noncancellable policy, not a guaranteed renewable policy. The correct answer is: The company will renew the policy to a certain age and never increase premiums.

The entire contract provision in a health policy prevents the insurance company from: Select one: a. Cancelling the policy without written notice b. Increasing premiums for all in this policy type c. Eliminating the need for consideration d. Changing the terms of the contract by referring to documents not included in the policy

The entire contract provision prevents the insurance company from changing the terms of the contract by referring to documents not included in the policy. The correct answer is: Changing the terms of the contract by referring to documents not included in the policy

An insurance company may not modify the policy agreement (contract) without the insured's written permission. The part of the policy that addresses this is called which of the following? Select one: a. Uncontested legal action provision b. Incontestable provision c. Entire contract provision d. Modifying benefits provision

The entire contract provision prohibits any changes in the policy unilaterally. The correct answer is: Entire contract provision

Using the facility of payment clause in a policy, the insurance company may pay an amount up to the maximum limit to which of the following? Select one: a. The people who appear to be entitled to it b. The insured's estate c. Directly to a medical provider without proper assignment d. None of the above

The facility of payment provision states benefits are payable to an individual who is related to the deceased insured by blood or marriage. The limit in this amount is usually less than $3,000. The correct answer is: The insured's estate

The grace period for a health insurance policy may vary according to which of the following? Select one: a. Annual benefit period b. Frequency of premium payment c. Amount of the deductible d. Length of the elimination period

The grace period can vary according to frequency of premium payment. The grace period can be 7 days for weekly premiums, 10 days for monthly premiums and 31 days for all other modes of premium payment. The correct answer is: Frequency of premium payment

Roland has been on a trip and has failed to pay the premium due on his health insurance policy. His agent explains to him that he still has coverage because his policy has which of the following? Select one: a. Waiver of premium benefit b. Consideration clause c. Grace period d. Annual review period

The grace period is the time when the policy remains in effect while no premium has been paid. The correct answer is: Grace period

The grace period on a health policy is based on: Select one: a. The amount of the benefit maximum b. The amount of the deductible c. The mode of premiums d. The exclusion rider attached

The grace period on a health policy is based on the mode of premiums. The grace period can vary from 7-31 days depending on the mode of premium. The correct answer is: The mode of premiums

The term used for incontestable period for a health insurance contract is which of the following? Select one: a. Grace Period b. Time limit on filing claims c. Consideration clause d. Time limit on certain defenses

The incontestable period for a health insurance contract is called the time limit on certain defenses. The correct answer is: Time limit on certain defenses

Rupert has filed a claim to be reimbursed for a recent hospital stay. He feels the company is either ignoring his claim or is attempting to deny coverage. How long must he wait to initiate legal action? Select one: a. He must use an arbitrator first. b. He must contact the insurance department first. c. He must wait 60 days. d. The company has 45 days to respond.

The insured must wait 60 days after filing the claim before commencing legal action. The correct answer is: He must wait 60 days.

An application for reinstatement of a health insurance policy was submitted with all the proper requirements. The company makes no response. Will the policy automatically reinstate without further company action? Select one: a. No, the company has refused reinstatement. b. Yes, coverage is in effect after 90 days. c. No, the company must take affirmative action. d. Yes, the coverage will be effective in 45 days.

The insurer will reinstate the policy upon the 45th day after all past due premiums are paid, unless the application is denied. The law assumes that the company has approved the reinstatement if they do not take action to the contrary. The correct answer is: Yes, the coverage will be effective in 45 days.

Zack and his friends were celebrating his promotion to manager at a local pub after work. Zack was "over served" at the party and on the way home, Zack was involved in a serious accident that required him to be hospitalized. His blood alcohol level was well above the allowable limit. Zack's insurance policy will most likely pay his benefit at what level? Select one: a. Standard benefits as for any other claim b. A limit of $5,000 total, regardless of claim size c. Nothing, as alcohol related accidents are usually policy exclusion. d. His deductible will be twice the policy schedule.

The insurer would pay nothing. The insurer is not liable for any loss or injury in consequence of the insured's being intoxicated or under the influence of any narcotic, unless administered on the advice of a physician. The correct answer is: Nothing, as alcohol related accidents are usually policy exclusion.

Seth has notified his insurance company that he has a claim. The insurance company must furnish a claim form within how many days to comply with the governing provisions? Select one: a. 15 days b. 21 days c. 10 days d. 30 days

The insurer, upon receipt of the notice, must furnish the forms for filing proof of loss. If the forms are not provided within 15 days, the claimant will be deemed to have complied with the policy's requirements for proof of loss upon submitting written proof of the occurrence, as well as the character and the extent of the loss for which claim is made. The correct answer is: 15 days

There are two parties mentioned in the insuring clause. Who are they? Select one: a. The insurance company and the state regulatory agency b. The insurance company and the insured c. The agent and the insured d. The insured and the agency that sold the policy

The insuring clause spells out the parties to the contract, the insurer and insured. The correct answer is: The insurance company and the insured

What policy clause states, "benefits are subject to all the provisions, conditions, and exclusions of the policy?" Select one: a. Time limit on certain defenses clause b. Entire contract clause c. Consideration clause d. Insuring clause

The insuring clause states the scope of coverage, the promise to pay benefits under the terms of the policy, any conditions within the policy, and any definitions required by law. The correct answer is: Insuring clause

What constitutes the "entire contract" for a health policy? Select one: a. The form the insurance company has on file with the insurance commissioner b. The policy, all riders and amendments, the application and all other papers that are required c. All papers the agent has on file applicable to the policy d. The photocopy on file with the insurance commissioner

The only choice is one with all the components of a policy included. These must all be provided to the insured in the form of a policy. The correct answer is: The policy, all riders and amendments, the application and all other papers that are required

A disability policy has lapsed due to non-payment of premium. The insured contacts his/her agent to pay back premium and reinstate the policy. What is the waiting period before coverage resumes? Select one: a. 90 days for accidents and sickness b. 10 days for sickness and immediate for accidents c. 60 days for sickness and 30 days for accidents d. 30 days for both sickness and accidents

The reinstated policy will cover accidents immediately upon reinstatement, but will not cover sickness until 10 days have passed. The correct answer is: 10 days for sickness and immediate for accidents

A claim has been filed on a timely basis. The insurer has requested further proof of loss. How long does the insured have to furnish the proof? Select one: a. 60 days, up to one year b. 60 days, up to 5 years c. 90 days, up to 1 year d. 90 days, up to 5 years

The standard time frame is 90 days, but the insured may have up to one year if it's not reasonable to obtain the proof in 90 days. In no event, except in the absence of legal capacity, may proof of loss be submitted later than one year from the date proof of loss was initially required. The correct answer is: 90 days, up to 1 year

Old Reliable issues a policy that may not be cancelled by the insurance company, except for non-payment of premium. The company does have the right to adjust premiums for an entire class of business. This type of policy is called which of the following? Select one: a. Guaranteed level premium b. Non-cancellable and renewable c. Guaranteed renewable d. Variable rate policy

This is the way a guaranteed renewable contract works. This is generally the type of contract for medical benefits, since the claims will be subject to inflation. The correct answer is: Guaranteed renewable

An employee changes employers and has diabetes. He has worked for his previous employer for 4 years and is covered by a HIPAA eligible group. When will he have full coverage under the new employer? Select one: a. At the end of any eligibility period under the new employer plans b. After 12 months for diabetes and immediate for all other conditions c. He will be declined for coverage, since diabetes is a knock out disease. d. He may be issued a plan with restrictive riders.

This new employee will be allowed to enroll as soon as any probationary or eligibility period has expired. If an employee has 12 months or more coverage under a previous employer, that will eliminate any pre-existing condition clause that may be applied. The correct answer is: At the end of any eligibility period under the new employer plans

Winston applied for a health insurance policy stating that he had never had heart trouble, even though he had suffered a heart attack one year prior to making the application. Winston has a heart attack 2 months after the policy is issued. The insurance company cancelled the policy and refunded his premiums. Under what clause does the insurance have the right to take this action? Select one: a. Pre-existing condition exclusion b. Anti-money laundering c. Fraud d. Entire contract provision

This would fall under the pre-existing condition exclusion. The correct answer is: Pre-existing condition exclusion

Joe has named his wife, Sarah, primary beneficiary to his accidental death and dismemberment Policy. Joe is not able to change the beneficiary without Sarah's consent. This type of arrangement is called which of the following? Select one: a. Contingent b. Irreconcilable c. Primary d. Irrevocable

When the beneficiary has to give permission, it is irrevocable. The owner has also given up one of his rights of ownership. The correct answer is: Irrevocable

Bill has a policy that will always be the same premium. He has which of the following? Select one: a. A guaranteed renewable policy b. A noncancellable policy c. An unconditionally renewable policy d. A cancellable policy

With a noncancellable policy, the insurer cannot cancel the policy or increase premiums. The correct answer is: A noncancellable policy

Mary has been admitted to the hospital for testing. How long does she have to give notice of claim to the insurance company? Select one: a. 15 days b. 20 days c. 30 days d. 45 days

Written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible. Notice given by or on behalf of the insured or beneficiary to the insurer or any authorized agent is deemed as proper notice. The correct answer is: 20 days

An insured has 20 days to notify the insurance company of a loss. This is called: Select one: a. Notice of claim provision b. Documentation of claim c. Claim form requirement d. Affirmative action provision

Written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible. This provision does not require submission of claims. It merely requires the insured to notify the company of a pending claim. The correct answer is: Notice of claim provision