Insurance Quiz Types of Health Insurance Policy

If a dental plan is integrated, it is combined with what type of plan? AMedical BSecondary dental CSupplemental DLife

AMedical Integrated plans allow for dental plans to be included in a medical plan, providing coverage for both under a single contract. Sometimes the deductibles are merged, but this does not have to be the case.

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as AMedical expense. BCritical illness. CMajor medical. DAD&D.

B A critical illness policy covers multiple illnesses, such as heart attack, stroke, renal failure, and pays a lump-sum benefit to the insured upon the diagnosis (and survival) of any of the illnesses covered by the policy.

The type of dental plan which is incorporated into a major medical expense plan is a/an AStand-alone dental plan. BBlanket dental plan. CIntegrated dental plan. DSupplemental dental plan.

C Integrated dental plan. When dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses

The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? ARestrictive BAccidental Death CComprehensive DAccident-only

D Accident-only policies cover medical benefits related to an accident. Medical conditions related to sickness are not covered.

An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay? AThe insured will receive a return of premium. BIt will pay up to 10 years of benefits. CIt will pay until the insured is released from the hospital. DNothing; illness is not covered during the first 20 days of the contract.

D Loss by illness is not covered if it occurs during the probationary period.

Group health insurance is characterized by all of the following EXCEPT AA master contract. BLower administrative costs. CConversion privilege. DAdverse selection.

D If an insurer issues a group health insurance policy, they must cover everyone in the group under the master contract. Group underwriting process is designed to avoid adverse selection.

Which of the following is NOT true regarding Basic Surgical Expense coverage? AThere is no deductible. BContracts include a surgical schedule. CIt is commonly written in conjunction with Hospital Expense policies. DCoverage is unlimited.

D Basic Surgical Expense Coverage is commonly written in conjunction with Hospital Expense policies. These policies pay for the costs of surgeons' services, whether the surgery is performed in or out of the hospital. Coverage includes surgeons' fees, anesthesiologist, and the operating room when it is not covered as a miscellaneous medical item. As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited.

How many pairs of glasses in a 12-month period will a vision expense insurance plan cover? AOne BTwo CThree DUnlimited

A Correct! It is common in most vision expense insurance plans to restrict benefits to one exam and one pair of glasses in any 12-month period.

A hospital indemnity policy will pay AAny expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. BA benefit for each day the insured is in a hospital. CIncome lost while the insured is in the hospital. DAll expenses incurred by the stay in the hospital.

BA benefit for each day the insured is in a hospital. Correct! Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined to the hospital.

Which of the following provides coverage on a first-dollar basis? ASupplementary major medical BLimited major medical CBasic expense DAccident expense

C A basic expense policy will provide coverage on a first-dollar basis (no deductible). After the limits of the basic policy are exhausted, the insured must pay a corridor deductible before the major medical coverage will pay benefits.

Which of the following is considered a qualifying event under COBRA? ARelocation BPromotion CDivorce DMarriage

CDivorce Other qualifying events include the voluntary termination of employment; an employee's change from full time to part time; or the death of the employee.

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the AQualification period. BEnrollment period. CProbationary period. DElimination period.

D On disability income insurance, the time between the onset of an injury or sickness and the time benefits begin is known as the waiting or elimination period.

A hospital indemnity policy will pay AIncome lost while the insured is in the hospital. BAll expenses incurred by the stay in the hospital. CAny expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. DA benefit for each day the insured is in a hospital.

DA benefit for each day the insured is in a hospital. Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined to the hospital.

Which of the following terms describes a specific dollar amount of the cost of care that must be paid by the member? ACost share BPrepayment CContractual cost DCopayment

DCopayment Correct! A copayment is a specific dollar amount of the cost of care that must be paid by the member.

What are the 2 types of Flexible Spending Accounts? AHealth Care Accounts and Health Reimbursement Accounts BMedical Savings Accounts and Dependent Care Accounts CMedical Savings Accounts and Health Reimbursement Accounts DHealth Care Accounts and Dependent Care Accounts !

DHealth Care Accounts and Dependent Care Accounts There are 2 types of Flexible Spending Accounts: a Health Care Account for out-of-pocket health care expenses, and a Dependent Care Account to help pay for dependent care expenses which make it possible for an employee and his or her spouse, if applicable, to work.

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the AComprehensive expense coverage. BInterval expense coverage. CLimited coverage. DMajor medical coverage.

DMajor medical coverage. The corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage.

In long-term care insurance, what type of care is provided with intermediate care? ANonmedical daily care BDaily care, but not nursing care CIntensive care DOccasional nursing or rehabilitative care

DOccasional nursing or rehabilitative care Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.

In which of the following locations would skilled care most likely be provided? AIn an institutional setting BAt the patient's home CIn an outpatient setting DAt a physician's office

A Skilled nursing care is performed under the direction of a physician, usually in an institutional setting.

If an insured is not required to pay a deductible, what kind of coverage does he/she have? AComprehensive BFirst dollar CCorridor DMajor medical

BFirst dollar Correct! First-dollar coverages do not require the insured to pay a deductible.

Which of the following would an accident-only policy NOT cover? ADeath from a motorcycle accident BAmputation of a leg that was burned during a house fire CSurgery to repair a wrist damaged by tendonitis. DHospitalization costs due to a boating accident

CSurgery to repair a wrist damaged by tendonitis. Accident-only policies cover medical costs caused by accidents, not sickness. Because the wrist was damaged by a sickness, not an accident, the policy would not cover any medical claims relating to the surgery or the condition itself.

Another term used to describe "no deductible" is AComprehensive. BTotal coverage. CImmediate cooperative DFirst-dollar basis.

DFirst-dollar basis. Another term used to describe "no deductible" is " first-dollar basis".

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT ACoverage for plan participants is uniform. BIndividual members of the group may select the level of benefits for their own coverage. CThe plan is based on other than individual selection. DAll eligible employees must be covered.

! In group health insurance, all individuals are covered under the master policy for the same coverages.

Which of the following individuals is eligible for a Health Savings Account? AAllison is insured by a High Deductible Health Plan (HDHP) BMargaret is 68 years old CSuzie is a dependent on her parent's tax returns DTomas is insured by a Low Deductible Health Plan (LDHP) Incorrect! To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare, and can't be claimed as a dependent on someone else's tax return.

A

In the event of a divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months? ACOBRA BMSA CHIPAA DSocial Security

A Dependents of employees are eligible to receive group health insurance under the employee's plan. If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months.

An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay? ANothing; illness is not covered during the first 20 days of the contract. BThe insured will receive a return of premium. CIt will pay up to 10 years of benefits. DIt will pay until the insured is released from the hospital.

A Loss by illness is not covered if it occurs during the probationary period.

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? ADisability Buy-Sell BProprietary Transfer CAbsolute assignment DTransfer of Ownership

A The Disability Buy-Sell agreement specifies how a business will pass between business owners if one of the owners dies or becomes disabled.

What is the period of coverage for events such as death or divorce under COBRA? A36 months B60 days C31 days D12 months

A The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.

COBRA applies to employers with at least A20 employees. B80 employees. C60 employees. D50 employees.

A Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), any employer with 20 or more employees must extend group health coverage to terminated employees and their families.

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? AIndemnity BSurgical CBlanket DMedigap

A. Correct! A Hospital Indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses.

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? A12 B24 C36 D6

A12 Correct! Long-term care policies, which can be marketed in the form of individual policies, group policies, or as riders to life insurance policies, provide coverage for individuals who are no longer able to live an independent lifestyle and require living assistance at home or in a nursing home facility. They must provide coverage for at least 12 consecutive months in a setting other than an acute care unit of a hospital.

Which of the following statements regarding Business Overhead Expense policies is NOT true? ABenefits are usually limited to six months. BPremiums paid for BOE are tax-deductible. CAny benefits received are taxable to the business. DLeased equipment expenses are covered by the plan.

ABenefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called ABusiness Overhead Expense. BCredit Accident and Health coverage CPartial Disability DRecurrent Disability

ABusiness Overhead Expense. Correct! Business Overhead insurance is often purchased by small employers to pay the ongoing business expenses (such as payroll) in the event the owner of the business becomes disabled. Premiums paid are tax deductible as a business expense, but proceeds paid are taxable as income.

Who can provide skilled nursing care? ADoctor BSpouse CFamily Member DCommunity volunteer

ADoctor Correct! Skilled nursing care is daily nursing and rehabilitative care that can only be provided by medical personnel, under the direction of a physician. Skilled care is almost always provided in an institutional setting.

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was written with a 30-day AElimination period. BBlackout period. CProbationary period. DDisability period.

AElimination period. The elimination period is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of providing coverage and eliminates the filing of many claims.

As it pertains to group health insurance, COBRA stipulates that AGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. BRetiring employees must be allowed to convert their group coverage to individual policies. CTerminated employees must be allowed to convert their group coverage to individual policies. DGroup coverage must be extended for terminated employees up to a certain period of time at the employer's expense.

AGroup coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.

Regarding the taxation of Business Overhead policies, APremiums are deductible, and benefits are taxed. BPremiums are not deductible, and benefits are taxed. CPremiums are not deductible, but benefits are deductible. DPremiums are not deductible, but expenses paid are deductible.

APremiums are deductible, and benefits are taxed. The premiums paid for BOE insurance are tax deductible to the business as a business expense. However, the benefits received are taxable to the business as received.

What is the purpose of COBRA? ATo provide continuation of coverage for terminated employees BTo provide coverage for the dependents CTo provide health coverage for people with low income DTo protect the insureds against insolvent insurers

ATo provide continuation of coverage for terminated employees The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.

Which of the following provides coverage on a first-dollar basis? ALimited major medical BBasic expense CAccident expense DSupplementary major medical

B Incorrect! A basic expense policy will provide coverage on a first-dollar basis (no deductible). After the limits of the basic policy are exhausted, the insured must pay a corridor deductible before the major medical coverage will pay benefits.

When an insurer combines two periods of disability into one, the insured must have suffered a APresumptive disability. BRecurrent disability. CPartial disability. DResidual disability.

B Recurrent disability is the period of time (usually within 3-6 months) during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability.

The gatekeeper of an HMO helps ADetermine which doctors can participate in an HMO plan. BControl specialist costs. CDetermine who will be allowed to enroll in an HMO program. DPrevent double coverage.

B Initially the member chooses a primary care physician, or gatekeeper. If the member needs the attention of a specialist, the primary care physician must refer the member. This helps keep the member away from the higher priced specialists unless it is truly necessary.

Which of the following is considered a presumptive disability under a disability income policy? ALoss of one hand or one foot BLoss of two limbs CLoss of one eye DLoss of hearing in one ear

B Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs.

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the ALimited coverage. BMajor medical coverage. CComprehensive expense coverage. DInterval expense coverage.

B The corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage.

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are ASubject to capital gains taxes. BTax deductible. CSubject to personal income taxes. DPost-tax dollars.

B Contributions to HSAs by individuals are deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income.

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay? A10 days B15 days C25 days D45 days

B 15 days A probationary period refers to the amount of time that coverage is not available for illness-related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when benefits will start being paid. In this case, the individual is considered disabled for 45 days, and the benefits will start to be paid after 30 days. So, the client will receive benefits for 15 days.

Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? AHome health care BAdult day care CResidential care DAssisted living

B adult day care Adult day care is designed for those who require assistance with various ADLs on a daily basis, but not around the clock. Custodial care is usually the only service provided by adult day care facilities.

If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days? ARenewability BConversion CReplacement DGrace period

B conversation onversion provisions are required by law. It allows terminated employees to convert their group health coverage to individual insurance without evidence of insurability, within a specified amount of time, and for eligible reasons.

Which of the following disability income policies would have the highest premium? A15-day waiting period / 5-year benefit period B15-day waiting period / 10-year benefit period C30-day waiting period / 10-year benefit period D30-day waiting period / 5-year benefit period .

B15-day waiting period / 10-year benefit period The waiting, or elimination, period is the time from the onset of disability the insured must wait before becoming eligible for benefits. The shorter the waiting period, the higher the premium. After the insured satisfies the waiting period, they will receive benefits from the insurer for a limited benefit period. The longer the benefit period, the higher the premium. A disability income policy that includes the shortest waiting period and the longest benefit period would be most expensive

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? AJoe is 40 and is not covered by any other health insurance BAmanda is 67 and is covered by a basic medical expense policy CAndy is 55 and is covered under a dental care policy DJenny is 60 and also has a long-term care insurance plan

BAmanda is 67 and is covered by a basic medical expense policy ! To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare (usually age 65), and can't be claimed as a dependent on someone else's tax return.

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? ACommunity-based organization professionals BAttending physician CRegistered nurses DLicensed practical nurses

BAttending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparations.

All of the following apply to short-term disability plans EXCEPT AA benefit period of 26 weeks is most common for group plans. BBoth group and individual plans are renewable. CGroup plans can provide benefit periods of up to 52 weeks. DIndividual plans can provide benefit periods of up to 2 years.

BBoth group and individual plans are renewable Correct! Short-term disability plans are not renewable

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? ANo benefits BFull benefits CPartial benefits DFull benefits for 2 years

BFull benefits Correct! Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.

All of the following are differences between individual and group health insurance EXCEPT AIndividual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group. BIndividual insurance does not require medical examinations, while group insurance does require medical examinations. CIn individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. DIndividual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational.

BIndividual insurance does not require medical examinations, while group insurance does require medical examinations. Correct! In individual coverage, policies are issued based upon individual underwriting. In group plan, everyone is covered for the same coverage and there is no individual underwriting selection.

Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off? ASubmit written notification to his major medical insurance company BPay a special deductible on his major medical policy CWait 6 months in order to be covered again DNothing needs to be done. The hospital's billing staff will make the appropriate arrangements.

BPay a special deductible on his major medical policy Incorrect! Before a major medical policy pays benefits not covered under an exhausted basic medical policy, the insured must pay a corridor deductible.

When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called APoint of Service Plans (POS). BPreferred Provider Organization (PPO). CManaged care. DIndemnity plans.

BPreferred Provider Organization (PPO). The insurer negotiates the rates for specific procedures for their subscribers. If the subscriber chooses to go to a provider outside the preferred provider, they will have to pay a part of the cost of service.

Which statement is NOT true regarding underwriting group health insurance? AEveryone in the group is covered, regardless of their medical history. BThe group is assessed individually for insurability. CThe premiums are reassessed annually. DThe cost of the policy is partially determined by the ratio of males to females in the group.

BThe group is assessed individually for insurability.

What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled? ADisability Buy-Sell BBusiness Overhead CKey Person Disability DGroup Disability

C Key person disability is purchased by the employer on the life of a key employee to cover the expense of hiring and training a replacement for the key person.

Which of the following statements is NOT correct concerning the COBRA Act of 1985? AIt applies only to employers with 20 or more employees that maintain group health insurance plans for employees. BCOBRA stands for Consolidated Omnibus Budget Reconciliation Act. CIt requires all employers, regardless of the number or age of employees, to provide extended group health coverage. DIt covers terminated employees and/or their dependents for up to 36 months after a qualifying event.

C COBRA Act applies to only employers with 20 or more employees.

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

C In a relative-value approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery.

Which of the following best describes the "first-dollar coverage" principle in basic medical insurance? AThe insurer covers the first claim on the policy. BDeductibles and coinsurance are taxed first. CThe insured is not required to pay a deductible. DThe insured must first pay a deductible.

C three basic types of coverage (hospital, surgical and medical) are often referred to as first-dollar coverage because they usually do not require the insured to pay a deductible.

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

CBy law, the new, individual policy must provide the same benefits as the group insurance policy. Correct! Terminated employees have 31 days to convert to an individual health insurance policy, without having to provide proof of insurability. The insurer can adjust the new, individual health policy's premium as it sees fit, as long as coverage is provided. The new policy could offer lesser benefits than the original group health policy.

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance? AApply for another group health insurance BRequest a refund of unearned premium CConvert to an individual health policy DSue the employer

CConvert to an individual health policy is perfectly legal for a company to terminate the master contract of a group health insurance policy. When this happens, the insureds can convert to individual health policies within a specified period of time, without having to provide proof of insurability.

Which of the following is true of a PPO? AClaim forms are completed by members on each claim. BNo copayment fees are involved. CIts goal is to channel patients to providers that discount services. DThe most common type of PPO is the staff model. !

CIts goal is to channel patients to providers that discount services. Insureds are treated by providers who have agreed to discount their charges.

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? ASpecified Disease Policy BCredit Disability CSpecial Risk Policy DLimited Risk Policy

CSpecial Risk Policy The Special Risk Policy will cover unusual types of risks that are not normally covered under AD&D policies. It covers only the specific hazard or risk identified in the policy, such as a racecar driver test-driving a new car.

The period of time immediately following a disability during which benefits are not payable is AThe grace period. BThe blackout period. CThe elimination period. DThe probationary period.

CThe Elimination Period The elimination period is a waiting period, expressed in days, not dollars, imposed on the insured from the onset of disability until benefit payments commence.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? AThe capital amount in monthly installments BThe principal amount in monthly installments CThe capital amount in a lump sum DThe principal amount in a lump sum

CThe capital amount in a lump sum Accidental Death and Dismemberment policies pay a capital amount (a percentage of the principal amount) for the loss of one limb or loss of sight in one eye. The principal amount is paid for death or often for the loss of 2 limbs or loss of sight in both eyes. Benefits are paid in a lump sum.

Which is NOT a characteristic of group health insurance? ADependents of insureds can be covered under group health plans. BGroup coverage may be converted to individual coverage if the group contract is ended. CThe actual policy is called the "master contract". DA policy is issued to each insured individual.

Correct! The actual policy, called the "master contract", is issued to the group sponsor only; the individuals covered under the policy are issued certificates of insurance as proof that they are covered under the master contract. Dependents are covered under group plans. If the group contract is terminated, insureds may convert to individual policies without having to provide proof of insurability.

How is emergency care covered for a member of an HMO? AA member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own service area. BHMOs have salaried member physicians, but they do not cover emergency care. CAn HMO emergency specialist will cover the patient. DA member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.

D Emergency care must be provided for the member in or out of the HMO's service area. If emergency care is being provided for a member outside the service area, the HMO will be eager to get the member back into the service area so that care can be provided by salaried member physicians.

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point? ARelative value BTranslation factor CPractical value DConversion factor

D In order to determine the amount payable for a given procedure, the assigned points (relative value) of 200 are multiplied by a conversion factor. This conversion factor represents the total amount payable per point. For example, if the conversion factor is $10 and the point value is 200, the policy would pay $2,000 for the procedure (200 x 10).

At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? A55 B59 1/2 C62 D65

D After age 65, a withdrawal from an HSA used for a nonhealth purposes will be without a penalty, although taxed.

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage? A$25 B$25.50 C$100 D$102

D$102 Correct! The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)? AAt any time as necessary BWithin 3 months of the cause of the change CNo changes can be made once the policy is issued DDuring the open enrollment period

DDuring the open enrollment period FSA benefits may be changed during open enrollment, unless the circumstances are deemed a Qualified Life Event.

Which statement accurately describes group disability income insurance? AIn long-term plans, monthly benefits are limited to 75% of the insured's income. BThere are no participation requirements for employees. CShort-term plans provide benefits for up to 1 year. DThe extent of benefits is determined by the insured's income.

DThe extent of benefits is determined by the insured's income. Correct! Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.

Which statement accurately describes group disability income insurance? AIn long-term plans, monthly benefits are limited to 75% of the insured's income. BThere are no participation requirements for employees. CShort-term plans provide benefits for up to 1 year. DThe extent of benefits is determined by the insured's income.

DThe extent of benefits is determined by the insured's income. Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.

Which statement is NOT true regarding underwriting group health insurance? AThe group is assessed individually for insurability. BThe premiums are reassessed annually. CThe cost of the policy is partially determined by the ratio of males to females in the group. DEveryone in the group is covered, regardless of their medical history.

Group health insurance policies must cover everyone in the group, regardless of age, health history, and occupation. Because of this blanket coverage, the group as a whole is assessed for insurability. The size, average age, gender ratio, persistency, and industry of the group are considered, along with other factors, when determining premiums. Groups can be reassessed annually in order to adjust premium amounts.

How are HMO territories typically divided? ABy where the HMO can find the least expensive physicians BGeographic areas CType of physician services available DCommunity rating system

The HMO offers services to those living within specific geographic boundaries (for example, along county lines). Persons who live within the boundaries are eligible to belong to the HMO, but if they do not live within the boundaries, they are ineligible.

In a disability policy, the elimination (or waiting) period refers to the period between ACoverage under a disability policy and coverage under Social Security. BDuring which any specific illness or accident is excluded from coverage. CThe first day of disability and the day the insured starts receiving benefits. DThe effective date of the policy and the date the first premium is due.

The elimination, or waiting, period starts at the onset of a disability claim and is the period of time the insured must wait before benefits start.