ch 1 - Health and Accident Insurance

Sole proprietors are permitted tax deductions of health costs paid from their earnings in the amount of? a. costs that exceed 7 1/2 % of AGI b. costs that exceed 10 % of AGI c. 100% of costs d. no deduction permitted

c. 100% of costs

in an employer-sponsored contributory group diablillty income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at? a. employee has no tax liability b. 40% of the benefit c. 60% of the benefit d. 100% of the benefit

c. 60% of the benefit

According to the health insurance portability and accountability act (HIPPA), when can a group health policy renewal be denied ? a. when a change of management has occurred within the group b. when the annual number of claims has increased by 25 % c. Participation or contribution rules have been violated d. when group participation has increased by 25 %

c. Participation or contribution rules have been violated

which of the following would be considered a possible applicant and contract policyholder for group health benefits?

Employer

according to hippa, when an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance, the individual

Is eligible for coverage upon hire

Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?

Medicare is the secondary payer

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? a. The amount contributed by the employer b. The amount contributed by the owner c. The underlying account investments used d. The medical expenses paid for by the HSA

a. The amount contributed by the employer

A person covered with an individual health plan? a. is issued a policy b. is issued a certification of medical costs c. does not contract directly with the insurance company d. is not subject to medical underwriting

a. is issued a policy

Under the subrogation clause, legal action can be taken by the insurer against the? a. responsible 3rd party b. beneficiary c. policyowner d. state

a. responsible 3rd party

which of the following decisions would a health savings account (HSA) Owner not be able to make? a. the amount contributed by the employer b. the amount contributed by the owner c. the underlying account investments used d. the medical expenses paid for by the HSA

a. the amount contributed by the employer

Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a(n)? a. crossover b. conversion c. exchange d. extension of benefits

b. conversion

Under group health insurance, a certificate of coverage is issued to the? a. employer b. employee c. producer d. sponser

b. employee

An Employer is issued a group medical insurance policy. The single contract is known as? a. entire contract b. master policy c. certificate of contract d. employer contract

b. master policy

health insurance involves the perils, accents & ________? a. death b. sickness c. disability d. liability

b. sickness

which of the following is typically NOT eligible for coverage in a group health policy? a. full time employee b. temporary employee c. business owner d. partner in a partnership

b. temporary employee

if an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a 1,000 monthly disability benefit? a. $100 b. $250 c. $500 d. $1000

c. $500

Key Person Disability Insurance pays benefits to the? a. hospital b. employee c. employer d. employee's creditors

c. employer

what is used to each employee of an employer health plan?

certificate

HIPPA considers which of the following as " individually identifiable health information"? a. a person's employment history b. a person's net income c. a person's hire date d. a person's health claim information

d. a person's health claim information

in an employer sponsored group accident and health plan a master contract is issued to the

employer

HIPPA considers which of the following as "individually identifiable health information

A person's health claim information

which of the following does coordination of benefits allow?

Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid

continued coverage under cobra would be to all of the following except

a covered employee is terminated for gross misconduct

How many employees must an employer have for terminated employee to be eligible for COBRA? a. 20 b. 30 c. 40 d. 50

a. 20

when are group disability benefits considered to be tax-free to the insured? a. when the recipient pays the premiums b. when the employer pays the premiums c. when both the employer and the recipient pays the premiums d. when benefits paid are equal to or lower than the recipient's salary

a. when the recipient pays the premiums

the purpose of coordination of benefits provision in group accident and health plans Is to

avoid overpayment of claims

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance. a. 45 b. 63 c. 75 d. 90

b. 63

the policyholder for a group health benefit plan is considered to be the? a. employee b. employer c. liaison d. insurer

b. Employer

which of the following would be considered a possible applicant and contract policy holder for group health benefits? a. Human Resource Department b. Employer c. Insured Employee d. Insured Company

b. Employer

Health insurance will typically cover which of the following perils? a. death due to illness b. Injury due to accident c. death due to accident d. dismemberment

b. Injury due to accident

Coordination of benefits regulations applies to all of the following plans EXCEPT? a. group vision plan b. preferred provider organization (PPO) plan c. self-funded group health plan d. group health plan

b. Preferred Provider Organization (PPO) Plan

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must? a. be less extensive and the premium cannot exceed 102 % b. be the same and the premium cannot exceed 102 % c. be more extensive and the premium cannot exceed 102 % d. be the same as well as the premium

b. be the same and the premium cannot exceed 102 %

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the? a. employee's benefits still owed can be claimed b. employee cannot be excluded from the new employer's health plan c. employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan d. new health insurance carrier will have a clear record of any chronic conditions that exist

c. employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan

A master contract and certificate of coverage can be found in which type of policy? a. long term b. medicaid c. group d. medicare

c. group

which of the following would evidence ownership in a participating health insurance contract? a. stock ownership b. irrevocable beneficiary status c. policy ownership d. collateral assignment

c. policy ownership

justin is receiving disability insurance income benefits forma group policy paid for his employer. how are these benefits treated for tax purpose? a. partially taxable income b. non-taxable income c. taxable income d. conditionally taxable income

c. taxable income

When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)? a. there have been too many claims the previous year b. the size of the group has been increased by more than 10% c. when contribution or participation rules have been violated d. when contribution or participation rules have been changed

c. when contribution or participation rules have been violated

Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? a. April 1st b. April 6th c. May 15th d. May 30th

d. May 30th

Under a disability income policy, which provision would be payable if the cause of an injury is UNEXPECTED and ACCIDENTAL? a. presumptive disability provision b. absolute accidental provision c. accidental death benefit provision d. accidental bodily injury provision

d. accidental bodily injury provision

which of the following is negligible to participate in section 125 plan? a. key employee in a C-Corp b. highly compensated employee in an S-Corp c. a C-Corp owner with greater than 2% share d. an S-Corp owner with greater than 2% share

d. an S-Corp owner with greater than 2% share (shareholders with greater than 2 % of an S-Corp, LLC, partnership, or Sole Proprietorship are not eligible to participate in any aspect of a section 125 plan. Owners of a C-Corp are eligible, but they MUST hold up to the non-discrimination rules.)

which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled? a. disability overhead policy b. business continuation policy c. disability buy-sell policy d. business overhead expense policy

d. business overhead expense policy

what is issues to each employee of an employer health plan? a. provision b. receipt c. policy d. certificate

d. certificate (employee's covered by an employer {i.e., NOT a group plan} are issued an insurance certificate instead of an insurance policy)

Group Disability Income plan that pays tax free benefits to covered employees is considered? a. non-contributory b. partial contributory c. group contributory d. fully contributory

d. fully contributory

Common Exclusions with vision plans is? a. eyeglass frames b. the examination c. contact lenses d. lasik surgery

d. lasik surgery

group health plans may deny participation based upon the? a. member's claim history b. member's age c. member's preexisting conditions d. member's part time employment status

d. member's part time employment status

an insurer has the right to recover payment made to the insured from the negligent party. these rights are called? a. contributory b. indemnity c. estoppel d. subrogation

d. subrogation

The limited period of time given to all members to sign up for a group, health plan is called the

enrollment period

Credit accident and health insurance are designed to

help pay off existing loans during periods of diablillty

what does the COBRA of 1985 allow an employee to do?

in the event of employment termination, group health insurance can be kept if the employee pays the premiums

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?

it would be considered taxable income to the employee

the election of cobra for continuation of health coverage will

maintain the same coverage and increase premium

what is the contract called that is issued to an employer for a group medical insurance plan?

master policy