Chapter 4

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?

$500

Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of

100% of costs

How many employees must an employer have for a terminated employee to be eligible for COBRA?

20

HIPAA considers which of the following as "individually identifiable health information"?

A person's health claim information

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

Accidental bodily injury provision

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

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

Business overhead expense policy

What is issued to each employee of an employer health plan?

Certificate

A master contract and certificate of coverage can be found in which type of policy?

Group

What does the Consolidated Omnibus Budget Reconciliation Act (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

What is the contract called that is issued to an employer for a Group Medical Insurance plan?

Master policy

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?

May 30

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

What is issued to each employee of an employer health plan?

Policy

Which of the following would evidence ownership in a participating health insurance contract?

Policy ownership

Coordination of Benefits regulation applies to all of the following plans EXCEPT

Preferred Provider Organization plan

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

Taxable income

Which of the following is typically NOT eligible for coverage in a group health policy?

Temporary employee

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

The amount contributed by the employer

When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?

When contribution or participation rules have been violated

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)

conversion

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the

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

In an employer-sponsored group accident and health plan, a master contract is issued to the

employer

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 plans are designed to

help pay off existing loans during periods of disability

A person covered with an individual health plan

is issued a policy

A common exclusion with Vision plans is

lasik surgery

The purpose of the Coordination of Benefits provision in group accident and health plans is to

reduce adverse selection

Under the subrogation clause, legal action can be taken by the insurer against the

responsible third party

An insurer has the right to recover payment made to the insured from the negligent party. These rights are called

subrogation

Continued coverage under COBRA would be provided to a(n)

terminated employee