Chapter 4 - Health and Accident Insurance
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do? - In the event of the employment termination, group health insurance can be kept if the employee pays the premiums - Receive a tax credit to help offset the cost of health insurance - Remain on their current coverage for 30 months - In the event of employment termination, group health insurance can be kept if the employer pays the premiums
In the event of the employment termination, group health insurance can be kept if the employee pays the premiums
Health insurance will typically cover which of the following perils? - Death due to illness - Injury due to accident - Death due to accident - Dismemberment
Injury due to accident
A person covered with an individual health plan - Is issued a policy - Is issued a certificate of medical costs - Does not contract directly with the insurance company - Is not subject to medical underwriting
Is issued a policy
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 employee would not be allowed to an HSA - The employer would pay payroll tax and FICA on the contribution amount - The employer would not be allowed to deduct the contribution from the employee's pay
It would be considered taxable income to the employee
A common exclusion with Vision plans is - Eyeglass frames - The examination - Contact lenses - Lasik surgery
Lasik surgery
The election of COBRA for continuation of health coverage will - Increase the coverage and lower premium - Maintain the same coverage and increase premium - Increase out-of-pocket costs and lower premium - Decrease out-of-pocket costs and maintain same premium
Maintain the same coverage and increase premium
An employer is issued a group medical insurance policy. This single contract is known as a(n) - Entire contract - Master policy - Certificate of coverage - Employer contract
Master policy
What is the contract called that is issued to an employer for a Group Medical Insurance plan? - Master policy - Certificate of coverage - Provisional policy - Document of coverage
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? - April 1 - April 6 - May 15 - May 30
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? - He's not eligible for Medicare - His group health plan and Medicare pay 50/50 - Medicare is the secondary payer - Medicare is the primary payer
Medicare is the secondary payer
Group health plans may deny participation based upon the - Member's claim history - Member's current age - Member's pre-existing condition - Member's part-time employment status
Member's part-time employment status
According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied? - There have been too many claims in the previous year - The size of the group has increased more than 10% - Participation or contribution rules have been violated - Participation or contribution rules been changed
Participation or contribution rules have been violated
Which of the following would evidence ownership in a participating health insurance contract? - Stock ownership - Irrevocable beneficiary status - Policy ownership - Collateral assignment
Policy ownership
Coordination of Benefits regulation applies to all of the following plans EXCEPT - Group vision plan - Preferred Provider Organization plans - Self-funded group health plan - Group health plan
Preferred Provider Organization plans
Health insurance involves two perils, accident and ___. - Death - Sickness - Disability - Liability
Sickness
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called - Contributory - Indemnity - Estoppel - Subrogation
Subrogation
Justin receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes? - Partially taxable income - Non-taxable income - Taxable income - Conditionally taxable income
Taxable income
Which of the following is typically NOT eligible for coverage in a group health policy? - Full-time employee - Temporary employee - Business owner - Partner in a partnership
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 - The amount contributed to the owner - The underlying account investments used - The medical expenses paid for by the HSA
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 a change of management has occurred within the group - When the annual number of claims has increased by 25% - When contribution or participation rules have been violated - When group participation has increased by 25%
When contribution or participation rules have been violated
When are group disability benefits considered to be tax-free to the insured? - When the recipient pays the premiums - When the employer pays the premiums - When both the employer and recipient pay the premiums - When benefits paid are equal to or lower than the recipient's salary
When the recipient pays the premiums
When are group disability benefits considered to be tax-free to the insured? - When the recipient pays the premiums - When the employer pays the premiums - When both the employer and recipients pay the premiums - When benefits paid are equal to or lower than the recipient's salary
When the recipient pays the premiums
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 benefits still owed can be claimed - employee cannot be excluded from the new employer's health plan - employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan - new health insurance carrier will have a clear record of any chronic conditions that exist
employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan
According to HIPAA, 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 - must wait 360 days to be eligible for coverage - must continue coverage with the previous employer - is eligible for only health insurance, not life or dental insurance
is eligible for only health insurance, not life or dental insurance
In an employer-sponsored group accident and health plan, a master contract is issued to the - TPA - Employees - Administrative services organization - Employer
Employer
Key Person Disability Insurance pays benefits to the - Hospital - Employee - Employer - Employee's creditors
Employer
Under the subrogation clause, legal action can be taken by the insurer against the - Responsible third party - Beneficiary - Policyowner - State
Responsible third party
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? - $100 - $250 - $500 - $1,000
$500
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of - Costs that exceed 7 ½% of AGI - Costs that exceed 10% of AGI - 100% of costs - no deduction permitted
100% of costs
How many employees must an employer have for a terminated employee to be eligible for COBRA? - 20 - 30 - 40 - 50
20
In an employer-sponsored contributory group Disability 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 - Employee has no tax liability - 40% of the benefit - 60% of the benefit - 100% of the benefit
60% of the benefit
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. - 45 - 63 - 75 - 90
63
Continued coverage under COBRA would be provided to all of the following EXCEPT: - Former dependent of employee no longer dependent status - Terminated employee - Divorced spouse of employee - A covered employee is terminated for gross misconduct
A covered employee is terminated for gross misconduct
HIPAA considers which of the following as "individually identifiable health information"? - A person's employment history - A person's net income - A person's hire date - A person's health claim 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? - Presumptive disability provision - Absolute accidental provision - Accidental death benefit provision - Accidental bodily injury provision
Accidental bodily injury provision
Which of the following does Coordination of Benefits allow? - Allows the secondary payor to reduce their benefits payments so no more than 100% of the claim is paid - Allows both a group health plan and individual health plan to coordinate their benefit payments - Allows the deductible to be spread out between all the health providers - Allows each health provider to pay 100% of the claims
Allows the secondary payor to reduce their benefits payments so no more than 100% of the claim is paid
Which of the following is INELIGIBLE to participate in a Section 125 Plan? - Key Employee in a C-Corp - Highly compensated employee in an S-Corp - A C-Corp Owner with a greater than 2% share - An S-Corp Owner with a greater than 2% share
An S-Corp Owner with a greater than 2% share
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must - Be less extensive and premium cannot exceed 102% - Be the same and the premium cannot exceed 102% - Be more extensive and the premium cannot exceed 102% - Be the same as well as premium
Be the same and the premium cannot exceed 102%
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled? - Disability overhead policy - Business continuation policy - Disability buy-sell policy - Business overhead expense policy
Business overhead expense policy
What is issued to each employee of an employer health plan? - Provision - Receipt - Policy - Certificate
Certificate
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) - Crossover - Conversion - Exchange - Extension of benefits
Conversion
Under group health insurance, a certificate of coverage is issued to the - Employer - Employee - Producer - Sponsor
Employee
The policyholder for a group health benefit plan is considered to be the - Employee - Employer - Liaison - Insurer
Employer
Which of the following would be considered a possible applicant and contract policyholder for group health benefits? - Human resource department - Employer - Insured employee - Insurance company
Employer
The limited period of time given to all members to sign up for a group health plan is called - Enlistment period - Sign-up period - Probationary period - Enrollment period
Enrollment period
A group Disability Income plan that pays tax-free benefits to covered employees is considered - Non-contributory - Partially contributory - Group contributory - Fully contributory
Fully contributory
A master contract and certificate of coverage can be found in which type of policy? - Long-term - Medicaid - Group - Medicare
Group
Credit Accident and Health plans are designed to - Permit creditors the ability to require that coverage be perchance through insurers of their choices - Provide permanent protection - Help pay off existing loans during periods of disability - Not permit free choice of coverage selection
Help pay off existing loans during periods of disability