Disability Income, Med Plans, Group Health Ins.
Which of the following would be a typical maximum benefit offered by a major medical plans?
$1 million
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?
$102
An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay
$2,800.
An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?
$5,000
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any would be paid by the secondary insurer?
$500
An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. The insured is hospitalized and sustains a $2,500 bill. What is the maximum amount that the insured will have to pay?
$900
What is the shortest possible elimination period for group short-term disability benefits provided by an employer?
0
An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1
What is the maximum period that an insurer would pay benefits in accordance with Additional Monthly Benefit rider?
1 year
In a non contributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?
100%
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?
100%
In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least
12 month
Which of the following disability income policies would have the highest premium?
15-day waiting period / 10-year benefit period
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
HIPAA applies to groups of
2 or more.
EVery small employer carrier must actively offer to small employers at least how many health benefit plans?
2 plans
Every small employer carrier must actively offer to small employers at least how many health benefit plans?
2 plans
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?
2 years
COBRA applies to employers with at least
20 employees.
What is a penalty tax for non qualified distributions from a health savings account?
20%
The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of
26.
In South Carolina an employee is considered eligible for the group coverage if they have a normal work week of at least how many hours?
30
What is the period of coverage for events such as death or divorce under COBRA?
36 months
What is the number of credits required of fully insured status for Social Security disability benefits?
40
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
50 or more.
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
South Carolina statutes require that an employee who loses group coverage for any reason other than nonpayment of premium may continue coverage under the group policy for
6 months.
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized?
65
If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect?
66 and 2/3%
Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This an example of
A contributory plan.
An insured wants to buy a disability income policy that pays a maximum monthly benefit of $1200. To make sure that the disability benefit keeps up with inflation, the insured would need to add
A cost of living rider.
Employers can reduce health plan costs by coupling a HRA with
A high deductible health plan.
How is emergency care covered for a member of an HMO?
A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.
Which of the following conditions would a disability income policy most likely NOT require in order to qualify for benefits?
A specified income status prior to the disability
Most health insurance policies exclude all of the following EXCEPT
Accidental injury
Most health insurance policies exclude all of the following EXCEPT
Accidental injury.
Which of the following individuals is eligible for a Health Savings Account?
Allison is insured by a High Deductible Health Plan (HDHP)
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?
Amanda is 67 and is covered by a basic medical expense policy
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who was previously covered by group health insurance for 6 months is eligible.
A man purchased a policy to provide coverage on himself, his wife, and their two children, a son and a daughter. All of them would need to prove insurability EXCEPT
Any children born to them after the inception of the contract.
In disability income insurance, if an insured is considered disabled if the cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
Any occupation
In South Carolina a child is considered covered as an adopted child or prospective adopted child:
As long as the insured has custody of the child and required premiums have been paid.
The classification "small employer" means any person actively engaged in a business that during the preceding year employed
At least 2 and not more than 50 persons.
All of the following can be insurers EXCEPT
Bankers
Group disability income benefits are
Base on the employee's income
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
Being age 65.
Which of the following would qualify someone for disability benefits?
Both accident and sickness
A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have?
Both subscriber and insured
In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is
Broader in general.
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?
COBRA
Which of the following is true regarding inpatient hospital care for HMO members?
Care can be provided outside of the service area.
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
Case management provision
A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?
Cash to the owner's business partner to accomplish a buyout
What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule?
Concurrent review
The gatekeeper of an HMO helps
Control specialist costs.
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?
Copayment
Which of the following terms describes a specific dollar amount of the cost of care that must be paid by the member?
Copayment
Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index?
Cost of living adjustment rider
After a year of receiving disability income benefits, the insured notices that her monthly benefit has increased slightly. What rider does the policy most likely have that would cause this?
Cost of living adjustment rider (COLA)
Which of the following is NOT true of basic medical expense plans?
Coverage for catastrophic medical expenses
As deductible amounts increase, premium amounts charge in what way?
Decrease
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as
Deductible.
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
A Waiver of Premium provision may be included with which kind of health insurance policy?
Disability Income
Which of the following statements about occupation vs. nonoccupational coverage is TRUE?
Disability insurance can be written as occupational or nonoccupational.
An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this?
Dread disease coverage
What is the goal of the HMO?
Early detection through regular checkups
Which of the following is NOT covered by Health Maintenance Organizations (HMOs)?
Elective services
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 probably written with a 30-day
Elimination period.
In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the
Elimination period.
All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT
Emergency surgery.
The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan changed?
Employers are no longer forced to offer HMO plans.
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged?
Experience rating
In disability income insurance, the own occupation definition of disability applies
For the first 2 years of a disability.
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?
Full benefits
Which of the following is another name for a primary care physician in an HMO?
Gatekeeper
How are HMO territories divided?
Geographic areas
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
Guaranteed
Which of the following is available to employers of all sizes?
HRAs
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
Has at least 50 members.
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
Health Maintenance Organization plan
To be eligible for a Health Savings Account, an individual must be covered by a
High-deductible health plan.
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT
Individual tax deduction for premiums paid.
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
Is not covered
What is the benefit of experience rating?
It allows employers with low claims experience to get lower premiums.
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants.
Which is true regarding HMO coverage?
It is divided into geographic territories.
Which of the following statements is NOT correct concerning the COBRA Act of 1985?
It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.
Which of the following is true of a PPO?
Its goal is to channel patients to providers that discount services.
Insurance that would pay for hiring a replacement for an important employees who becomes disabled is called
Key employee disability insurance.
Under workers compensation, which of the following benefits are NOT included?
Legal benefits
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT
Loss of one eye.
Which of the following is considered a presumptive disability under a disability income policy?
Loss of two limbs
All of the following are characteristics of a Major Medical policy EXCEPT
Low maximum limits
When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is
Lower
A health insurance plan which involves financing, managing, and delivery of health care services and involves a group of providers who share in the financial risk of the plan or who have an incentive to deliver cost effective service, is called
Managed care plan.
In group insurance, what is the policy called?
Master policy
Maximum benefits for a major medical plan are usually lifetime
Maximums.
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?
Medical Reimbursement Benefit
In order to be eligible for group health insurance, all of these are conditions an employee must meet EXCEPT
Must have dependents.
Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?
No, the group must be formed for a purpose other than obtaining group insurance.
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called
Nonoccupational coverage.
A husband and wife are covered under a group health insurance plan at his place of employment. When she gave birth to their first child. what must he do in order to have coverage for their child?
Notify the insurer within 31 days in order for coverage to continue without any evidence of insurability
A 55-year-old employee has worked part-time for his new employer for 3 month now, but has not been offered health insurance. What factor has limited the employee's eligibility?
Number of hours worked per week
A 55-year-old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility?
Number of hours worked per week.
If your health care plan has characteristics of an HMO and PPO, what type of plan do you have?
POS
Which of the following applies to partial disability benefits?
Payment is limited to a certain period of time.
Which of the following factors would be an underwriting consideration for a small employer carrier?
Percentage of participation
Which of the following occupations would have the lowest disability insurance premiums?
Personal Trainer
Any occupation disability typically means that an individual is unable to perform the duties of the occupation for which he/she is suited by all of these EXCEPT
Preference
What type of health care plan allows insureds to select a physician or hospital from a list of providers without being required to submit claim forms?
Preferred Provider Organization
A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?
Pregnancy will be covered immediately
All of the following are true regarding key person disability income insurance EXCEPT
Premiums are tax deductible as a business expense.
After the elimination period, a totally disabled insured qualified and started receiving benefits from his disability income policy that has a waiver of premium rider. What will most likely happen to the premiums paid into the policy during the elimination period?
Premiums will be refunded.
A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called
Prepaid plan.
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
Under which provision a physician submit claim information prior to providing treatment?
Prospective Review
When an insured combines two periods of disability into one, the insured must have suffered a
Recurrent disability.
Which of the following is NOT provided by an HMO?
Reimbursement
What provision can reduce the disability based upon the insured's current income?
Relation of earnings to insurance
What provision can reduce the disability benefit based upon the insured's current income?
Relation of earnings to insurance
The primary purpose of disability income insurance is to
Replace income lost due to a disability.
If a firm has between 2 and 50 employees that are actively engaged in business during the preceding calendar year, what is its classification?
Small employer
Workers Compensation benefits are regulated by which entity?
State government
Which of the following are responsible for making premium payments in an HMO plan?
Subscribers
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
Tax deductible
Which of the following would be a qualifying event as it relates to COBRA?
Termination of employment due to downsizing
Income benefits in a disability income policy are characterized by all of the following EXCEPT
The amount to be paid is unlimited.
All of the following are ways in which a Major Medical policy premium is determined EXCEPT
The average age of the group.
Which of the following is NOT a characteristic of a group long-term disability plan?
The benefit can be up to 50% of one's yearly income.
An insured receives individual disability income benefits. Which of the following describes the taxation status of the benefits that the insured receives?
The benefits are income tax-exempt.
What type of information is NOT included in a certificate of insurance?
The cost the company is paying for monthly premiums
The period of time immediately following a disability during which benefits are not payable is
The elimination period.
Under the continuation of coverage rule for South Carolina, who pays the premium during the continuation period?
The employee
If a business wants to buy a disability income policy on a key employee, which of the following is considered the applicant?
The employer
In a group policy, the contract is between
The employer and the insurance company.
How do employer contributions to a Health Savings Account affect the insured's taxes?
The employer contributions are not included in the individual insured's taxable income.
Who determines the eligibility and contribution limits in a HRA?
The employer determines both
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder.
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income.
In a disability policy, the elimination (or waiting) period refers to the period between
The first day of disability and the day the insured starts receiving benefits.
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. which of the following is true?
The group plan will not pay because the employee was injured at work.
In a group policy, who is issued a certificate of insurance?
The individual insured
Who chooses a primary care physician in an HMO?
The individual member
In which of the following cases would an "any occupation" disability income policy pay the benefits?
The insured is unable to perform any jobs in the field related to the insured's education and experience.
An insured has a social Insurance supplement rider in her disability income plan. Following a disability, she begins receiving benefit payments from the insurer. She then begins receiving Social Security benefits that are smaller than the SIS benefit payments. At that point, her insurer ends the SIS benefit payments. Which of the following best describes the situation?
The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the difference between the rider amount and the actual benefit.
An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true?
The insurer will issue a conditional coverage.
Who is the beneficiary in a credit health policy?
The lending institution
If a policy is rated-up, which of the following is true?
The premium increases
How does a member of an HMO see a specialist?
The primary care physician refers the member.
On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform
Their regular job.
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?
They are tax deductible.
Which of the following is NOT true regarding partial disability?
This a form of insurance that covers part-time workers.
Why do group health providers usually require a certain amount of participation in the plan by eligible employees?
To guard against adverse selection and reduce cost
Under a disability income policy, the insurer pays a monthly benefit that is less than the insured's income. What is the reason for that?
To prevent over utilization and malingering
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as
Usual, customary and reasonable.
An insured has been injured i an accident. although he is still receiving benefits from his disability income policy, he does not have to pay premiums. This means that the policy includes
Waiver of premium feature
All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT
When the employer chooses to renew the plan
When does a person qualify to receive disability-related income?
When the insured is unable to perform his/her job duties
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment?
Within 31 days of birth
Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from
Work-related disabilities
An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance?
Workers Compensation
Can an individual who belongs to a POS plan use an out-of-network physician?
Yes, and they may use any preferred physician, even if not part of the HMO