group 1 insurance exam ch14 TX Health State Laws
Which of the following is a method used by an HMO to compensate a physician or provider for providing a defined set of health care services and is based on a predetermined payment per enrollee: A Enrollment fee B Copayment C Capitation D Fee-for-service
C Capitation
Health Maintenance Organizations (HMOs) Health Maintenance Organization
Provides a health care plan to enrollees on a prepaid basis.
When soliciting Medicare supplement policies, agents may not misrepresent themselves as being affiliated with the _________.
federal government, Social Security, or the Medicare program
Any individual accident and health insurance policy providing coverage for an insured's dependent children must cover________ and may not limit or exclude coverage for _____n.
natural children - adopted childre
Long-term Care Insurance Qualified Long-term Care Insurance Contract - A long-term care insurance contract with benefits that are
not taxable.
Termination Due to Attaining Limiting Age The HMO may require the subscriber to furnish proof of the incapacity and dependency within _________________ of the child's attainment of the limiting age, but may not do so more frequently than on an___________
31 days annual basis.
A small employer carrier that offers coverage to a small employer and its employees must offer coverage to each eligible employee and each dependent of an eligible employee. An adopted child may be enrolled, at the insured's option, within _______ after either the _____________
31 days - insured sues to adopt the child or the adoption becomes final.
The initial enrollment period for subscribers and dependents must be at least 31 days, with a ______________________ period provided at least annually (every 12 months). A late enrollee may be excluded from coverage until the next open enrollment period.
31-day open enrollment
The following minimum benefit standards apply to Medicare supplement policies being advertised, solicited, or issued for delivery in this state: A Medicare supplement policy may not exclude or limit benefits for losses incurred more than _______________ from the effective date of coverage due to a preexisting condition
6 months
Marketing Standards Any Medicare supplement advertising must be submitted to the Department for approval at least____________before it may be used.
60 days
Coverage for newborns must begin: A At birth B After evidence of insurability is provided and the first premium is paid C 14 days after birth D 31 days after birth
A At birth Coverage for newborns must begin at birth for 31 days. For coverage to continue beyond 31 days the owner must pay the premium within 31 days of birth.
An enrollee may have coverage cancelled or nonrenewed by an HMO for which of the following? A Nonpayment of premium B Failing to quit smoking C Being diagnosed with heart disease D Excessive claims
A Nonpayment of premium
An insurer may only require HIV testing on a nondiscriminatory basis for all individuals in the same ______.
class
Entire Contract, Amendments This provision must state that the___________________________________ constitute the entire contract between the parties. To be valid, any change in the coverage form must be approved by an officer of the HMO and attached to the particular form. No agent has the authority to change the form or waive any of its provisions.
coverage form, applications, and any attachments
Guaranteed Issue Insurers may not: Deny or condition the issuance of a Medicare supplement policy if it is offered to, and available for, an ______ person
eligible
The following acts and practices are prohibited when marketing Medicare supplement insurance: High-pressure Sales Tactics
employment of any marketing method that induces or recommends the purchase of insurance coverage through the use of force, fear, threats, or undue pressure
A proposed insured may not be denied coverage or rated a substandard risk on the basis of a positive test result of HIV unless the ________________
established test protocol, approved by the FDA and compliant with state and federal laws, has been followed.
No ______________ may be issued, delivered, or used in Texas unless it has been filed for review and received approval of the Commissioner of Insurance.
evidence of coverage
HMOs in Texas must provide to every enrollee residing in this state an _________________ under a health care plan. The _____________ may be provided in writing or electronically. Each group, individual, and conversion contract and group certificate must contain certain provisions as required by the _________.
evidence of coverage evidence of coverage Commissioner
AIDS Testing Requirements Medical Examinations and Lab Tests Including HIV An insurer may ask questions relating to the proposed insured having acquired immune deficiency syndrome (AIDS) or AIDS-related complex, or testing positive on an AIDS-related test, as long as the questions are ______and designed to ___________
factual establish the existence of a medical condition.
Grace Period This provision must provide for a period of at least ________ for the payment of any premium falling due after the first premium during which the coverage remains in effect.
30 days
Each Medicare supplement policy must include a free look provision which states that the insured may return the policy within _________________ for any reason to receive a full premium refund.
30 days of its delivery
In the case of a material change by the HMO to any provisions required to be disclosed to contract holders or enrollees, a group or individual contract holder may cancel the contract after no less than _______________________________ to the HMO.
30 days' written notice
small employer health benefit plan requirements:
- A health carrier may require small employers to answer questions designed to determine the level of contribution by the small employer, the number of employees and eligible employees, and the percentage of participation of eligible employees of the small employer - An eligible employee does not include an employee who has not satisfied any applicable waiting or affiliation period. A waiting period may be established by the employer that cannot exceed 90 days - An open enrollment period must extend at least 31 consecutive days after the date the new entrant begins employment - The carrier must treat all similar small employer groups in a consistent and uniform manner when terminating plans due to a participation level of less than the qualifying amount - Availability of coverage is subject to minimum participation requirements; a small employer with only two eligible employees must have 100% participation. - Must provide plans without regard to factors related to health status (on a guaranteed issue basis)
The outline of coverage for LTC must be a freestanding document, not contain any advertising material, and include the following information:
- A policy designation stating the type of policy (i.e., individual or group) - The purpose of the outline of coverage (i.e., a brief description of some of the policy's important features) - The terms under which the policy or certificate may be returned and the premium refunded - A description of benefits provided by the policy, including covered services, deductibles, waiting periods, elimination periods, benefit maximums, institutional and non-institutional benefits by skill level, and eligibility for the payment of benefits - The policy's limitations and exclusions - The offer of all available nonforfeiture options, including the premiums and percentages of premium increases associated with each option and a disclosure that if the nonforfeiture options are rejected that a contingent benefit upon lapse will be provided - A disclosure regarding federal tax treatment of the long-term care insurance policy
Eligibility requirements must clearly be stated as follows:
- A subscriber must reside, live, or work in the service area and the legal residence of any enrolled dependents must be the same as the subscriber - The conditions under which dependent enrollees may be added - The evidence of coverage may not contain a provision excluding or limiting coverage for a newborn child - Newborn children are covered immediately at birth for the initial 31 days and the enrollee must be provided 31 days after the birth to notify the HMO of the addition of the newborn as a covered dependent - Benefits may be provided to an enrollee's dependent grandchild who is living in the same household - The limiting age applicable to an unmarried child or grandchild of the enrollee is age 25 and must be clearly stated
The following words and terms must be included in all Medicare Select policies, certificates, and plans of operation and must be defined as described in Texas Statutes:
- Complaint - Emergency care - Grievance - Medicare Select issuer - Medicare Select policy or Medicare Select Certificate - Network provider - Non-network provider - Service area
A group health benefit plan must provide coverage for the necessary care and treatment of chemical dependency by one of the following:
- Directly by the group health benefit plan issuer - Another entity, including a single service HMO, under contract with the group health benefit plan issuer
A health benefit plan issuer must renew any employer's health benefit plan, if the employer wishes to renew it, unless the employer:
- Hasn't paid the required premium - Has committed fraud or intentional material misrepresentation (an intentional misrepresentation must not include any health status related misrepresentation) - Hasn't complied with the plan's terms (premium contribution, group size, or participation requirements) - Has no enrollee who resides or works in the geographic service area - Terminates membership in an association, but only if coverage is terminated uniformly without regard to a factor related to a covered individual's health status
Required Health Policy Provisions Coverage for Newborns and Dependents A health benefit plan that provides maternity benefits or accident and health coverage for additional newborn children may not be issued in Texas if the plan excludes or limits:
- Initial coverage of a newborn child for a period of time - Coverage for congenital defects of a newborn child
Incontestability A statement may not be used in a contest to void, cancel, or non-renew an enrollee's coverage or reduce benefits unless:
- It is in a written enrollment application signed by the subscriber - A signed copy of the enrollment application is, or has been, furnished to the subscriber or the subscriber's personal representative
An HMO may cancel coverage for a subscriber in a group, as well as the subscriber's enrolled dependents, for the following reasons, which do not include factors related to health status:
- Nonpayment of amounts due under the contract - Subscriber does not reside, live, or work in the service area of the HMO, or in an area for which the HMO is authorized to do business
The following Basic (Core) benefits must be provided by all Medicare supplement policies or certificates issued in Texas:
- Part A Medicare eligible expenses for hospitalization for days 61-90 per benefit period for the amount not covered by Medicare - Part A Medicare eligible expenses incurred for hospitalization for each Medicare lifetime inpatient reserve day used for the amount not covered by Medicare - 100% of the Medicare Part A eligible expenses for hospitalization for 365 additional days after the lifetime reserve days have been exhausted - The reasonable cost of the first 3 pints of blood under Medicare Parts A and B - Coinsurance amounts of Medicare eligible expenses under Part B after the deductible is met
Minimum standards for individual and group Medicare supplement insurance have been established to:
- Provide for the reasonable standardization of coverage and simplification of terms and benefits - Facilitate public understanding and comparison of such policies - Eliminate policy provisions that may be misleading or confusing with respect to the purchase of coverage or the settlement of claims - Provide for full disclosure in the sale of accident and sickness insurance persons eligible for Medicare
If a proposed insured is required to take an HIV-related test to detect the AIDS virus as part of the application process, the insurer must:
- Provide written notice to the proposed insured or parent/legal guardian of proposed insured - Obtain written authorization/consent of the proposed insured or parent/legal guardian on the Notice and Consent for HIV-Related Testing form
Any Medicare supplement advertising must be submitted to the Department for approval at least 60 days before it may be used. Marketing procedures must be established to ensure that:
- The policy comparisons made by the issuer's agents are fair and accurate - Excessive insurance is neither sold nor issued - All prospective policyholders are advised before applying for coverage that the basic (core) benefit package is available; they must also be provided with an explanation of its contents - Every reasonable effort is made to identify if an applicant for a Medicare supplement already has accident and sickness insurance and the types and amounts of coverage
Minimum Standards for Long-term Care Policy Renewability Guaranteed renewability describes a policy in which:
- The policyholder has the right to continue the policy when making timely premium payments - The insurer does not have any unilateral right to change any provision or rider while the insurance is in force - The insurer cannot non-renew the policy; however, it may revise rates if doing so for every policyholder within a class
Written authorization of the release of HIV test results is limited to:
- The proposed insured, or the person legally authorized to consent to the test - A licensed physician or other person designated by the insured - An insurance medical information exchange that uses generic codes to assure confidentiality and may prepare statistical reports that do not disclose the identity of any particular insured - Persons within the insurer's organization responsible for making underwriting decisions on behalf of the insurer
Certificate of Coverage An insurance company that issues life insurance or accident and health benefits to individuals on a mutual assessment plan, or whose funds derive from assessments on certificate holders or members, must meet certain requirements regarding certificates of coverage, which serves as proof of insurance. An insurance certificate issued by an association must include_____________________________. A certificate in force for _______ becomes incontestable, except for nonpayment of dues or assessments, on the ____________. A certificate must include a plain statement of each __________ and the t_________
- any condition of the certificate that affects the insurance rights of the covered parties in any material way - two years - second anniversary of the date of issuance - accident, health, or other benefit covered - terms under which the benefit is paid.
Long-term Care Insurance- An insurance policy that provides coverage for not less than ____consecutive months for each covered person on an ____ or other basis for one or more necessary or medically necessary services of the following types, administered in a setting other than an acute care unit of a hospital:
12 expense-incurred, indemnity, prepaid, per diem diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative, maintenance, or personal care.
A small employer is a person who employed an average of ___________ on business days during the preceding calendar year, and who employs _________ employees on the first day of the plan year.
2-50 employees at least two
Agent Compensation Insurers issuing Medicare supplement policies may provide a commission to an agent for the sale of a Medicare supplement policy only if the first year commission is no more than _____% of the commission paid for the renewal commission in the 2nd year.
200
Health Maintenance Organizations (HMOs) Evidence of Coverage
A certificate or agreement issued to an enrollee that states the coverage in which the enrollee is entitled.
Health Maintenance Organizations (HMOs) Capitation
A method used by an HMO to compensate a physician or provider for providing a defined set of health care services and is based on a predetermined payment per enrollee and not the quantity of services actually provided.
Level Premium Long-term Care Policy
A non-cancellable long-term care policy.
If an insurer requires an individual to be tested for the AIDS virus, all of the following are required, if applicable, except: A Obtain notice of the requirement to test and written authorization from a parent or guardian of a proposed insured B Gather statistical information that identifies the applicant to share with other insurers C Written authorization from the applicant on a Notice of Consent form D Notice to the proposed insured of the requirement prior to testing
B Gather statistical information that identifies the applicant to share with other insurers
A long-term care policy issued in Texas must, at a minimum, be offered as: A Noncancellable B Guaranteed renewable C Optionally renewable D Conditionally renewable
B Guaranteed renewable
All Medicare supplement policies must offer coverage for all of the following, except: A The reasonable cost of the first 3 pints of blood B Physicians' services C Disability income D Hospitalization
C Disability income Medicare supplement policies provide coverage for medical services from a physician or hospital. They do not provide income for losses from a disability.
All of the following regarding Evidence of Coverage are correct, except: A Health care services and benefits available must be stated B The name, address, and phone number of the HMO must be included C The evidence of coverage must be delivered in writing D Approval by the Commissioner of Insurance is required before delivery
C The evidence of coverage must be delivered in writing The evidence of coverage may be delivered in writing or electronically.
Required Disclosures An insurer must deliver a copy of the ________________________________ with each policy and obtain the insured's acknowledgement that the policy was received.
Guide to Health Insurance for People with Medicare (produced by the NAIC)
Health Maintenance Organizations (HMOs) Basic Health Care Services
Health care services that the Commissioner determines a person might reasonably need to be maintained in good health.
Health Maintenance Organizations (HMOs) Enrollee
Individual enrolled in a health care plan and includes dependents.
Long-term Care Partnership Insurance Policy - Policy provides access to __________ under special eligibility rules if additional LTC coverage be needed beyond what the policy provides.
Medicaid
The following minimum benefit standards apply to Medicare supplement policies being advertised, solicited, or issued for delivery in this state: Limitations or exclusions on coverage may not be more restrictive than those of _________
Medicare
The following minimum benefit standards apply to Medicare supplement policies being advertised, solicited, or issued for delivery in this state: Benefits that are designed to cover cost-sharing amounts under Medicare must automatically change to coincide with any changes in the applicable ______________________
Medicare deductible, copayment, or coinsurance amounts (premiums may be modified to correspond with changes)
In the case of a material change by the HMO to any provisions required to be disclosed to contract holders or enrollees, a group or individual contract holder may cancel the contract after no less than 30 days' written notice to the HMO. An HMO may cancel an individual contract for the following reasons:
Nonpayment of premiums in accordance with the terms of the contract, including any timeliness provisions; coverage may be cancelled without written notice Where the subscriber does not reside, live, or work in the service area of the HMO, or in an area for which the HMO is authorized to do business:
The _________________________________ must explain grievance procedures and any provision allowing a premium refund if the insured dies. must be provided to all applicants at the time of application and an acknowledgment of receipt must be obtained.
Outline of Coverage
When taking an application for a Medicare supplement policy, an agent must provide the applicant with a(n): A Outline of Coverage B Summary of Benefits C Copy of the agent's insurance license D Certificate of Authority
The Outline of Coverage must be provided to all applicants at the time of application and an acknowledgment of receipt must be obtained.
The following acts and practices are prohibited when marketing Medicare supplement insurance:
Twisting High-pressure Sales Tactics Cold lead Advertising
A small employer health insurer may not offer coverage to an eligible employee unless the employee has: A Been eligible for at least 6 months B Paid 100% of the first year's premium to the employer C Satisfied the applicable waiting period D Satisfied a pre-existing condition waiting period of 6 months
The health insurer may not offer coverage to an eligible employee until they have satisfied the applicable waiting period, which cannot exceed 90 days.
Upon enrollment in small employer carrier, new entrants must be accepted for coverage without any restrictions or limitations based on __________
an illness or accident, medical treatment, or medical condition.
Exclusions and Limitations This provision must set forth any exclusions and limitations that pertain to ________________- health care services.
basic, limited, or single
The evidence of coverage must include all the health care services and other benefits available to enrollees under the _________________ health care service plan. It must also state any limitations on _________________
basic, limited, or single - services and benefits, including any deductible or copayment feature.
Deductibles - A deductible is the specific dollar amount for the cost of ____________________ health care service paid by the enrollee, in addition to any ____________ paid. The HMO may only charge a deductible for services that are_________________________. The HMO must state the deductible in the_______________
basic, limited, or single premiums actually performed outside the HMO's service area or by a physician or provider not in the HMO's provider network group, individual, or conversion certificate.
Health coverage for newborn infants must begin at _____ and continue for at least _____. An insurer may require the policyholder to notify the insurer of the birth of the newborn child, and pay __________ required to maintain the coverage in force before coverage continues beyond the______ period.___________ for the initial period of coverage may be charged.
birth 31 days any additional premium 31-day Any additional premium required
Immunizations - HMOs are not permitted to charge a deductible or copayment for immunizations provided to children from ____________________________. An exception exists for a ________________________; these types of plans may charge a deductible or copayment for a child's immunizations.
birth until a child's sixth birthday small employer health benefit plan
Incontestability An individual contract may only be contested because of ____________________________________________________________________
fraud or intentional misrepresentation of material fact made on the enrollment application
Minimum Standards for Long-term Care Policy Renewability No long-term care policy issued in this state may contain renewal provisions less favorable to the policyholder than __________________________________. In other words, a long-term care policy issued in this state must be, at a minimum, ________
guaranteed renewability or noncancelable guaranteed renewable.
Every Medicare supplement policy must be issued a ____ ______ basis.
guaranteed renewable
Small Group Health Insurance Guaranteed Issue A small employer carrier must issue a ________________ to any small employer that elects to be covered under the plan and agrees to satisfy the requirements of the plan factors.
health benefit plan
Cancellation No Medicare supplement policy or certificate may be canceled or nonrenewed based solely on the ___________. An issuer cannot cancel or nonrenew a policy for any reason other than __________________________
health status of the insured - nonpayment of policy premium or material misrepresentation.
Guaranteed Issue Insurers may not: Discriminate in the pricing of a Medicare supplement policy because of
heath status, claims experience, receipt of healthcare, or medical condition
Termination Due to Attaining Limiting Age This provision must state the coverage will not be terminated due to a child's attainment of a limiting age if the child is __________________________________________________________________
incapable of self-sustaining employment due to mental retardation or physical disability, and is chiefly dependent upon the subscriber for support and maintenance.
An outline of coverage must be delivered to an applicant for an individual or group LTC insurance policy or certificate at the time of _______________________.
initial solicitation
The following minimum benefit standards apply to Medicare supplement policies being advertised, solicited, or issued for delivery in this state: A policy may not indemnify against losses resulting from sickness on a different basis than_______________
losses resulting from accidents
A cancellation or non-renewal notice must specify the grounds for cancellation or non-renewal of coverage, along with the ____________________________
minimum notice period that will apply.
Suitability When recommending the purchase or replacement of any Medicare supplement policy, an agent must make reasonable efforts to determine the appropriateness of such a purchase or replacement. The sale of a Medicare supplement policy that will provide an individual with _______________ is prohibited. An insurer may not issue a Medicare supplement policy to an individual who is enrolled in _________ unless the effective date of the Medicare supplement coverage is after the termination date of the individual's ____________coverage.
more than one Medicare supplement policy Medicare Part C Medicare Part C
The evidence of coverage must include the ________________ of the HMO. A __________________, as defined in insurance code, must appear on the face page of the contract or certificate.
name, address, and phone number toll-free number
Coverage for drug and alcohol treatment cannot be provided on a less favorable basis than coverage is generally provided for _________under the plan. Coverage must be subject to the same limits with respect to ____________factors that apply to coverage generally provided for ______ under the plan.
physical illness duration, dollar amounts, deductibles, and coinsurance physical illness
A Medicare Select issuer must have and use procedures for hearing complaints and resolving written grievances. These procedures must be described in each __________ and must be reported annually to the Commissioner by _______. At an insured's request, the issuer must give the insured the opportunity to purchase any _________ or certificate it offers that has comparable or lesser benefits and does not restrict the network.
policy, certificate, and Outline of Coverage March 31 Medicare supplement policy
The following acts and practices are prohibited when marketing Medicare supplement insurance: Twisting
practice of knowingly making a misleading representation or incomplete or fraudulent comparison of any policies or insurers to induce any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, convert, or borrow against a policy or to take out a policy with another insurer
Guaranteed Issue Insurers may not: Impose a _______________exclusion
pre-existing condition
Copayments - A copayment is a charge, in addition to an enrollee's _____________, to supplement payment for health care services. The copayment may be expressed as ________________________. The HMO must state the copayment in the ___________________ certificate.
premium a dollar amount or a percentage of the contracted rate (not to exceed 50%) group, individual, or conversion
The first page of a Medicare supplement policy must state the ___________________ provision, the insurer's ________________, and any __________________ based on the age of the insured. Policy riders and endorsements must state any additional __________ associated with their issue and be signed by the ____________ to be valid. An exception exists if a rider or endorsement is _______________________________________________
renewal or continuation reservation of the right to change premiums (if any) automatic renewal premium increases premium policyholder required by law or provides a service at the policyholder's request.
Incontestability This provision must explain that all statements made by the subscriber on the enrollment application will be considered _____________________________
representations and not warranties.
HIV test results must be confidential. The insurer may not release or disclose the results unless r_____________________
required by law or authorized in writing by the proposed insured or person legally authorized to consent to the test on behalf of the insured.
Eligibility requirements must clearly be stated as follows: - A subscriber must reside, live, or work in the ____________ and the legal residence of any enrolled dependents must be the same as __________________
service area the subscriber
Long-term Care Insurance Preexisting Condition - A condition for which medical advice was given or treatment was recommended by, or received from, a physician within ____
six months before the effective date of coverage.
A group health benefit plan may establish coverage limits for duration or dollar amounts that are less favorable than for coverage generally provided for physical illness if those limits are __________________________
sufficient to provide appropriate care and treatment under the guidelines and standards of the Texas Commission on Alcohol and Drug Abuse.
A Medicare Select issuer must have its plan of operation approved by __________ before issuing a policy or certificate. Proposed changes to an issuer's plan of operation, except those to the network providers list, must be filed with the _________ _________ before they are implemented. An ________________ must be filed with the Commissioner at least quarterly.
the Commissioner Commissioner 60 days updated list of network providers
Chemical dependency, as it applies to health insurance, is defined as
the abuse of, a psychological or physical dependence on, or an addiction to alcohol or a controlled substance.
The delivery of the outline of coverage for an individual or group LTC insurance policy or certificate must be conducted by means that direct the attention of the recipient to ___________
the document and its purpose in a prominent manner.
When agents solicit LTC coverage, the outline of coverage must be delivered prior to _______________________. In the case of direct-response solicitations by the insurer, the outline of coverage must be delivered in conjunction with ____________________________
the presentation of an application or enrollment form any application or enrollment form.
If an HIV test result is positive, the insurer must notify, in writing, a physician designated by __________ or, if one is not designated, insurer will notify the ________________
the proposed insured Texas Department of Health (not the Texas Department of Insurance).
Each applicant must receive a full and fair written disclosure of _____________________ of each Medicare Select policy or certificate. The ____________signed receipt and acknowledgement of understanding must be obtained before an issuer may sell a Medicare Select policy or certificate.
the provisions, restrictions, and limitations applicant's
Incontestability The statements are considered to be ______________________________
truthful and made to the best of the subscriber's knowledge and belief
The following acts and practices are prohibited when marketing Medicare supplement insurance: Cold lead Advertising
use of any marketing method that fails to disclose in an obvious manner that its purpose is to solicit insurance and that contact will be made by an insurance company or agent (other regulatory definitions of "cold lead advertising" also exist)
A Medicare supplement policy may not describe benefit payments as _____________ and __________.
usual customary
If a Medicare supplement policy replaces another Medicare supplement policy, the replacing insurer must waive any times periods applicable to pre-existing condition ________________________ to the extent time has expired under the original policy.
waiting periods, elimination periods, and probationary periods
Minimum Standards for Long-term Care Policy Renewability The policyholder has the right to cancel a long-term care contract ________________________ and the insurer must return any ________________ to the policyholder.
without required notice of cancellation unearned premium
