Health - Group insurance - Practice Questions
Under the Civil Rights Act, if 41-year-old Jared applies to be a Union foreman, for which of the following reasons could Jared be denied employment? A) Religion B) Age C) National Origin D) Disability
D) Disability Employment cannot be denied on the basis of religion, sex, pregnancy, childbirth, or pregnancy-related conditions, age, national origin, or disability in those certain instances where religion, sex, pregnancy, childbirth, or pregnancy-related conditions, age, if the individual is 40 years of age or older, national origin, or disability is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise.
The Pregnancy Discrimination Act specifically prohibits pregnancy discrimination by employers with the minimum of how many employees? A) 15 B) 30 C) 45 D) 100
A) 15 Correct! Employers with 15 or more employees are prohibited from pregnancy discrimination.
Every small employer carrier shall, as a condition of transacting business in this state with small employers, actively offer to small employers at least how many health benefit plans? A) 2 B) 5 C) 10 D) 25
A) 2 Correct! One plan offered by each small employer carrier shall be a basic health benefit plan, and one plan shall be a standard health benefit plan.
Employees actively at work on the date coverage is transferred to another insurance carrier are A) Automatically covered and exempt from any probationary period. B) Automatically covered but subject to a probationary period. C) Covered after a three month waiting period. D) Subject to pre-existing conditions.
A) Automatically covered and exempt from any probationary period. Correct! Employees actively at work on the date coverage is transferred to another insurance carrier are automatically covered under the new plan, and they are exempt from any probationary period. Employees not actively at work on the date coverage is transferred must be included in the new plan, but their benefits can be limited to the prior plan's level until they return to work.
If the head of the Department of Insurance has ruled a group can apply for group health insurance, it is considered a A) Discretionary group. B) State-sponsored eligible group. C) Trust. D) Customer group
A) Discretionary group. Correct! A discretionary group is one that the head of the Department of Insurance decides will be eligible for group health insurance.
J is covered under 2 group health insurance plans, his own and his wife's. After a loss, he submitted a claim to both plans. After 30 days, the plans still have not agreed on the order of the benefits to be paid. Which of the following needs to happen immediately? A) Each plan must pay the benefit in equal shares. B) The claim will be turned over to the Department of Insurance. C) Since the primary plan hasn't paid, the secondary plan is obligated to pay the benefit in full. D) The Commissioner will order the primary plan to pay the benefit in full.
A) Each plan must pay the benefit in equal shares. Correct! If plans cannot agree on the order of benefits within 30 days of the receipt of all necessary claim information, these plans will immediately pay the claim in equal shares.
The main purpose of ERISA is to ensure that A) Employees receive the pension and other benefits promised by their employers. B) Employees are able to extend group health coverage after termination of employment. C) Uniform policy terms and provisions are established for all insurers in all states. D) High quality care is available to all insured. It
A) Employees receive the pension and other benefits promised by their employers.
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT: A) Has at least 50 members. B) Has a constitution and by-laws. C) Holds annual meetings. D) Is contributory.
A) Has at least 50 members. All of the above characteristics would make an association group eligible for buying group insurance, except the group must have at least 100 members.
What is the benefit of experience rating? A) It allows employers with low claims experience to get lower premiums. B) It helps employers with high claims experience to get group coverage. C) It helps employees with low claims experience to become exempt from group premiums. D) It allows employers with high claims experience to obtain insurance
A) It allows employers with low claims experience to get lower premiums. Correct! Group health insurance is usually subject to experience rating where the premiums are determined by the experience of this particular group as a whole. Experience rating helps employers with low claims experience because they get lower premiums.
When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is A) Lower. B) Higher. C) Comparable. D) Equal.
A) Lower. Correct! The per capita administrative cost in group health insurance is less than the administrative cost found in individual coverage.
All of the following statements describe a MEWA EXCEPT: A) MEWAs are groups of at least 3 employers. B) MEWAs can be sponsored by insurance companies. C) MEWA employers retain full responsibility for any unpaid claims. D) MEWAs can be self-insured.
A) MEWAs are groups of at least 3 employers. Correct! MEWAs are groups of at least 2 employers who pool their risks to self-insure. MEWAs can be sponsored by an insurance company, an independent administrator, or another group established to provide group benefits for participants.
When a carrier decides to discontinue a health insurance plan for a small employer, the carrier is required to do which of the following? A) Provide a written notice of plan cancellation to the employer and all insured 90 days prior to cancellation B) Provide a notice of plan discontinuation to the employer, the insured and the Commissioner at the same time C) Provide a notice of plan discontinuation to the Commissioner at least 10 days prior to cancellation D) Provide a written notice of plan discontinuation to the employer only at least 30 days prior to cancellation
A) Provide a written notice of plan cancellation to the employer and all insured 90 days prior to cancellation Correct! A small employer health benefit plan may be discontinued if the carrier provides notice of the discontinuation to each plan sponsor and insured at least 90 days before the coverage will be discontinued; and a notice to the Commissioner at least 3 working days prior to date the notice is sent to sponsors and insureds.
Which of the following is true regarding reinstatement of insurance coverage that lapsed due to the insured's being on active duty in the U.S. armed forces? A) The coverage will be reinstated if applied for within 6 months of release from active duty. B) Coverage cannot be reinstated; lapsed policies get terminated permanently. C) Coverage will be automatically reinstated. D) The coverage will be reinstated after a waiting period.
A) The coverage will be reinstated if applied for within 6 months of release from active duty. Correct! Insurers may not refuse to reinstate an insured or any dependents whose coverage lapsed due to the insured's mobilization into the United States armed forces - provided an application is made within 180 days of release from active duty. If this provision is followed, the reinstated policy will not have a waiting period or exclude any pre-existing conditions
In a group policy, the contract is between A) The employer and the insurance company. B) The individual and the insurance company. C) The employer and the union. D) The employee and the employer.
A) The employer and the insurance company. Correct! In a group policy, the contract is between the insurance company and the group sponsor (such as employer, union, trust, or other sponsoring organization
A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim, A) The insurance through his company is primary. B) The insurance through his wife's company is primary. C) The insurance plans will split the coverage evenly. D) Both plans will pay the full amount of the claim.
A) The insurance through his company is primary. Correct! The policy that covers the person filing the claim will be considered the primary policy.
What is the purpose of Utah Mini-COBRA? A) To allow eligible employees to extend their group coverage upon termination of employment B) To provide coverage for employees and their dependents C) To provide coverage for pre-existing conditions D) To allow employers maintain low-cost health insurance plans
A) To allow eligible employees to extend their group coverage upon termination of employment Correct! Utah Mini-COBRA allows the employees to extend coverage under the group policy for 12 months after employment termination.
Which of the following is considered a qualifying event under COBRA? A) Promotion B) Divorce C) Marriage D) Relocation
B) Divorce Correct! Other qualifying events include the voluntary termination of employment; an employee's change from full time to part time; or the death of the employee.
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? A) $0 B) $500 C) $1,000 D) $2,000
B) $500 Correct! Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.
How long is the open-enrollment period under an employer group health insurance plan? A) 15 days B) 30 days C) 60 days D) 90 days
B) 30 days Correct! A 30-day open-enrollment period is available once a year to employees who reject coverage during the initial enrollment period and later wish to have coverage or to add dependent coverage.
The Coordination of Benefits provision in Utah requires that both primary and secondary plans pay the benefit in equal shares if the plans cannot agree on the order of payment within how many days after receiving the claim information? A) 10 days B) 30 days C) 60 days D) 90 days
B) 30 days Correct! If plans cannot agree on the order of benefits within 30 days of the receipt of all necessary claim information, these plans will immediately pay the claim in equal shares. However, in these instances, no plan will be required to pay more than its policy limits.
What is the period of coverage for events such as death or divorce under COBRA? A) 12 months B) 36 months C) 60 days D) 31 days
B) 36 months Correct! The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.
Under a small employer group health insurance plan, how long can pre-existing conditions be excluded from coverage for a given certificate holder? A) 3 months B) 6 months C) 1 year D) 14 months
B) 6 months A health benefit plan for small employer may impose a pre-existing condition exclusion if it relates to a pre-existing condition for which medical advice, diagnosis, care or treatment was recommended 6 months prior to enrollment.
Under the Age Discrimination in Employment Act, retiree health benefits offered to employees under the age of 65 must value A) At least $10,000. B) At least the same benefit amount offered by Social Security. C) The minimum established by similar employers. D) One-fourth of the benefit amount required under the Social Security Act.
B) At least the same benefit amount offered by Social Security. Retiree health benefits provided by an employer must at least be equal in value to benefits provided under the Social Security Act for the retirees below age 65, and at least one-fourth the value of Social Security benefits for the retirees age 65 or older.
Which of the following options best depicts how the eligibility of members for group health insurance is determined? A) In such a manner as to establish individual selection as to the amounts of insurance B) By conditions of employment C) Eligibility is not determined, but simply accepted D) By the physical conditions of the applicants at the time of employment
B) By conditions of employment The individual employer normally must provide insurance coverage to all full-time employees. The employer can specify within some limitations how many hours are considered full time, and whether both salaried and hourly employees will be covered. The employer can also legally exclude a particular group of employees from the eligible class of employees.
As it pertains to group health insurance, COBRA stipulates that A) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. B) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. C) Retiring employees must be allowed to convert their group coverage to individual policies. D) Terminated employees must be allowed to convert their group coverage to individual policies.
B) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.
To be eligible for group health insurance, an employee must meet all of these are conditions EXCEPT A) Be a full-time employee. B) Have dependents. C) Be working in a covered classification. D) Be actively at work.
B) Have dependents. Correct! Employer group health insurance generally requires that to be eligible for coverage an employee must be a full-time employee, working in a covered classification, and must be actively at work.
Welfare benefits include all of the following EXCEPT A) Workers compensation. B) Holiday pay. C) Day care benefits. D) Health care benefits.
B) Holiday pay. All forms of health care, life insurance, prepaid legal services, and disability insurance (both long- and short-term) are considered "employee welfare benefit" plans. Unfunded benefits or payroll practices, such as vacation, holidays, overtime premiums, holiday gifts, and compensation paid for time not worked are not included.
Which of the following statements is NOT correct concerning the COBRA Act of 1985? A) COBRA stands for Consolidated Omnibus Budget Reconciliation Act. B) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. C) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. D) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees.
B) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. COBRA Act applies to only employers with 20 or more employees.
In a group policy, who is issued a certificate of insurance? A) The employer B) The individual insured C) The health care provider D) The insurance company
B) The individual insured The individuals covered under a group insurance contract are issued certificates of insurance. The certificate tells what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.
Which of the following is true regarding METs? A) They provide insurance companies with medical information on applicants. B) They allow several small employers purchase less expensive insurance together. C) They make deals with local hospitals to provide low cost coverage to the needy. D) They provide insurance for larger corporations.
B) They allow several small employers purchase less expensive insurance together. Correct! Those small employers who cannot qualify for group health insurance band together for the purpose of buying insurance.
The maximum number of employees that a small employer can have is A) 25 B) 30 C) 50 D) 100
C) 50 Correct! In this state, the term "small employer" refers to any employer with an average of between 2 and 50 eligible employees on each business day during the preceding calendar year, and at least 2 employees on the first day of the plan year.
In the event of a divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months? A) HIPAA B) Social Security C) COBRA D) MSA
C) COBRA Correct! Dependents of employees are eligible to receive group health insurance under the employee's plan. If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months.
In group insurance, what is the policy called? A) Certificate of authority B) Certificate of insurance C) Master policy D) Entire contract
C) Master policy Correct! In group insurance the policy is called the master policy and is issued to the policyowner, which could be the employer, an association, a union, or a trust.
Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage? A) Yes, any group can apply for group coverage. B) Yes, but only if the group is over 35 people. C) No, the group must be formed for a purpose other than obtaining group insurance D) No, a group of individuals cannot apply for group coverage unless represented by an association or trust.
C) No, the group must be formed for a purpose other than obtaining group insurance. Correct! In order to qualify for group coverage, the group must be formed for a purpose other than obtaining group insurance; the coverage must be incidental to the group.
Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage? A) Yes, any group can apply for group coverage. B) Yes, but only if the group is over 35 people. C) No, the group must be formed for a purpose other than obtaining group insurance. D) No, a group of individuals cannot apply for group coverage unless represented by an association or trust.
C) No, the group must be formed for a purpose other than obtaining group insurance. Correct! In order to qualify for group coverage, the group must be formed for a purpose other than obtaining group insurance; the coverage must be incidental to the group.
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? A) Age B) Income C) Number of hours worked per week D) The total amount of time worked for the company
C) Number of hours worked per week Correct! In order to be eligible for group health insurance through an employer, an employee must typically work full-time and must have devoted one to three months of service. In this case, the employee has been with the employer long enough, but he does not work enough hours per week.
What is it called when a company engages in the same types of activities as a commercial insurer in dealing with its own risks? A) Corporate insurance B) Group insurance C) Self-insurance D) Association
C) Self-insurance Correct! Under some circumstances, it is possible for a business or other organization to engage in the same types of activities as a commercial insurer dealing with its own risks. When these activities involve the operation of the law of large numbers and predictions regarding future losses, they are commonly referred to as self-insurance.
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? A) Each plan will pay in equal shares. B) The insured will have to select a plan from which to collect benefits. C) The benefits will be coordinated. D) Neither plan would pay.
C) The benefits will be coordinated. Correct! Benefits will be coordinated when individuals are covered under two or more health plans.
What is the purpose of the ADEA? A) To promote employment of minorities B) To allow leave to employees for family needs C) To prohibit age discrimination in employment D) To ensure employees receive pension and other benefits
C) To prohibit age discrimination in employment Correct! The Age Discrimination in Employment Act of 1967 serves to promote employment of older persons based on their ability rather than age, to prohibit arbitrary age discrimination in employment; to help employers and workers, and to find ways of meeting problems arising from the impact of age on employment.
What is the purpose of COBRA? A) To provide health coverage for people with low income B) To protect the insureds against insolvent insurers C) To provide continuation of coverage for terminated employees D) To provide coverage for the dependents
C) To provide continuation of coverage for terminated employees Correct! The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.
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? A) $25 B) $25.50 C) $100 D) $102
D) $102 Correct! The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.
Under Utah Mini-COBRA, eligible employees may extend their group coverage for A) 30 days. B) 3 months. C) 6 months. D) 1 year.
D) 1 year. Correct! Utah Mini-COBRA allows the employees to extend coverage under the group policy for 12 months, or 1 year. The right to extend coverage includes voluntary and involuntary termination, retirement, sabbatical or leave of absence, reduction of hours, divorce or legal separation, loss of dependent status, disability or death.
An insured was mobilized into the U.S. armed forces, which caused his health insurance policy to lapse due to nonpayment of premium. When he was released from active duty 5 months later, he wanted to reinstate his insurance policy. How many days does the insured have to apply for reinstatement of the same coverage? A) 30 days B) 90 days C) 100 days D) 180 days
D) 180 days Correct! Insurers may not refuse to reinstate an insured or any dependents whose coverage lapsed due to the insured's mobilization into the United States armed forces - provided an application is made within 180 days of release from active duty.
COBRA applies to employers with at least A) 80 employees. B) 60 employees. C) 50 employees. D) 20 employees.
D) 20 employees. Correct! Under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), any employer with 20 or more employees must extend group health coverage to terminated employees and their families.
In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits? A) 7 days B) 10 days C) 30 days D) 60 days
D) 60 days Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment. Incorrect! Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment.
Which of the following are unlawful with regard to the ADEA? A) Refusing to hire any individual because of the individual's age. B) Classifying employees in any way which would deprive any individual of employment opportunities or otherwise adversely affect his status as an employee because of the individual's age. C) Reduce the wage rate of any employee in order to comply with the ADEA. D) All of the above are unlawful.
D) All of the above are unlawful. Correct! The Age Discrimination in Employment Act of 1967 serves to promote employment of older persons based on their ability rather than age. Therefore, all of the above would be illegal.
According to Utah Mini-COBRA, which of the following would NOT qualify for extended coverage of a group health insurance plan? A) A dependent spouse divorced from the eligible employee B) An employee who took a leave of absence C) An employee who was involuntarily terminated D) An employee who became eligible for a similar coverage
D) An employee who became eligible for a similar coverage Utah Mini-COBRA allows the employees to extend coverage under the group policy for 12 months. The right to extend coverage includes voluntary and involuntary termination, retirement, sabbatical or leave of absence, reduction of hours, divorce or legal separation, loss of dependent status, disability or death. If the employee becomes eligible for another, similar coverage, his or her extended coverage will be terminated.
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged? A) District rating B) Community rating C) Individual rating D) Experience rating
D) Experience rating Correct! The actual loss experience of the group, in part, determines the rates charged by the insurer.
When can a small employer health benefit plan be discontinued by the carrier? A) Only on the policy anniversary date B) Whenever there is a misrepresentation on the policy application C) Under no circumstances: only plan sponsors may discontinue a plan D) If the plan sponsor fails to pay premiums
D) If the plan sponsor fails to pay premiums Correct! A small employer health benefit plan is renewable with respect to all eligible insureds at the option of the plan sponsor. However, a plan may be discontinued if the sponsor fails to pay the premiums, makes material misrepresentations or commits fraud.
If an employer provides health insurance for its employees, which of the following is true regarding pregnancy coverage? A) It can be excluded. B) It must be considered a disability. C) It can be grounds for requiring the employee to take leave. D) It must be covered to the same extent as any other medical condition.
D) It must be covered to the same extent as any other medical condition. Correct! The Pregnancy Discrimination Act states that pregnancy, childbirth and any related medical conditions must be covered to the same extent as any other medical condition under the policy.
In cases where a covered employee is eligible for Medicare benefits to treat end-stage renal disease (ESRD) with dialysis or kidney transplant, which of the following is correct? A) Medicare and the employer group insurance plan will share the cost equally. B) Because Medicare does not cover treatment of ESRD, the group plan will pay 100%. C) Medicare is primary for the first 12 months of treatment and the employer group insurance is secondary. D) Medicare is the secondary payer during the first 30 months of treatment.
D) Medicare is the secondary payer during the first 30 months of treatment. Correct! Individuals eligible for Medicare because of end-stage renal disease (ESRD) and covered under the employer's group plan are primarily covered by the group health coverage for the first 30 months, then Medicare would become the primary health provider.
Which of the following statements concerning group health insurance is CORRECT? A) Only the employer receives a certificate of insurance. B) Each employee receives a policy. C) Under group insurance, the insurer may reject certain individuals from coverage. D) The employer is the policyholder.
D) The employer is the policyholder. Correct! The employer receives the master policy; each employee receives a certificate of insurance. All employees have the same coverage under the master contract.
What type of information is NOT included in a certificate of insurance?
The cost the company is paying for monthly premiums Correct! The individuals covered under the insurance contract are issi certificates of insurance. The certificate tells what is covered in the po uS how to file a claim, how long the coverage will last, and how to convert policy to an individual policy.
