Health 4

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Health 4 1. If an insurance company has rejected an applicant for coverage on the basis of a Medical Information Bureau (MIB) report, the MIB will release medical information contained in the report to which of the following, if any? The applicant The applicant's physician The agent of record None of the above; the report is strictly confidential 2. All of the following statements are true about the tax treatment of premiums and benefits for individually owned health insurance, EXCEPT Benefits from Individual Disability Income policies are not taxed as ordinary Income. Benefits received from Hospital & Surgical Expense policies are taxed to the extent that the benefits exceed the premiums paid Premiums paid for Accidental Death & Dismemberment (AD & D) policies are not tax deductible. Premiums paid for Individual Disability Income policies are not tax deductible. 3. The purpose of the COBRA requirements concerns: coordination of health benefits. continuation of health insurance. Medicare supplement coverage. nondiscrimination in group health plans. 4. With regard to group insurance, who has the responsibility to apply for coverage, provide information about the group, maintain the policy, and pay premiums? The agent that wrote the group coverage The insurer that provides the group coverage The individuals that make up the group The master policyowner 5. An employee may generally convert her group health insurance to an individual policy within a maximum of how many days after her employment is terminated? 20 31 45 90 6. Which of the following benefits may Social Security provide Survivor income Retirement income Disability income All of the above 7. If an employer pays the premiums for an insurance plan that automatically covers all eligible employees, the plan is known as Salary savings insurance Contributory group insurance Noncontributory group insurance Franchise group insurance 8. When an employer establishes a group health insurance plan, what does each participating employee receive? An insurance notice A certificate of insurance A letter of confirmation A coverage form 9. The certificate that each member receives under an employee group insurance contract is a Contract between the insurance company and the individual employee Contract between the insurance company and the employer Document that identifies the employees as an insured under the master contract Document that identifies the employees as the owner of the master contract 10. Rute Canal, a dentist is disabled. His disability overhead expense policy will cover all the expenses below EXCEPT: Electricity Leased X-ray equipment Payments to the doctor Uniforms for the staff 11. Which of the following statements about the role of the agent in completing Health Insurance applications is true? I. The agent must understand the importance of Moral Risk. II. Problems with claims will probably occur if the agent fails to include all pertinent facts and medical history on forms. I only II only I and II Neither I nor II 12. A non-contributory group health plan must cover at least what percentage of eligible employees. 100% 75% 50% 25% 13. Select the correct statement below. COBRA permits companies who have terminated employees to stop their group coverage as of the date of termination. When employers discontinue group coverage, employees must prove they are insurable in order to convert to individual coverage. COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans. All of the above are correct 14. Employees covered under a group health plan continues to be covered after the group has terminated for how long? 15 Days 31 Days 60 Days 90 Days 15. An insured purchased group Credit Disability insurance to cover a loan. He was injured and disabled for 7 months. What benefits were paid under his policy? I. The insured received Disability Income benefits II. The insured's creditor received the equivalent of the monthly payment owed by the insured I only II only I and II Neither I nor II 16. In using the needs approach to buying health coverages, which of the following is least important? Income needs Current group insurance plans Emergency needs Final expense funds 17. Self inflicted injuries are excluded from which of the following? 1. Medical Expense policies 2. Disability Income policies 1 only 2 only 1 and 2 Neither 1 or 2 18. The transfer of the insured's rights to receive benefits of a Health Insurance policy for a particular claim is known as Facility of payment Assignment Rebating Waiver 19. Which of the following statements regarding Blanket health insurance is true? Benefits change as the group changes Persons insured are named in the policy Each policy covers a specific number of insureds A blanket policy covers a changing group of people 20. Incurred medical expenses that are not reimbursed may be deducted only to the extent that they exceed: 25% of adjusted gross income 7.5% of A.G.I.. 25% of ordinary income 7.5% of ordinary income 21. In noncontributory group plans, how many eligible employees must be covered by the plan? At least 50% Usually 75% or more At least 90% 100% 22. Which of the following statements about health service organizations is true? They provide Loss of Income benefits to policyowners. They provide benefit payments directly to the hospitals and physicians providing service. They reimburse policyowners directly for physicians' fees. They reimburse policyowners directly for all medical expenses. 23. Health Maintenance Organizations (HMO): Are considered pre-paid service systems Are licensed insurance companies Reimburse the insured for his medical bills Deal with Medicare recipients only 24. All of the following characteristics apply to a Partnership disability buy-sell agreement except: Having a lengthy elimination period Setting forth the terms for buying the partners share Providing for lump sum payments of benefits Providing for a death benefit 25. A company that is licensed to sell insurance in a particular state is a domestic company an alien company a nonadmitted company an authorized company 26. From a legal standpoint, Constructive Delivery of a policy is accomplished when the company sends the policy to the agent with instructions to obtain a statement attesting to the Insured's continued good health. the agent delivers the policy for inspection but the initial premium has not yet been paid. the company relinquishes all control over the policy and turns it over to someone acting for the policyowner including the company's agent. the agent mails a policy to the policyowner with a note that he or she will stop by later to collect the first premium. 27. All of the following statements are applicable to Medical Savings Accounts EXCEPT 1. Distributions could be taxed and penalized at 15% 2. They are meant to provide catastrophic coverage 3. They are available to all working U.S. residents under 70 1/2 4. May be used with individual as well as group insurance plans 1 & 2 1 & 4 2 & 3 all the above 28. A Business Continuation Plan may include all of the following except: Life Insurance Group Insurance Health Insurance Disability Insurance 29. Answers given by Health Insurance applicants are considered to be the absolute truth warranties representations negotiable 30. A Business Overhead Expense policy includes all of the following except: Benefits taxable as income Tax deductible premiums Coverage for Employee's Salaries Coverage for Employer's Salaries 31. Which of the following about group health insurance is (are) true? I. Insurance company underwriting practices are generally less liberal for groups than for individuals. II. Claim experience is often utilized in large groups. I only II only I and II Neither I and II 32. Concerning the taxation of health insurance benefits, all the following statements are true EXCEPT Personal medical expense policy benefits are not subject to taxation 5% of disability income benefits are taxable income Benefits paid for expenses deducted in a prior year are taxable Benefits received from hospital policies are not taxable 33. In group health insurance, unlike most personal insurance, Maternity expenses are treated as any other claim. true false 34. June terminated her employment with the Wynot agency. She is told she will have 31 days to convert her coverage to an individual health policy. What else about conversion is true? She is still covered under the group policy for 31 days If she becomes uninsurable they might charge her a higher premium because of her health She must have been active in the group's plan for the last three months All the above are true 35. All of the following unreimbursed medical expenses may be considered and lumped together to determine their deductibility except: I. Prescription drugs II. Contributions to group disability III. Contributions to group AD&D IV. Contributions to a group medical plan 1 & 3 3 & 4 1 & 4 2 & 3 36. The Primary Insurance Amount, (P.I.A.) , as defined under Social Security, is: amount of insurance available to a surviving spouse amount of insurance payable at death on the primary bread winner amount of disablity insurance payable to a disabled worker equal to the full retirement benefit at age 65 37. Which of the following represents certain consumer safeguards enacted by states and patterned after a model act developed by NAIC? Fair Credit Reporting Act The MIB Unfair Trade Pratices Act COBRA 38. The coordination of benefits provision, found in a health policy, was amended to require or allow a greater degree of coordination when an insured was covered by more than one policy as long as the insured is reimbursed for 100% of the covered expenses. To which of the following policies does this provision apply? 1. Between group & individual insurance 2. Hospital Indemnity type policies 3. Medicare supplement insurance 4. A.D.& D. policies 1 1 & 2 2 & 3 all the above 39. Which of the following statements concerning the Health Care & Insurance Reform Act of 1993 is true? It governs group and individual health insurance provisions It governs group health insurance provisions It governs individual health insurance provisions 40. The type of health insurance policy most likely to cover all students attending a large university is: a blanket policy a franchise policy an ASO a self-insured plan 41. Regarding dental insurance, deductibles and co-insurance typically do not apply to which of the following ? oral surgery root canals cleaning & exams all the above 42. Which of the following most accurately and completely describes an application? A form furnished by the insurer requesting certain inofrmation to become part of the insurance policy A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application An oral request from an agent to an insurer to issue an insurance policy An application can be any of the above. 43. The type of health care provider that provides both the health care services and the health care coverage is a: Preferred Provider Organization. Health Maintenance Organization. Blue Cross/Blue Shield Organization. Traditional health insurance company. 44. When applying for a health policy, Chester Crook stated that he had never had heart trouble even though he suffered a heart attack. Two months after the policy's effective date, Chester suffered a second heart attack. The insurance company will probably take which of the following actions? Void the policy and refund the premiums paid. Pay him reduced benefits according to the policy's Recurrent Disability provision. Pay the claim and increase his future premiums. Pay the claim and add an exclusion for heart ailment to the policy. 45. A Health Insurance company in a certain city contracts with an independent medical group to provide services to its subscribers. The company pays the group organization, rather than paying the individual medical practitioners. What type of structure is this? Exclusive Provider Organization Network model Staff model IPA model 46. The type of health insurance policy most likely used to cover all students attending a large university is: a blanket policy. a franchise policy. an ASO. a self-insured plan. 47. Business continuation insurance covers all of the following except: 1. Life Insurance 2. Disability Insurance 3. Group Life Insurance 4. Comprehensive Medical Insurance 1 & 3 2 & 4 2 & 3 3 & 4

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