CH 12 Group Health Insurance

Question 1

Who are the parties in a group health contract?

Answer 1

The employer and the insurer

Question 2

What is a probationary period in group health insurance?

Answer 2

The period of time that must lapse before an employee is eligible for group health coverage

Question 3

Does group health insurance require medical examinations?

Answer 3

No. The underwriter evaluates the group as a whole, rather than each individual member.

Question 4

How do insurers determine the cost for a group health policy?

Answer 4

The main variables are the ratio of men and women in the group, and the average age of the group.

Question 5

What do individual insureds receive as proof of the group health coverage?

Answer 5

Certificate of insurance

Question 6

In group insurance, who is issued a certificate of insurance?

Answer 6

Individual insured

Question 7

What is a birthday rule in a coordination of benefits provision?

Answer 7

The coverage of the parent whose birthday is earlier in the year is considered primary

Question 8

According to the coordination of benefits provision, if both parents have coverage for a child from their employers policies, which policy will pay first?

Answer 8

The order of payment will be determined by the birthday rule: the coverage of the parent whose birthday is earlier in the year will be considered primary.

Question 9

What types of groups are eligible for group health insurance?

Answer 9

Employer-sponsored and association-sponsored groups

Question 10

How many members must an association have to qualify for group insurance?

Answer 10

100

Question 11

If a group health policy covers individuals that reside in more than one state, which state has jurisdiction over the group policy?

Answer 11

The state in which the policy was delivered.

Question 12

In group insurance, what is the name of the policy?

Answer 12

Master policy

Question 13

What is the purpose of COBRA?

Answer 13

To allow continuation of health insurance coverage for terminated employees.

Question 14

If the insureds share in the cost of health insurance premiums with the employer, this would be known as what type of group health plan?

Answer 14

Contributory

Question 15

In health insurance, when would an excess plan pay benefits?

Answer 15

After the primary plan has paid its full promised benefit, the excess plan will pay the balance.

Question 16

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

A) 100%
B) 75%
C) 50%
D) 25%

Answer 16

100%.

Question 17

What type of policy contains a coverage that is only activated upon the insured losses reaching a certain level?

A) Fully funded plan
B) Modified fully insured plan
C) Partially funded plan
D) Modified coverage

Answer 17

Partially funded plan.

Question 18

All of the following statements describe a MEWA EXCEPT

A) MEWAs can be sponsored by insurance companies
B) MEWA employers retain full responsibility for any unpaid claims
C) MEWAs can be self-insured
D) MEWAs are groups of at least 3 employers

Answer 18

MEWAs are groups of at least 3 employers.

Question 19

What type of group insurance plan has the benefits that are a result of a collective bargaining agreement between a labor organization and an employer?

A) Partially-funded plan
B) Labor union
C) Modified fully-insured plan
D Conventional fully-insured plan

Answer 19

Modified fully-insured plan.

Question 20

Which of the following are characteristics of a successful self-funded plan?

A) A group large enough to reasonably predict future loss experience
B) A stop-loss contract to assume losses beyond the insured’s retention
C) A third party administrator who services claims
D) All of the above

Answer 20

All of the above.

Question 21

Which of the following is true regarding METs?

A) They make deals with local hospitals to provide low cost coverage to the needy
B) They provide insurance for larger corporations
C) They provide insurance companies with medical information on applicants
D) They allow several small employers purchase less expensive insurance together

Answer 21

They allow several small employers purchase less expensive insurance together.

Question 22

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) Number of hours worked per week
B) The total amount of time worked for the company
C) Age
D) Income

Answer 22

Number of hours worked per week.

Question 23

In order to be eligible for group health insurance, all of these are conditions an employee must meet EXCEPT

A) Must be working in a covered classification
B) Must be actively at work
C) Must be a full-time employee
D) Must have dependents

Answer 23

Must have dependents.

Question 24

After a divorce, when can a surviving spouse of a certificate holder qualify for continuance of coverage under a group health policy that provides coverage for medical expenses?

A) If the spouse is disabled
B) Immediately after the death of the certificate holder
C) When the spouse is 55 years of age or older
D) Under no circumstances, the divorce revokes the continuation of coverage privilege

Answer 24

When the spouse is 55 years of age or older.

Question 25

Which of the following factors would be an underwriting consideration for a small employer carrier?

A) Medical history of the employees
B) Percentage of participation
C) Claims experience
D) Health status

Answer 25

Percentage of participation.

Question 26

What characteristics must be met for a self-funded plan to be dependable?

A) Be big enough to permit the use of a sufficiently large number of exposure units so as to make losses predictable. (The program must be based on the operation of the law of large numbers)
B) The individual units exposed to loss must be distributed in such a manner as to prevent a catastrophic loss. A loss that could affect all units at one time could cause financial failure to the program
C) The accumulation of funds must be able to meet mosses that occur, with a sufficient accumulation to safeguard unexpected deviations from predicted losses
D) All of the above

Answer 26

All of the above.

Question 27

What is another name for an Administrative-Services Only arrangement?

A) Third-party administrator
B) A modified fully insured plan
C) Modified endowment contract
D) Self-funding

Answer 27

Third-party administrator.

Question 28

Which of the following options best depicts how the eligibility of members for group health insurance is determined?

A) Eligibility is not determined, but simply accepted
B) By the physical conditions of the applicants at the time of employment
C) In such a manner as to establish individual selection as to the amounts of insurance
D) By conditions of employment

Answer 28

By conditions of employment.

Question 29

What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged?

A) Individual rating
B) Experience rating
C) District rating
D) Community rating

Answer 29

Experience rating.

Question 30

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT

A) Holds annual meetings
B) Is contributory
C) Has at least 50 members
D) Has a constitution and by-laws

Answer 30

Has at least 50 members.