Ch 7 Group Accident and Health Insurance

Question 1

A lender of funds

Answer 1

Creditor

Question 2

A borrower of funds

Answer 2

Debtor

Question 3

A provision that allows coverage to continue beyond the policies expiration date for employees who are not actively at work due to disability or who have dependence hospitalized on that date (coverage continues only until the employee returns to work or the dependent leave the hospital)

Answer 3

Extension of benefits

Question 4

The health insurance portability and accountability act is a federal law that protects health information

Answer 4

HIPAA

Question 5

The tendency or likelihood of insurance policies not lapsing or being replaced with insurance from another insurer

Answer 5

Persistency

Question 6

A non-insured plan that uses a trust fund to pay for employees healthcare expenses directly

Answer 6

Self funded programs

Question 7

Risk selection and classification process

Answer 7

Underwriting

Question 8

The policy owner (employer) receives the master policy, each insured receives a certificate of insurance.

Answer 8

True

Question 9

Group health insurance uses __________________ for premium determination

Answer 9

experience rating

Question 10

True or false group health plans typically cost less than individual plans?

Answer 10

True

Question 11

Evidence of insurability is not required during the annual open enrollment period and group policies

Answer 11

True

Question 12

Coordination of benefits (COB) provision ensures and benefits are not paid in excess of the total losses incurred

Answer 12

True

Question 13

Covers for dependents under cobra may be extended to _____ months in the event of employees divorce or death

Answer 13

36 months

Question 14

Characteristics of group insurance

Answer 14

• Group formed for a purpose other than attending group health insurance
• Master policy - issue to the group sponsor
• certificates of insurance - evidence of coverage for the insured’s
• experience rating: premium based on group is whole
• Community rating: premium based on insurer claims experience

Question 15

experience rating: premium based on group as whole

Answer 15

premium based on group as whole

Question 16

Community rating:

Answer 16

premium based on insurer claims experience

Question 17

Types of eligible groups

Answer 17

• Employer sponsored – individual or multiple employer trust (MET)
• Association – alumni or professional

Question 18

Advertising

Answer 18

Trustful and non-misleading

Question 19

Jurisdiction

Answer 19

Covers for more than one state, approved in issuing state

Question 20

Underwriting

Answer 20

• every eligible member of group must be covered regardless of physical condition, age, sex or occupation
• evidence of insurability generally not required
• 30 day open enrollment period
• probationary employees must work a total of 30 hours per week

Question 21

Provisions

Answer 21

• conversion to an individual coverage – within 31 days without evidence of insurability
• coordination of benefits
• change of insurers – carryover of coinsurance and deductibles

Question 22

Qualifying events

Answer 22

• Voluntary termination of employment
• termination of employment for reasons other than gross misconduct (e.g. company downsizing)
• employment status change: from full-time to part-time

Question 23

Length of coverage

Answer 23

• 18 months - after qualifying event

- 36 months - for dependence after events such as death of the employee, divorce or legal separation

Question 24

In group health insurance, who receives certificates of insurance?

Answer 24

The employees (insureds)

Question 25

Group health insurance is subject to what type of rating?

Answer 25

Experience rating

Question 26

Group health insurance is generally eligible for what two types of groups?

Answer 26

Employer-sponsored groups and associations

Question 27

Master policy

Answer 27

employeer holds the insurance policy

Question 28

Insureds receive certificates of insurance (certificate of coverage)

Answer 28

True

Question 29

Non contributory plan

Answer 29

Employeer pays 100% of the premium (100% participation)

Question 30

Contributory plan

Answer 30

Employeer and employees pay the plan. (75% participation)

Question 31

MET’s must be in the same line of work

Answer 31

Multiple business sharing insurance cost.

Question 32

Coordination of benefits provision

Answer 32

Found only in group health plans

purpose to avoid duplication of benefits when an insured is covered under multiple plans.

Question 33

COBRA (continuation of group health coverage for terminated employees)

Answer 33

• employees must apply within 60 days of termination
• coverage extends for up to 18 months
• 36 months for dependents after employee’s death or divorce
• employee pays 102% of premium.