Chap. 6

Question 1

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

Answer 1

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

Question 2

Q: What types of groups are eligible for group health insurance?

Answer 2

A: Employer-sponsored and association-sponsored groups

Question 3

Q: 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 3

Contributory

Question 4

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

Answer 4

A: 100 members

Question 5

Q: What do individual insureds receive as proof of their group health coverage?

Answer 5

A: Certificate of Insurance

Question 6

Q: What is a probationary period in group health insurance?

Answer 6

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

Question 7

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

Answer 7

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

Question 8

Q: Does group health insurance require medical examinations?

Answer 8

A: No, the underwriter evaluates the group as a whole, rather than each individual member

Question 9

Q: 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 9

A: 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 10

Q: What is the purpose of COBRA?

Answer 10

A: To allow continuation of health insurance coverage for terminated employees
To provide continuation of coverage for terminated employees

Question 11

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

Answer 11

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

Question 12

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

Answer 12

A: The state in which the policy was delivered

Question 13

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

Answer 13

A: Individual insured

Question 14

Q: Who are the parties in a group health contract?

Answer 14

A: The employer and the insurer

Question 15

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

Answer 15

A: Master policy

Question 16

In a group policy, the contract is between

Answer 16

The employer and the insurance company.

Question 17

In order to qualify for group coverage in this state, associations must insure

Answer 17

At least 25 members.

Question 18

Which of the following statements is NOT correct concerning the COBRA Act of 1985?

Answer 18

It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

Question 19

Which of the following statements concerning group health insurance is CORRECT?

Answer 19

The employer is the policyholder.

Question 20

Accountable health plans cannot impose pre-existing condition exclusions on children adopted

Answer 20

Before age 18.

Question 21

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

Answer 21

Experience rating

Question 22

Which of the following is true regarding METs?

Answer 22

They allow several small employers purchase less expensive insurance together.

Question 23

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?

Answer 23

COBRA

Question 24

Which of the following is NOT the purpose of HIPAA?

Answer 24

To provide immediate coverage to new employees who had been previously covered for 18 months

Question 25

Why do group health providers usually require a certain amount of participation in the plan by eligible employees?

Answer 25

To guard against adverse selection and reduce cost

Question 26

HIPAA applies to groups of

Answer 26

2 or more.

Question 27

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

Answer 27

By conditions of employment

Question 28

Which of the following would be a qualifying event as it relates to COBRA?

Answer 28

Termination of employment due to downsizing

Question 29

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

Answer 29

Percentage of participation

Question 30

How many eligible employees must be included in a contributory plan?

Answer 30

75%

Question 31

The classification “small employer” means any person actively engaged in a business that during the preceding year employed

Answer 31

At least 2 and not more than 50 persons.

Question 32

If a firm has between 2 and 50 employees that are actively engaged in business during the preceding calendar year, what is its classification?

Answer 32

Small employer

Question 33

Jason is insured under his employer’s group health insurance. He splits the cost of the premiums with his employer. This is an example of

Answer 33

A contributory plan.

Question 34

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

Answer 34

100%

Question 35

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?

Answer 35

$102

Question 36

If an insurer terminates a small group disability plan’s coverage, it cannot issue those plans for

Answer 36

The next 5 years.

Question 37

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?

Answer 37

They carry over from the old plan to the new plan.

Question 38

Who is the beneficiary in a credit health policy?

Answer 38

The lending institution

Question 39

What is the benefit of experience rating?

Answer 39

It allows employers with low claims experience to get lower premiums.

Question 40

Which of the following entities is automatically qualified to enroll in a health insurer’s mandatory, guaranteed issue policy?

Answer 40

All small employers

Question 41

To protect personally identifiable information, state Exchanges must establish safeguards that include all of the following EXCEPT

Answer 41

Returning copies of paperwork featuring such information to individuals.

Question 42

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?

Answer 42

$500

Question 43

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,

Answer 43

The insurance through his company is primary.

Question 44

Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)?

Answer 44

A joining together by employers to provide health benefits for employee

Question 45

What type of information is NOT included in a certificate of insurance?

Answer 45

The cost the company is paying for monthly premiums

Question 46

All of the following are differences between individual and group health insurance EXCEPT

Answer 46

Individual insurance does not require medical examinations, while group insurance does require medical examinations.