Chapter 12: Employer Group - Important Factors

Question 1

TF: Most health insurance coverage is offered through group plans because the administrative costs are much lower than in individual plans, making the cost of coverage more affordable. The majority of group health plans are employer-sponsored plans.

Answer 1

True

Question 2

Group insurance _______ evaluate the risk of the entire group, not of each individual.

Answer 2

Underwriters

Question 3

Group insurance is typically _____ restrictive than individual insurance policies.

Answer 3

less

Question 4

TF: Underwriters try to avoid high-risk groups and deny coverage to those groups considered to be an adverse selection.

Answer 4

True

Question 5

When the group master policy is delivered, the place of delivery is chosen based on the place where the _______ does the most business, not necessarily based upon the location of the _____ (same)

Answer 5

Policyholder

Question 6

Underwriters accept and deny coverage and set premium rates based on the risk of the group as a whole, evaluating age, sex, and occupation as a group. For groups of _____ or more, insurers may not require enrollees’ medical information.

Answer 6

50

Question 7

Certificates of coverage are guaranteed issue for ____ ____ and are not conditional on individual underwriting or pre-existing conditions.

Answer 7

Eligible Employees

Question 8

Insurers may require other eligibility requirements to minimize the group’s risk, including only providing coverage to ____-_____ employees and requiring a _____ ____ before an employee is eligible for coverage.

Answer 8

Full Time
Probationary Period

Question 9

TF: Groups are selected and rated based on the group’s average age, proportion of men to women, and occupation.

Answer 9

True

Question 10

TF: Insureds under a group policy are typically classified according to their employment (e.g., full-time, part-time, seasonal, salaried, etc.). By classifying employees, the employer decides which class of employees is eligible for coverage. Seasonal and part-time employees are typically not eligible.

Answer 10

tRUE

Question 11

Group size – larger groups provide better ___ _____

Answer 11

Loss predicitions

Question 12

TF: Constant flow of members joining and leaving the group is desirable for insurers, since younger members pose a lower risk than older members.

Answer 12

True

Question 13

The group’s ability to pay premiums and renew coverage impacts policy issuance – called ______

Answer 13

persistency

Question 14

Each individual enrollee does not have to prove ____ of _____, unless enrolling after the group enrollment period.

Answer 14

Evidence of Insurability

Question 15

TF: Adverse selection is reduced in group insurance for several reasons. First of all, the group exists naturally. This is crucial because groups that exist only for the purpose of obtaining insurance are more than likely to contain a large number of individuals who are sick or approaching death.

Answer 15

True

Question 16

TF: Groups can further reduce adverse selection by assuring that as many individuals as possible are eligible for coverage (the law of large numbers applies here).

Answer 16

True

Question 17

Plans must not ______ in favor of certain individuals. All eligible individuals must be permitted to enroll in the group health plan.

Answer 17

discriminate

Question 18

Noncontributory plans, where the employer fully funds the plan, require 100% of all _____ _____enroll.

Answer 18

Eligible Employees

Question 19

Non-employer groups in which the members are fully responsible for paying premiums and the group pays no part of the premiums are called _____ ______ plans.

Answer 19

Fully Contributory

Question 20

Probationary periods usually last for the first ____ ____ of employment.

Answer 20

90 days

Question 21

Employer-sponsored group plans must have a ____ ____period of open enrollment each year.

Answer 21

30 day

Question 22

TF: If an employee fails to enroll during the open enrollment period, they may be required to show proof of insurability in order to receive approval for coverage or they will have to wait until the next open enrollment period.

Answer 22

True

Question 23

Insurers or employers generally require employees to be full-time, usually at least ____ ____ per week. Employees are usually required to fulfill a ___ to ____ day probationary period before they are eligible for coverage.

Answer 23

30 hours
30 to 90

Question 24

TF: Dependents include the employee’s spouse, children, and dependent parents. Stepchildren and adopted children are considered children of the employee.

Answer 24

True

Question 25

Children must be covered from the moment of birth or adoption; however, the insurer may require notification of the birth or adoption within ____ ____ in order to continue coverage.

Answer 25

31 days

Question 26

Coverage of dependent children must continue up to age ____, or if the dependent child is unable to be employed due to mental or physical impairments and is dependent on the policy owner for support, there is no age limit and coverage will continue.

Answer 26

26

Question 27

In the event that the insured is covered by more than one policy for the same condition or benefit, the ____ of _____ provision prevents duplication of benefits, or over-insurance. These provisions are typically included in employer sponsored group policies.

Answer 27

Coordination of Benefits

Question 28

TF: If an individual is enrolled in Medicare, but still remains enrolled under their employer sponsored group health plan, the employer group plan will be the primary insurer and the Medicare coverage will be secondary, as long as the individual remains actively at work.

Answer 28

True

Question 29

If an individual is enrolled in a group insurance policy, but continues to pay premiums on an individual insurance policy as well, that individual will still be able to receive full benefits on both policies in the event he or she needs to file a claim.

The _____ of _____ provision does not apply to individual insurance plans.

Answer 29

Coordination of Benefits

Question 30

For married couples, each individual’s own coverage is ______, and the spouse’s coverage is _____. The _____ _____ applies to parents whose children are covered under both parents’ policies.

The parent whose birthday falls earlier in the year has the primary plan. In divorces and separated couples, the parent with custody over the children has the primary plan.

Answer 30

Primary
Secondary
Birthday Rule

Question 31

TF: In addition, if spouses work for the same employer and are both covered under the employer group plan, the spouse who has the sickness or accident will receive reimbursement up to the benefit maximum under the contract. The well spouse’s coverage will then kick in to provide any remaining coverage needed up to 100% of the injury bill, but not for any amounts in excess of the claim.

Answer 31

true

Question 32

If an employer changes group plan coverage to another insurer, all employees eligible for coverage by the old plan are automatically covered under the new plan without any probationary period. This is referred to as __-___ ___-___

Answer 32

No Loss No Gain

Question 33

TF; When an employer changes insurance companies, any coinsurance or deductibles satisfied on the former plan are carried over and credited to the new plan.

Answer 33

True

Question 34

TF: Employee coverage may be terminated only if:

employment is terminated,
the employee fails to make premium payments,
the employee’s maximum benefits for major medical are already met, or
the master contract is terminated.

Answer 34

True

Question 35

TF: Dependent coverage may be terminated only if:

the dependent fails to make premium payments,
the dependent fails to maintain eligibility requirements, or
the maximum benefits are reached.

Answer 35

True

Question 36

Group insurance generally contains a provision for ____ of _____ to covered employees or dependents who become totally disabled.

These usually lasts for a period of at least 12 months or until the individual is no longer totally disabled.

Answer 36

Extension of Benefits

Question 37

Large employers are covered under _____ ____ ____ ____ ____, which requires that employees be allowed to continue group coverage when terminating employment.

Answer 37

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Question 38

Various states have enacted ____ ____ ____ ____ ___, which cover small employers with 20 employees or less and allow these small groups access to continuation of coverage provisions.

Answer 38

Health Insurance Coverage Continuation Acts

Question 39

TF: Group health plans must provide the right of all eligible persons covered under the group policy to convert to an individual policy without evidence of insurability.

Answer 39

True

Question 40

TF: Conversion privileges are effective if the person was terminated for any reason except involuntary termination for cause, lost coverage due to the entire class of coverage being discontinued, or the insured’s dependent child reaches an age where coverage terminates.

Answer 40

True

Question 41

Policies may require the individual to have been covered continuously for a set period of time, often no more than ____ ____. Coverage provided by a conversion policy usually provides benefits most similar to that provided under the group policy; however, the person may elect a lesser form of coverage. Conversion must be made within ___ ____ of ineligibility in the group plan.

Answer 41

3 months
31 Days

Question 42

If coverage is terminated while the employee is on military leave, due to the employee electing not to continue coverage or because the period of service exceeds ___ _____, the employee and his dependents may not be subject to waiting periods or preexisting condition exclusions upon reinstatement.

Answer 42

18 months

Question 43

Which of the following terms describes a situation where an employer keeps the same group health plan for many years?
Select one:
a. Persistency
b. Underwriting
c. Rating
d. Coordination of benefits

Answer 43

A

Question 44

Most group health plans are sponsored by:
Select one:
a. METs and MEWAs
b. Employers
c. Creditors
d. Alumni associations

Answer 44

B

Question 45

How long is the annual open enrollment period for employer-sponsored group health plans?
Select one:
a. 10 days
b. 30 days
c. 180 days
d. 1 full year

Answer 45

B

Question 46

What does the coordination of benefits provision specify?
Select one:
a. The primary insurer is the only coverage that pays benefits.
b. The primary insurer pays the remaining bill up to the policy limits.
c. The primary insurer pays benefits if the insured is denied coverage under other coverages.
d. The primary insurer pays benefits as if the secondary coverage does not exist.

Answer 46

D

Question 47

What is the purpose of the coordination of benefits clause in group health plans?

Select one:
a. To coordinate premium payments from employees
b. To prevent duplicate premium payments from employees
c. To prevent duplicate benefit payments to employees who are insured under multiple coverages
d. To streamline insurance coverages under Medicare and Medigap

Answer 47

C

Question 48

A group health insurance plan that pays the entire cost of premiums is termed:
Select one:
a. Contributory
b. Noncontributory
c. Par
d. Nonpar

Answer 48

B

Question 49

What term describes the situation where an employer changes group plan coverage to another insurer, and all employees eligible for coverage by the old plan are automatically covered under the new plan without any probationary period?

Select one:
a. Persistency
b. Rollover
c. No-loss no-gain
d. Rating

Answer 49

C

Question 50

Xavier is enrolled in his employer’s group health plan. When he reaches the age of 65, he will no longer be eligible for group coverage. Which of the following is true?

Select one:
a. COBRA requires by law that Xavier may continue coverage under the group plan indefinitely.
b. HIPAA requires that Xavier be allowed to remain on the group coverage for 18 months.
c. Xavier must be permitted to convert his group coverage to individual coverage within 31 days of his ineligibility under the group plan.
d. Xavier may remain on the group coverage indefinitely as long as he pays a higher premium.

Answer 50

C

Question 51

Will has a physically disabled child, who is in high school, and is incapable of self-sustaining employment. Which of the following statements accurately describes the child’s coverage under Will’s health insurance?
Select one:
a. The child may continue to be covered under Will’s plan as long as the child is a full-time student.
b. The child will be unable to continue coverage under Will’s plan after high school, but may enroll in an individual plan.
c. The child may continue to receive coverage under Will’s plan as long as the child continues to be disabled and financially dependent on Will.
d. The child’s coverage under Will’s plan ceases at age 26.

Answer 51

C

Question 52

The coordination of benefits provision specifies that the primary insurer:
Select one:
a. Is the only coverage that pays
b. Pays remaining bill up to the policy limits
c. Pays benefits as if secondary coverage does not exist
d. Pays benefits if the insured is denied coverage under other policies

Answer 52

C