Chapter 12: Group Health Insurance

Question 1

Group insurance provides insurance for many people under one master contract. The group is underwritten as ______, not _______

Answer 1

A whole
Individuals

Question 2

TF: Each members insured under the group plan is party to the contract

Answer 2

False

Question 3

TF; More people are covered by a group plan through their employer than by an individual insurance plan.
It is typically easier to qualify for a group plan than an individual plan.
The unit cost for group insurance is generally less than for a comparable individual plan.

Answer 3

True

Question 4

Group health insurance policies are contracts between an insurer and _____, _____ or ____ ____

Answer 4

Employer
Union
Other Association

Question 5

TF: People enrolling in Group health plans usually have to undergo a medical exam as a prerequisite to enrollment.

Answer 5

False

Question 6

TF: Coverage for work-related accidental injuries and sicknesses are not covered under group health policies. Workers’ Compensation covers these losses.

Answer 6

True

Question 7

Group insurance contracts are between the insurer and the _______. The _____ (same) is the employer, association, labor union, trusteeship, or any other type of eligible group. The policyowner purchases and is the sponsor of the group contract for the benefit of its employees or members.

Answer 7

Policyowner

Question 8

TF: Master Contract = Policyowner
Certificate of Insurance = Members

Answer 8

True

Question 9

TF: Certificates of coverage detail:

The policy,
Coverage,
Term,
Claim procedures, and
The right of conversion.

Answer 9

True

Question 10

TF: Group health plans must state the eligibility requirements including:

Who is eligible
When individuals are eligible to enroll
Minimum plan participation requirements

Answer 10

True

Question 11

For large groups of employees (typically starting at 1,000), group health insurance policy rates are usually based on _____ _____, in which premiums are based on the claims experience of the entire group.

Answer 11

Experience rating

Question 12

With ____ _____, premiums are based on the actual or projected costs of insureds in a particular geographic location with reference to insureds’ age, gender, occupation and health.

Answer 12

Community Rating

Question 13

With ______ rating, each member pays the same premium.

Answer 13

Community

Question 14

TF: For smaller employee groups with 100 to 999 employees, companies may use a combination of community rating and experience rating.

Answer 14

True

Question 15

Types of coverage offered for group health plans?

Answer 15

Medical,
Hospital,
Surgical expenses,
Accidental death and dismemberment, and
Disability income.

Question 16

TF: Often, disability income and accidental death and dismemberment policies are offered separately.

Answer 16

True

Question 17

While most health policies provide maternity benefits, they are subject to certain conditions and limitations, such as, a ____month waiting period designed to prevent the purchase of insurance solely for pregnancy coverage. However, employer groups that insure _____ or more employees must cover maternity benefits.

Answer 17

10
15

Question 18

The most common group health insurance is for a company and its employees.

Other groups include?

Answer 18

Labor or trade unions,
Credit unions and banks,
Alumni associations and
Professional associations.

Question 19

TF: Group Coverage = must exist naturally

Answer 19

True

Question 20

Factors for classifying eligibility requirements for employer sponsored group plans?

Answer 20

Length of service,
Job classification,
Number of work hours, and
Method of compensation.

Question 21

Employers may not classify employees based on ____ or ______ Employer plans may be ______ or _______

Answer 21

Age or Gender
Contributory or noncontributory

Question 22

________ plans are funded by the employer and by premium payments of the employee. ________ (same) plans must cover 75% of the employees.

Answer 22

Contributory

Question 23

______ plans are fully funded by the employer. They must cover 100% of employees.

Answer 23

Noncontributory

Question 24

TF: Individual employers who contract with insurers to provide group coverage for their employees may specify which employees are eligible by establishing

What constitutes full-time,
Whether coverage extends to salaried and hourly employees, and
Whether or not any classes of employees are excluded from coverage.

Answer 24

True

Question 25

TF: Employers are legally not allowed to exclude entire classes of employees

Answer 25

false, then can! But they can’t exclude employees on an individual basis or because of medical history health conditions.

Question 26

____ ____ _____ (METs) and ___ ____ ____ _____ (MEWAs) consist of two or more employers or labor unions seeking group health insurance coverage by joining together to form a larger group.

Answer 26

Multiple Employer Trusts
Multiple Employer Welfare Arrangements

Question 27

An _______ may obtain group health coverage for its members if:

It consists of at least 100 people,
Has been organized for at least two years,
Has a constitution and by-laws,
Holds at least annual meetings and
Is a natural group not formed specifically to provide insurance benefits

Question 28

Associations that provide group health plans include:

College alumni associations,
Professional or trade associations,
Veterans groups,
Banks,
Credit unions, and
Even customers of large companies.
Association group health plans, like employer-sponsored plans, may be

Contributory or
Noncontributory.

Answer 28

True

Question 29

Some lenders obtain ____ ______ insurance, which provides specialized life and health insurance coverage to its borrowers to protect the lender for losses resulting from the disability or death of the borrower. Usually, the borrower pays premiums for this type of insurance, and the lender is the policy’s beneficiary.

Answer 29

Creditor Group

Question 30

Generally, an employer with between ____ and ____ employees would be defined as a small group – but these numbers vary by state. Insurance companies require at least 75 percent of a small employer’s eligible employees to participate in the health plan.

Answer 30

2 and 50

Question 31

Advertising for health insurance policies must be ____, ____ ____ and not use ____ ____

Answer 31

Truthful
Not misleading
insurance jargon

Question 32

TF: Advertisements

The words and phrases must be clear and accurately describe the policy features.
Illustrations must be accurate and relevant with regards to the policy advertised.
Testimonials must be genuine and current.
Advertisements may not make unfair, incomplete, or unsubstantiated comparisons of other insurers’ policies or benefits.

Answer 32

True

Question 33

TF: Many states allow delivery of a group policy issued in another state if:

The policy was approved by the state in which it was issued,
Complies with the insurance laws of the state in which it was delivered, and
The insurance laws of the two states are essentially the same.

Answer 33

True

Question 34

A grace period of at least ____ days is allotted for nonpayment of premium during which period the policy remains in force.

Answer 34

31

Question 35

Except for nonpayment of premium, the policy is incontestable after having been in force for at least ____ years.

Answer 35

Two

Question 36

A copy of the application must be attached to the policy if considered part of the ____ _____

Answer 36

entire contract

Question 37

TF: Individuals do not have to prove evidence of insurability, unless enrolling after the group enrollment period. The insurer must stipulate what information these individuals must provide as evidence of insurability.

Answer 37

True

Question 38

If the insured misstates their age, the insurer will either adjust the ______ or _____. The method for this adjustment must be ___ ?

Answer 38

Premiums or Benefits
STATED IN THE POLICY

Question 39

The policy must issue ______ of _______ to members insured under the policy. Each must include:

The type of coverage provided,
The amount of benefits,
Who will receive the policy benefits and
Coverage for dependents, if provided by the policy.

Answer 39

Certificates of Insurance

Question 40

Blain’s Spa and Salon has a group health plan for his employees. Blain pays for the entire cost of coverage. Which of the following is true?
Select one:
a. The plan is noncontributory and all eligible employees must participate in the plan.
b. The plan is contributory and 75% of all eligible employees must participate in the plan.
c. The plan is noncontributory and only the hairstylists must participate in the plan.
d. The plan is contributory and 100% of all eligible employees must participate in the plan.

Answer 40

A

Question 41

All of the following groups may purchase group health insurance coverage, EXCEPT:
Select one:
a. Sally’s Flower Shop with 15 employees
b. Judy’s Handmade Card Shop with 5 employees
c. Maggie’s Piano Studio with 1 employee
d. Fran’s Furniture Land with 50 employees

Answer 41

C

Question 42

All of the following statements are true regarding creditor group health insurance, EXCEPT:
Select one:
a. Premiums are typically paid by the lender.
b. The lender is the policy’s beneficiary.
c. Creditor group health insurance protects lenders for losses resulting from disability or death of borrower.
d. Creditor group health insurance provides specialized insurance for lenders to protect against nonpayment of a loan when a borrower becomes disabled or dies, and cannot repay the loan.

Answer 42

A

Question 43

Which of the following would be considered unfair advertising for group health insurance?
Select one:
a. Using insurance jargon
b. Contrived testimonials
c. Incomplete comparisons of other insurers_ group health insurance products
d. All of the above

Answer 43

D

Question 44

Jacob has a group health insurance policy and pays the same premium as all other insureds under the policy. What rating was used?
Select one:
a. Primary rating
b. Community rating
c. Individual rating
d. None of the above

Answer 44

B

Question 45

What is outlined in the certificate of coverage for a group health insurance policy?
Select one:
a. Benefits
b. Claim procedures
c. Conversion rights
d. All of the above

Answer 45

D

Question 46

Group health insurance policy rates are usually based on:
Select one:
a. Experience rating
b. Community rating
c. Individual rating
d. None of the above

Answer 46

A

Question 47

The master contract for a group health plan is issued to the:
Select one:
a. Employer
b. Employee
c. Insured
d. Insurer

Answer 47

A

Question 48

Association groups applying for group health insurance must have a minimum of:
Select one:
a. 1 member
b. 10 members
c. 100 members
d. 1,000 members

Answer 48

C

Question 49

All of the followings statements regarding group health insurance are true, EXCEPT:
Select one:
a. The policyholder is the employer, union, or other association, not the insured members.
b. Each member is issued a certificate of coverage.
c. Maternity does not need to be covered.
d. Enrollees typically do not need to undergo a medical exam.

Answer 49

C

Question 50

Maternity benefits must be covered by employer groups that insure _____ or more employees.

Answer 50

15