Chapter 12: Obamacare - Patient Protection and Affordable Care Act

Question 1

The ____ ____ and ____ ____ _____ is a federal law signed by President Obama in 2010 as part of the United States health care reform. It is more commonly referred to as Obama Care. The purpose of the Act was to hold insurance companies accountable, lower health care costs, guarantee options for consumers, and provide better health care for all Americans.

Answer 1

Patient Protection and Affordable Care Act

Question 2

TF: Some highlights of the PPACA include:

Guaranteed issue;
Community rating – insurers must charge the same premium to all applicants of the same age, sex and geographical location, regardless of preexisting conditions;
Medicaid eligibility is broadened – individuals and families whose incomes are up to 133% of the federal poverty line;
Small businesses are provided a tax credit to provide health coverage to employees;
Lower premium costs;
Competitive private health insurance market – via state exchanges; and
Children ages 18 to 26 can be covered under their parents’ health plans.

Answer 2

True

Question 3

TF: The PPACA allows dependent children to remain on their parents’ insurance plan until age 26, even if they no longer live with their parents, are not a dependent on a parent’s tax return, and are no longer a student, or are married.

Answer 3

True

Question 4

TF: The PPACA also provides guaranteed issue to children under the age of 19 and prohibits insurers from excluding preexisting medical conditions.

Answer 4

True

Question 5

In order to reduce administrative costs and require insurers to spend a minimum percentage of premiums on eligible healthcare services, the PPACA established a ____ _____ ratio

Answer 5

Medical Loss

Question 6

The medical loss ratio requires insurers to spend a certain percent of premium dollars on _____ _____

Answer 6

Eligible Expenses

Question 7

Health insurance companies are mandated to spend _____ percent for every dollar collected on individual and small-group health plans and at least _______ percent of the premiums collected on large-group plans on health care as opposed to administrative costs.

If an insurer fails to meet this requirement, the insurer must issue a premium rebate to its policyholders.

Answer 7

80%
85%

Question 8

TF: Obamacare eliminates pre-existing conditions; meaning that an individual cannot be charged more for or denied coverage based on pre-existing health conditions.

Answer 8

True

Question 9

TF: All new health care plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance. Other covered preventive services include:

Alcohol Misuse screening and counseling
Blood Pressure and Cholesterol screening for adults of certain ages or high-risk
Depression screening for adults
Diabetes screening for adults with high blood pressure and Obesity screening and diet counseling
HIV screening
Immunizations

Answer 9

True

Question 10

The PPACA regulations dictate that health plans may not establish ____ ____ on the dollar value of benefits for any participant or beneficiary or any unreasonable ____ _____

Answer 10

LIFETIME LIMITS
annual limits

Question 11

Salary reduction contributions for health flexible spending arrangements (health FSAs) are specifically limited to _______(indexed for inflation) per year.

Answer 11

$2,500

Question 12

TF: Salary reduction contributions to FSAs, HSAs, and MSAs are limited under PPACA to $2,500

Answer 12

False - only FSAs are limited to $2,500. MSAs and HSAs are not

Question 13

TF: The PPACA includes a grandfather clause that keeps the new regulations imposed by the PPACA from applying to health plans that are “grandfathered” in.

Answer 13

True

Question 14

TF: Grandfathered plans may continue in this exempt status until one of the following plan changes occurs:

Switch of carriers by a fully-insured plan;
Elimination of certain benefits to treat or diagnose a particular condition that is currently covered;
Any increase in coinsurance percentage;
Certain increases of copayments, deductibles or out-of-pocket minimums;
Certain decreases in employer contribution rate;
Changes to overall annual limitations;
Certain mergers, acquisitions and/or employee transfer from a grandfathered plan.

Answer 14

True

Question 15

Both new and grandfathered plans can no longer rescind coverage of employees, except in the case of fraud, material misrepresentation, refusal to pay premiums, or termination of the plan. The ______ may occur only after prior written notice to the affected employee is given.

Answer 15

Rescission

Question 16

In addition to providing Essential Health Benefits (EHBs), all non-grandfathered health insurance plans must meet specific actuarial values, or AVs:

60% for a bronze plan
70% for a silver plan
80% for a gold plan
90% for a platinum plan

This are referred to as _____ _____

Answer 16

Metal Levels

Question 17

TF: Metal Levels will assist consumers in comparing and selecting health plans by allowing a potential enrollee to compare the relative payment generosity of available plans. Taken together, EHB and AV will significantly increase consumers’ ability to compare and make an informed choice about health plans.

Answer 17

true

Question 18

TF: The PPACA will require most Americans to have insurance. Every state is required to create a Small Business Health Options Program, also called SHOP exchanges, designed to help small employers access affordable insurance for their employees.

Answer 18

True

Question 19

Some of the costs will be offset by tax credits and subsidies available to families with incomes between _____ and ____ of the poverty level. The tax credits can be applied toward the premiums of programs in the health benefit exchanges.

Answer 19

133%
400%

Question 20

States have the option of defining “small employers” as businesses with up to ____ employees.

Answer 20

100

Question 21

While the law does not expressly require small employers to provide insurance to their employees, those with over 50 employees would likely have to cover at least _____ of the premium to avoid a potential penalty.

Answer 21

60%

Question 22

The law provides that employers with ____ or more employees are subject to a penalty if they fail to offer insurance to their employees, if the employees must pay more than 9.5% of their income for insurance, or if an employer-sponsored plan fails to cover 60% of the plan and any employees receive premium assistance tax credits.

Answer 22

50

Question 23

Employers with fewer than 25 employees must pay at least _____ of the premiums in order to be eligible for the small business tax credit.

Answer 23

50%

Question 24

TF: The new laws provide small employers with not more than 25 employees and average annual wages of less than $50,000 with tax credits to help purchase health insurance. The tax credit is available to eligible small business that purchase coverage through state exchanges and contribute at least 50% of total premium cost. The credit is only available for the first 2 years through the exchange.

Answer 24

True

Question 25

Under the Act, new group health plans must now continue benefits payment during the internal claims process. In line with this requirement, plans must establish an internal and external ______ _____ process.

Answer 25

claim appeal

Question 26

They also require an employer providing notice of an “_____ ______” to describe the reasons for the denial of the claim and to tell the claimant what information might be missing, how to perfect the claim, and how to appeal.

Answer 26

adverse determination

Question 27

The new regulations provide for a ______-hour maximum response time frame for urgent care claims, provided the plan or issuer defers to the attending provider as to whether the claim is for urgent care.

Answer 27

72

Question 28

TF: To ensure the integrity of decisions and avoid conflicts of interest, decisions on hiring, compensation, termination, and promotion cannot be based on the likelihood that an individual will support a claim denial. For example, a plan cannot provide bonuses based on how many denials are made by a claims administrator.

Answer 28

True

Question 29

The Act provides immediate valuable tax credits to small employers to ease the cost of providing health care coverage to employees. If your business meets all three of the below factors, it is a small employer and is entitled to receive a tax credit of up to ______ of its contribution to employees’ health care insurance costs beginning this taxable year:

Have 25 or less full-time equivalent employees for the taxable year. To determine the amount of full-time equivalent employees your business has divide the total number of total hours worked by your employees during the taxable year by 2,080. If the result is 25 or less, you satisfy this requirement;
Pay Employees less than $50,000 average annual wages. To determine if your employees earn less than $50,000 average annual wages divide the total amount of wages paid by you to your employees during the taxable year by the number of full-time equivalent employees (i.e. your result in #1 above). If the result is $50,000 or less, you satisfy this requirement; and
Pay at least 50% of each employee’s health care insurance premium. Employers with 10 or less full-time equivalent employees, who pay $25,000 average annual wages or less, receive the total 35% tax credit. The tax credit is reduced for every full-time equivalent employee employed over 10 and every dollar of average annual wages paid over $25,000.

Answer 29

35%

Question 30

Tax-exempt small employers receive up to a _____ tax credit, rather than a 35% credit, of the cost of employee health care insurance contributions, or if lesser, receive a tax credit in the amount of total income tax and Medicare tax withholdings and Medicare tax paid during the calendar year of which the taxable year begins. A tax-exempt small employer is exempt under the Internal Revenue Code Section 501(c) and meets the above three factors.

Answer 30

25%

Question 31

According to the legislation, an employer’s coverage is not “affordable” when the employee’s contribution toward the employer’s lowest-cost self-only premiums would exceed ______ of household income.

Answer 31

9.5%

Question 32

TF: Larger tax credits for older Americans who face higher premiums. The amount of the premium tax credit is tied to the amount of the premium, so that older Americans who face higher premiums can receive a larger tax credit.

Answer 32

True

Question 33

TF: Cost-Effective Coverage. The amount of the premium tax credit is generally fixed based on a benchmark plan (which may be age- adjusted within PPACA limitations), so families that choose to purchase coverage that is less expensive than the benchmark plan will pay less toward the cost of that coverage.

Answer 33

True

Question 34

TF: Credit is refundable. The premium tax credit is fully refundable, so even moderate-income families who may have little federal income tax liability (but who may pay a higher share of their income towards payroll taxes and other taxes) can receive the full benefit of the credit, officials say.

Answer 34

True

Question 35

TF:; Covers premiums upfront. Since many low- and moderate-income families may not have sufficient cash on hand to pay the full premium upfront, an advance payment of the premium tax credit will be made by the Department of the Treasury directly to the insurance company. This advance payment will assist families to purchase the health insurance they need

Answer 35

True

Question 36

TF: If a business does not provide insurance and if one or more employees receive federal insurance subsidies, the business will pay $2,000 per employee (minus the first 30). So a non-providing business with 50 employees, one of whom is subsidized, would pay $40,000 = $2,000 x (50 – 30).

Answer 36

True

Question 37

TF: If a business does provide insurance, and if one or more employees receive insurance subsidies, the business will pay $3,000 per subsidized employee or $2,000 per employee (minus the first 30) –whichever is less. So a providing business with one subsidized employee would be fined $3,000. With 14 or more subsidized employees (above the tipping point for the formula), the penalty for a 50-employee firm would be $40,000.

Answer 37

True

Question 38

The Patient Protection and Affordable Care Act defines a full-time employee as one who works at least how many hours a month?
Select one:
a. 120 hours
b. 144 hours
c. 140 hours
d. 160 hours

Answer 38

A

Question 39

The Patient Protection and Affordable Care Act requires a gold health insurance plan to meet what specific actuarial value?
Select one:
a. 70%
b. 80%
c. 90%
d. 100%

Answer 39

B

Question 40

The Patient Protection and Affordable Care Act requires an employer who gives an “Adverse determination” notice to a claimant to provide which of the following?
Select one:
a. The reasons for the denial of the claim
b. All of the above
c. How to appeal
d. To tell the claimant what information might be missing

Answer 40

B

Question 41

What does the Patient Protection and Affordable Care Act require before an employee’s health insurance plan’s coverage can be rescinded?
Select one:
a. All of the above
b. Prior written notice must be given to the Maryland Insurance Board
c. Prior written notice must be given to the affected employee
d. Prior written notice must be given to the federal Patient Protection and Affordable Care Department

Answer 41

C

Question 42

What is the Medical Loss Ratio (MLR) for large group plans?

Select one:
a. 85%
b. 80%
c. 75%
d. 70%

Answer 42

A

Question 43

TF: The Medical Loss Ratio (MLR) is 80% for individual and small business plans, and it is 85% for large group plans.

Answer 43

True

Question 44

As mandated in the Patient Protection and Affordable Care Act, what will be the lifetime dollar limit for health insurance plans?
Select one:
a. $5,000,000
b. $3,000,000
c. $10,000,000
d. There will be no lifetime dollar limits.

Answer 44

D

Question 45

For small group plans, the Patient Protection and Affordable Care Act mandates insurance companies to spend what percentage of all premiums collected on health care?
Select one:
a. 90%
b. 60%
c. 70%
d. 80%

Answer 45

D

Question 46

The Federal Patient Protection and Affordable Care Act is sometimes referred to as:
Select one:
a. Romney Care
b. National Health Insurance
c. Federal Healthcare
d. Obama Care

Answer 46

D