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ExamFX Insurance Exam Prep > Chapter 6 - Types of Health Insurance Policies > Flashcards

Chapter 6 - Types of Health Insurance Policies Flashcards

1
Q

What is the deductible for basic hospital expense coverage?

A

None

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2
Q

What is the main focus of HMO coverage?

A

Preventative care

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3
Q

How does a gatekeeper control the cost of healthcare?

A

By only making the necessary referrals

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4
Q

In exchange for a higher premium, what do PPOs offer over HMOs?

A

More flexibility between in-network and out-network providers

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5
Q

What are FSAs and how can they be used?

A

Flexible Spending Accounts can be used to pay medical and dental expenses for employees and their dependents

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6
Q

What are HSAs and how can they be used?

A

Health Savings Accounts can be used to pay for qualified medical expenses and OTC medications

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7
Q

What are the HSA nonhealth withdrawal penalties for under and over age 65?

A

20% for under 65

Nothing for over 65

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8
Q

What is an elimination period?

A

The period of time during which disability coverage will be denied to eliminate short-term disability coverage and reduce excessive claims (usually 3-6 months)

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9
Q

What is a probationary period?

A

A waiting period, often 10 to 30 days, from the policy issue date during which benefits will not be paid for illness-related disabilities

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10
Q

Compare group vs individual disability plan benefits

A

Group plan benefits are based on a percentage of the employee’s income

Individual benefits are a flat amount

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11
Q

Compare AD&D principal vs capital sum

A

Principal sum is the total face amount

Capital sum is a percentage of the face amount

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12
Q

What must be guaranteed with LTC policies

A

Long-Term Care policies must be guarantee renewable

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13
Q

What type of care may be administered by nonmedical personnel?

A

Custodial care

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14
Q

What two types of care require medically licensed personnel?

A
  • Skilled care
  • Intermediate care
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15
Q

How long can coverage for dependents under COBRA be extended in the event of the employee’s divorce or death?

A

36 months

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16
Q

What do limited policies cover?

A

Specific sickness or accident only

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17
Q

What must health insurers offer as an essential health benefit under a health plan or as a stand-alone dental plan?

A

Pediatric dental coverage (for children 18 or younger)

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18
Q

What is a MET

A

Multiple Employer Trust - a group of small employers in the same line of work that get a group insurance policy together

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19
Q

Compare own vs any occupation disability coverage

A

Own Occupation - unable to do your specific occupation. More favorable to insured.

Any Occupation - unable to do any occupation. More favorable to insurer because you might still be able to do some other occupation than your own so you would get no insurance benefit.

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20
Q

What percent of the full benefit does partial disability pay?

A

50%

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21
Q

How long is the waiting period to receive Social Security Disability benefits?

A

5 months

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22
Q

What is the PIA?

A

Principal Insurance Amount (of Social Security) - a formula that determines the level of benefits

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23
Q

What is the purpose of respite care in long-term care insurance?

A

To provide relief for a major caregiver (usually a family member)

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24
Q

What does hospital indemnity insurance cover?

A

A fixed amount each day that the insured is in the hospital

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25
Q

What six types of injuries and services will be excluded from major medical coverage?

A
  • Injuries caused by war
  • Intentionally self-inflicted injuries
  • Injuries covered by workers compensation
  • Regular dental/vision/hearing care
  • Custodial care
  • Elective cosmetic surgery
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26
Q

Who are the parties in a group health contract?

A

The employer and the insurer

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27
Q

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

A

Master policy

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28
Q

In order to be eligible for coverage by an HSA, an individual must also be covered by what type of health plan?

A

High Deductible Health Plan (HDHP)

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29
Q

Can Alzheimer’s disease be excluded from coverage under a long-term care policy?

A

No, organic cognitive disorders, such as Alzheimer’s or Parkinson’s must be covered

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30
Q

In health insurance, what is considered a sickness?

A

An illness that first arises while the policy is in force

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31
Q

What are the three types of basic medical expense insurance?

A

Hospital, surgical and medical

32
Q

What are the two types of Flexible Spending Accounts?

A

Health care accounts and dependent care accounts

33
Q

In what type of health plans are providers paid for services in advance, regardless of the services provided?

A

Pre-paid plans

34
Q

What two types of groups are eligible for group health insurance?

A

Employer-sponsored and association-sponsored groups

35
Q

What size companies are eligible for Health Reimbursement Accounts (HRAs)?

A

All sizes

36
Q

Who determines eligibility and contribution limits in HRAs?

A

The employer determines both

37
Q

When an employee covered under an HRA changes employers, what happens to the HRA?

A

It stays with the employer

38
Q

Do major-medical health plans charge a deductible?

A

Yes

39
Q

An AD&D insured loses one limb in an accident. What, if any, benefit will she be paid?

A

The capital amount in a lump sum

40
Q

Are short-term disability plans renewable?

A

No

41
Q

Hospital indemnity/hospital confinement indemnity policy will provide payment based on

A

The number of days confined in a hospital

42
Q

What are Point-of-Service (POS) plans a combination of?

A

HMOs and PPOs

43
Q

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within

A

90 days

44
Q

COBRA applies to employers with at least how many employees?

A

20

45
Q

Which long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?

A

Adult day-care

46
Q

Compare a policy that uses the accidental means definition to a policy that uses the accidental bodily injury definition.

A

Accidental bodily injury only requires the resulting injury to be unexpected

Accidental means injury requires the cause of the injury itself to be accidental

47
Q

As it pertains to group health insurance for terminated employees, COBRA stipulates that

A

Group coverage must be extended up to a certain period of time at the former employee’s expense

48
Q

What are the penalty and tax implications for an HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense?

A

There will be a tax but no penalties

49
Q

Which disability policy provision does full coverage for dismemberment or total and permanent blindnes describe?

A

Presumptive disability

50
Q

When an insurer combines two periods of disability into one, the insured must have suffered a

A

Recurrent disability

51
Q

What special policy covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage?

A

Special Risk Policy

52
Q

How often must group plans pay short-term disability benefits?

A

Weekly

53
Q

Benefit periods for individual short-term disability policies will usually continue from

A

6 months to 2 years

54
Q

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

A

Critical illness

55
Q

How do PPOs keep their costs down?

A

By channeling patients to providers that discount services

56
Q

The corridor deductible derives its name from the fact that it is applied between the basic coverage and the

A

Major medical coverage

57
Q

Group long-term disability plans provide monthly benefits usually limited to what percent of the e employees salary?

A

60%

58
Q

The type of dental plan which is incorporated into a major medical expense plan is a/an

A

Integrated plan where any deductible amount can be met by either dental or medical expenses

59
Q

What is the typical deductible for all types of basic medical expense insurance?

A

$0

60
Q

In order to maintain coverage under COBRA, how soon after termination must an employee transition coverage?

A

Within 60 days

61
Q

How are contributions to FSAs, HSAs and HRAs taxed?

A

All three are pre-tax contributions

62
Q

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

A

Diagnostic and preventive care

63
Q

An insured’s long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

A

$120 per day

64
Q

What does basic medical expense coverage definitely NOT cover?

A

Surgeon’s services

65
Q

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in Florida?

A

12

66
Q

How can a new physician be added to the PPO’s approved list?

A

Agree to follow the PPO standards and charge the appropriate fees

67
Q

In a ________ approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery

A

Relative value

68
Q

If the insured decides to go to a physician who is not a PPO provider, what happens?

A

The PPO will pay reduced benefits

69
Q

What is the minimum number of members for an association to buy group insurance for its members?

A

100

70
Q

True or false, group disability insurance is for both on and off the job?

A

False

Worker’s comp covers on the job injuries. Group disability covers off the job injuries.

71
Q

What five areas do general disability policies NOT cover?

A
  • Losses caused by war
  • Military service
  • Intentionally self-inflicted injuries
  • Overseas residence
  • Injuries suffered while committing or attempting to commit a felony
72
Q

Are LTC policies available as endorsements to both life and health policies?

A

To life only, not health

73
Q

Are LTC policies available no both individual and group basis?

A

Yes

74
Q

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

A

Conversion factor

In order to determine the amount payable for a given procedure, the assigned points (relative value) of 200 are multiplied by a conversion factor. This conversion factor represents the total amount payable per point. For example, if the conversion factor is $10 and the point value is 200, the policy would pay $2,000 for the procedure (200 x 10).

75
Q

What coverage, written in conjunction with hospital expense policies, covers surgeons’ fees, anesthesiologist, and the operating room?

A

Basic Surgical Expense

76
Q

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?

A

Employers are no longer forced to offer HMO plans

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