Chapter 8: Health Plans

Question 1

Employer Administered Plans: In ______ plans, the employer provides funding for claim payments for its employees and their dependents.

Answer 1

Self-Funded

Question 2

The self-funded plan can be supplemented by a ____-_____ contract so the employer’s liability is limited and an insurer will pay the claims in excess of the employer’s expected claims.

Answer 2

Stop Loss

Question 3

Employer Administered Plans: In ______ plans, the employer provides the funding, and the insurer handles all claims processing.

Answer 3

Administrative Services Only

Question 4

Employer Administered Plans: In_______ plans, An employer can contract out the claims processing to a _____ (same answer), which will lower the administrative costs that would have been charged by the insurance company.

Answer 4

Third Party Administrator

Question 5

_______ ______can be used by charitable organizations to fund employee health benefit plans.

Unlike traditional self-funded plans, contributions to these are immediately tax deductible, and earnings grow tax-deferred.

Answer 5

501(c)(9) Trusts

Question 6

Employers with few employees, usually less than _____ or ____ depending on state law, can establish a small employer health plan.

Answer 6

25 or 50

Question 7

_____ ____ allow employees to choose which health care benefits and coverages they want from a list of options. This allows employees to pay for and receive health care coverage catered to their unique needs.

Answer 7

Cafeteria Plans - best utilized for larger employers

Question 8

Health plans can be provided through ______ and _________

These are trusts established by two or more employers to provide health coverage to their employees.

Answer 8

Multiple Employer Trusts (METs)
Multiple Employer Welfare Arrangements (MEWAs)

Question 9

______ ______ provides medical expense benefits, disability income benefits, rehabilitation and occupational therapy benefits, and a one-time death benefit.

Answer 9

Workers Compensation

Question 10

_____ plans are employer sponsored plans, such as wellness plans, which foster healthier lifestyles for employees. Such wellness plans focus on healthy diets and physical exercise (e.g., Weight Watchers or Biggest Loser).

Answer 10

Worksite

Question 11

Two types of “other group” plans?

Answer 11

Blanket
Franchise

Question 12

_______ plans insure a group of individuals while they are participating in the same activity, such as a group of high schoolers going on a class trip

Answer 12

Blanket

Question 13

_______ plans permit small groups to obtain health insurance. The coverage usually costs less and contains some of the benefits of group health insurance.

Answer 13

Franchise

Question 14

TF: Franchise plans are the same as group plans in that the entire group is underwritten under one policy (instead of individual policies)

Answer 14

False - In franchise plans, each individual is issued an individual policy

Question 15

TF: In a Franchise plan, each individual pays separate premiums

Answer 15

False - the franchise only pays one group premium

Question 16

TF: Franchise is not technically group coverage

Answer 16

True

Question 17

The producer must ensure the replacement is for the ______ benefit.

Answer 17

insured’s

Question 18

The ______ is responsible for comparing the existing coverage with the proposed replacing coverage.

Answer 18

Producer

Question 19

The producer should discuss the consequences of policy replacement, such as ____ _____ and _______, with the insured.

Answer 19

policy exclusions
limitations

Question 20

The length of time pre-existing conditions may be excluded varies by type of health insurance policy and the state insurance laws regulating such policies, but the conditions are typically excluded if pre-existing for more than ____ months.

Answer 20

18

Question 21

TF: Pre-existing conditions may be excluded from the replacing policy for a certain period of time.

Answer 21

True

Question 22

The producer should compare the ______, _____ and ______ of the replacing policy with that of the existing policy, so the insured is aware of the differences between the policies.

Answer 22

benefits
limitations
exclusions

Question 23

_______ is performed for replacement policies in health insurance

Answer 23

Underwriting

Question 24

TF: The replacing policy will typically not be issued if it provides the same benefits, exclusions, and limitations as the insured’s existing policy.

Answer 24

True

Question 25

TF” The producer must avoid misrepresenting the replacing policy. Any misrepresentation could cause the producer to lose their license.

Answer 25

True

Question 26

Insurers and many producers carry _____ and _____ insurance to protect themselves from liability.

Answer 26

Errors and Omissions (E&O)

Question 27

TF: E&O = Professional Liability Insurance

Answer 27

True

Question 28

In health insurance policy replacement, producers should be sure there is no ___ in ___. This means that the replacement policy’s effective date is the same date that the existing policy coverage ends.

Answer 28

Gap in Coverage

Question 29

The outline of coverage discloses important details about the policy including the following information:

Answer 29

Names of the insurer and agent
Type of policy and riders
Description of the policy benefits and coverage
Information regarding the policy exclusions and limitations
Information regarding renewal and cancellation provisions

Question 30

All of the following are underwriting considerations for replacing health insurance coverage, EXCEPT:
Select one:
a. Underwriting is performed for replacement health insurance policies.
b. The replacing policy will typically not be issued if it provides the same benefits, exclusions, and limitations as the insured’s existing policy.
c. Replacing coverage may be pricier and have fewer benefits than the existing coverage.
d. It is the applicant’s responsibility to assure the replacing coverage is for the insured’s best interest.

Answer 30

D

Question 31

Which of the following plans allows employees to receive health care catered to their unique needs?

Select one:
a. Workers Compensation
b. Worksite plan
c. Blanket plan
d. Cafeteria plan

Answer 31

D

Question 32

Which of the following is not an employer administered health plan?
Select one:
a. Workers’ Compensation
b. 501(c)(9) trusts
c. Cafeteria Plans
d. METs and MEWAs

Answer 32

A

Question 33

Adam’s Paint Company provides all funds for its group health insurance plan, but uses an insurance company for the processing of claims. Which plan does Adam’s Paint Company use?
Select one:
a. PPO
b. POS
c. ASO
d. HSA

Answer 33

C

Question 34

Who is responsible for giving the applicant the outline of coverage for a health insurance policy?
Select one:
a. Insured
b. Applicant
c. Producer
d. Underwriter

Answer 34

C

Question 35

Producers must be careful when an insured wants to replace existing health insurance coverage. Considerations do not include:
Select one:
a. Pre-existing conditions
b. Benefits, limitations and exclusions
c. Underwriting requirements
d. Claims procedures

Answer 35

D

Question 36

This type of health coverage is available to smaller groups who are not large enough to qualify for group health plans:
Select one:
a. Individual health insurance
b. Franchise insurance
c. Blanket insurance
d. Limited insurance

Answer 36

B

Question 37

An employer that has a self-funded health plan, but contracts out claims processing, has hired a(n):
Select one:
a. ASO
b. TPA
c. MET
d. MEWA

Answer 37

B

Question 38

TF: An employer can contract out the claims processing to a third party administrator (TPA).

Answer 38

True

Question 39

Which of the following is not a responsibility of the insurer in individual health insurance?

Select one:
a. Content of health policies
b. Disclosure method of policies
c. Providing the applicant the Outline of coverage
d. Control of marketing materials

Answer 39

C

Question 40

All of the following are true regarding franchise health insurance, EXCEPT:

Select one:
a. Each individual covered receives an individual policy.
b. Franchise coverage is not technically group insurance.
c. Each individual applying for coverage must complete an individual application.
d. Each individual pays a separate premium.

Answer 40

D