health ch 1

Question 1

What are base plans?

Answer 1

Base plans cover in-hospital only. There is no deductible or coinsurance on a base plan.

Question 2

What will the surgical expense plan pay for?

Answer 2

surgical expense policy will pay a claim up to the policy limit. They are the only health insurance policies that may use a relative value schedule.

Question 3

What is COBRA?

Answer 3

COBRA (a federal regulation applying to group medical expense policies) allows an employee to continue group coverage for 18 months in case he or she quits or is released from employment.
Under COBRA, the family of a deceased or disabled employee may continue group coverage for another 36 months.

Question 4

Interim polices

Answer 4

Interim policies are short-term health insurance plans purchased to fulfill temporary needs (6 months or less). They are often used to cover gaps in insurance between jobs.

Question 5

Who does critical illness plans pay to?

Answer 5

Critical illness plans pay the benefits directly to the insured.

Question 6

What happens if claims are not paid immediately

Answer 6

Under the legal actions provision, if a claim is not paid immediately, the claimant must wait at least 60 days before filing a lawsuit for failure to pay. Such suits must be filed within 3 years of the original loss.

Question 7

What is guaranteed insurance rider

Answer 7

guaranteed purchase option is a rider which allows the insured to purchase additional coverage at certain intervals without a physical exam. This rider is also known as the guaranteed insurability rider (GIR).

Question 8

Noncancellable policy

Answer 8

noncancellable policy, the insurance company cannot change the coverage or the rates, but can decline to offer renewal.

Question 9

Guaranteed renewable policy

Answer 9

guaranteed renewable policy, the insurance company cannot change the coverage; however, it can change the rates by class, although not individually……
At the option of the insured, a guaranteed renewable policy is renewable by paying the premium up to a certain, specified age (usually aged 65).

Question 10

If a policy is noncancellable and guaranteed renewable (the best kind), the company cannot….

Answer 10

If a policy is noncancellable and guaranteed renewable (the best kind), the company cannot change the coverage or rates, AND must offer renewal.

Question 11

Part A

Answer 11

Part A of Medicare provides hospital insurance.

Question 12

Part B

Answer 12

Part B of Medicare (medical insurance) is partially funded by user premiums.
Medicare Part B has a premium, coinsurance, and a deductible which have amounts that are set annually. The amount paid by Social Security is dependent upon the primary insurance amount (PIA) of the insured.
The 20% Medicare Part B coinsurance deductible must be covered by Medigap core benefit.
Medicare Parts B and D require the insured to pay a monthly premium, but are also heavily subsidized by the federal government.

Question 13

Part C

Answer 13

Medicare Part C sometimes has a premium, and in some cases it does not.
Those who enroll in Part C of Medicare (Medicare Advantage) do not need to purchase a Medicare supplement.

Question 14

Part D

Answer 14

In order to be eligible for Part D of Medicare (prescription drug insurance), one must be enrolled in Medicare Part A or in Parts A and B.
A retiree may supplement Medicare by staying enrolled in his or her former employer’s group health plan, buying a Medigap policy, or enrolling in a managed care plan through an HMO.

Question 15

Subrogation

Answer 15

Subrogation allows the insurance company to sue the negligent party to recover damages they have paid out.

Question 16

Taxable or not tax deductible

Premiums for individual disability income or AD&D policies

Answer 16

not taxable

Question 17

Taxable or not tax deductible

Premiums paid by an individual on a medical expense policy

Answer 17

may be tax deductible if they exceed a certain percentage of that individual’s income

Question 18

Taxable or not tax deductible

Premiums paid by an employer on a group health policy such as medical expense

Answer 18

tax deductible, since this is a fringe benefit to the employees.

Question 19

Taxable or not tax deductible

AD&D benefits paid to a beneficiary

Answer 19

Not taxable

Question 20

Taxable or not tax deductible

If the employer deducts the premium on a group policy

Answer 20

benefits are taxable.