Health Insurance Flashcards
All of the following statements about noncancellable policies are true EXCEPT
the insurer may increase the premium rate after the policy is in effect provided it does so by classes of insured.
Which of the following qualified as a compensable injury under Workers Compensation coverage?
A factory worker fractures an elbow while working overtime.
Which of the following represent certain consumer safeguards enacted by states and patterned after a model act developed by NAIC?
Information and Privacy Protection Act
The optional short-term disability income benefit that pays a lump sum for specified injuries is called the
elective indemnity benefit.
The type of health care provider that provides both the health care services and the health care coverage is a
Health Maintenance Organization.
Dread disease, travel accident, vision care and hospital indemnity policies are all examples of
Limited Policies
Which of the following are NOT eligible for Medicare coverage?
People with any life-threatening condition
A company that is licensed to sell insurance in particular state is
an authorized company
Optional Provisions 1 and 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following?
Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established.
With regard to group insurance, who has the responsibility to apply for coverage, provide information about the group, maintain the policy and pay premiums?
The master policyowner
What term describes the concept that the insurer and the insured share in the cost of medical expenses, with the insurer bearing the greater share?
Coinsurance
Trent Bixley is named by the insured, Nancy Bixley, as the first in line to receive the death benefit provided by Nancy’s accident policy. Their daughter Elaine is named as second in line to receive the benefit. Which statement is correct?
Trent is the primary beneficiary and Elaine is the contingent beneficiary.
The type of health insurance policy most likely used to cover all students attending a large university is
a blanket policy
An applicant for insurance may pay the initial premium and receive a document from the agent indicating that if the policy is issued as requested, coverage begins on the date of the document. What is this document called?
Conditional receipt
Under Workers Compensation, a disability that is a permanent physical impairment leaving the individual incapable of performing the previous regular occupation, but capable of performing some other type of work, is a
permanent partial disability
A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to his policy?
Waiver of premium
Which part of Medicare requires premium payment by most eligible participants?
Part B, supplementary medical insuranace
Select the correct statement about long-term care policies.
Present policies are most likely to pay benefits regardless of the level of care required by the insured.
In noncontributory group plans, how many eligible employees must be covered by the plan?
100%
Brenda names her husband as the beneficiary of the accidental death benefit in her health policy. She has relinquished her right to change the beneficiary designation. According to Required Provision 12, Brenda’s husband is
an irrevocable beneficiary
Under a credit health policy, what is the maximum amount of any accidental death benefit included?
The amount of outstanding indebtedness at any given time.
The factor in premium computation that has to do with the recordkeeping and statistical analysis insurance companies perform is
experience
Before Cranston was disabled, he was a full-time engineer earning about $70,000 annually. Now, 2 years later, he is able to work part-time, earning about $25,000 annually. It is likely that Cranston would be classified as
partially disabled
Select the correct statement about converting from a family policy to an individual policy.
Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends.
Primary support for Medicare Part A comes from
social security payroll taxes
When medical expenses policies do not state specific dollar benefit amounts, but instead base payments upon the charges for like services in the same geographical area, benefits are designated as which of the following?
Usual, customary and reasonable charges
As compared to individual disability income policies, group disability income policies are generally
less costly and have more liberal provisions
Required Provision 7 indicates that except in the absence of the insured’s legal capacity, if it was not reasonably possible for the insured to provide proof of loss as required in a policy, the latest time the proof of loss may be furnished is
1 year from the time proof is otherwise required
Many major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses; the insurer pays 100% of remaining covered charges. This is referred to as the
stop-limit
What term describes a situation where a policyowner transfers a portion of his or her rights in an insurance policy to another party in order to secure a debt to that party?
Collateral Assignment
An insured’s disability income policy defines total disability as “the insured’s inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience.” This definition is known as the
“any occupation” definition and is more restrictive than other definitions.
A certain major medical policy states a maximum number of days for which convalescent care will be paid as well as a maximum number of X-rays that will be paid for under any one claim. These are examples of
inside limits
All Medicare supplement (or Medigap) policies must
have the same core benefits
Which of the following most accurately and completely described an application?
A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in application.
A Health Maintenance Organization (HMO) in a certain city contracts with an independent medical group to provide services to HMO subscriber. The HMO pays the group organization, rather than paying the individual medical practitioners. What type of HMO structure is this?
Group Model
Select the correct statement below.
COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans.
In a disability income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only illness. The term that describes this interim is the
probationary period
The usual payment arrangement under a Preferred Provider Organization contract is
a fee for each service
Which of the following accurately describes the “free look” provision?
Allows the insured to look over the issued policy for a specific number of days and return it for a premium refund if desired.
Jay, who is employed by Carson Company, is assigned to work temporarily in another state. While in the other state, Jay is injured on the job. He is entitled to benefits of the Workers Compensation law in the state in which he was hired even though his injury occurred in a different state. This indicates that the Workers Compensation law in the state where Jay was hired
includes extraterritorial provisions
A health insurance policy that the insurer may choose not to renew only on the premium due date is called
an optionally renewable policy
In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do?
enroll within a specified eligibility period
Second surgical opinions, precertification, concurrent and retrospective reviews and outpatient/ambulatory services are all elements of a cost-containment system commonly known as
case management
Each of the following would be found in the insuring clause of an insurance policy EXCEPT
name of the insured
Luis and Margarita Rodriguez have a family health policy that includes 2 riders. One rider excludes coverage for Margarita’s existing diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What 2 riders are attached to this policy?
Impairment and guaranteed insurability riders
Normally, Blue Cross/ Blue Shield makes payments for medical expenses
directly to the providers
When may agents change a policy or waive its provisions according to Required Provision 1?
Never
Under what circumstances do major medical policies usually provide for restoration of benefits?
Restoration usually occurs after a specified dollar amount of benefits has been exhausted and after the insured has proved insurability.
What is the minimum grace period, provided in Required Provision 3, for all policies other than monthly or weekly premium policies?
31 days
A certain health insurance policy states that the insurer will not refuse to renew the policy and furthermore, the insurer may not cancel the policy. However, the insurer may change the premium by class or insureds. This policy is
a guaranteed renewable policy
All of the following are alternatives an insurer has when asked to insure a substandard risk EXCEPT
issue the policy with a probationary period after which the insurer may continue or cancel the policy.
Which of the following is NOT true concerning the notice of claim and claim forms according to Required Provisions 5 and 6?
The insured must file the notice of claim within 10 days or as soon after as reasonably possible.
Which of the following waives the elimination period in a disability policy?
Hospital confinement rider
The Medical Information Bureau is a nonprofit organization supported by
insurance companies
Optional Provisions 3, 4, 5 and 6 deal with situations where an insured can receive more money from loss of time benefits than from working, or more for reimbursement of medical expenses than these services costs. This is
called overinsurance and can be remedied by each insurer’s paying proportionate benefits or a single insurer allowing the insured to choose the policy from which benefits will be paid.
A disability that is presumed to result from the same or a related cause of prior disability is called a
recurrent disability
According to Optional Provision 8, if the insurance company cancels a policy, on what basis must prepaid premiums be returned to the insured?
Pro rata basis, which means all unearned premium is returned to the insured.
Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applied to the dollar amount the insured must pay between the basic policy and the major medical coverage?
Corridor deductible
All of the following are reasons an application is important EXCEPT
the application becomes part of the insuring clause when attached to the policy
A Medicare SELECT policy differs from a regular Medigap policy in that it
neither provides more coverages or costs more
Which of the following premium payment modes will result in the highest total premium?
Monthly
Employer-paid premiums for employee group health insurance are generally
Both tax-deductible to the employer and non-taxable to the employees
Optional Provision 9, which deals with conformity to state statutes, provides
that policy provisions in conflict with state statutes where in the insured resides are automatically amended to conform to the minimum requirements of law.
When an insurer cedes part of an insured’s coverage to another insurance company, retaining only part of the risk for itself, the insurer is engaging in
reinsurance
Which statement is correct?
Concealment is the withholding of information that should have been provided to an insurer.
The employees of Ace Trucking company must each pay a portion of the premium for their group insurance. This means they are members of a
contributory group plan
According to Required Provision 11, the insured is prevented from filing suit against the insurer for at least
60 days and not longer than 3 years form the date of proof of loss.
Which of the following would NOT be a likely consideration in determining premium rates for group health insurance?
Whether the business is a close corporation or publicly held corporation.
In Health Maintenance Organizations, the use of a primary care physician or PCP is common as part of
the gatekeeper system
Which of the following statements is NOT true concerning a coordination of benefits situation?
To prevent overinsurance, the secondary insurer does not pay benefits.
Which of the following describes a multiple employer trust (MET)?
A legal entity that small employers may join to become eligible for group insurance.
Oswald changes jobs in June. He had been covered by group health for 3 months at his previous job. His new job offers group health coverage with a 6 month exclusion for preexisting conditions. Assuming that Oswald enrolls at the earliest opportunity in the group health program at his new job, when will any preexisting conditions Oswald may have be covered in is new group health plan?
Immediately
Which statement below is correct concerning dental care policies?
Comprehensive dental care policies usually pay a percentage of reasonable and customary charges for nonroutine treatment
An insured’s accident policy uses the phrase “accidental bodily injury” and/or resulting death This phrase
is less restrictive than the phrase “accidental means”
Required Provision 4 addresses reinstatement of a lapsed policy. According to this provision, when an insured applies for reinstatement and receives a conditional receipt, how long does the insurer have to approve or deny reinstatement before the policy will be automatically reinstated?
45 days from the date of the conditional receipt
In order to be qualified, a long-term care policy must require assistance with how many activities of daily living (ADLs) before benefits may be paid?
2
A third-party administrator is
an outside organization that manages employers’ self-insured plans.
Group credit health insurance requires all of the following EXCEPT
a medical exam
All of the following are benefits provided under Part A of Medicare EXCEPT
physicians’ services for inpatient care
Which of the following is an example of a producer cooperative?
Blue Cross/Blue Shield organization
What is a cancellable policy?
A policy the insurer may cancel at any time by returning the unearned premium.
The Health Maintenance Organization concept that service providers are paid a fixed monthly fee for each member is called
capitation
Which of the following correctly describes Medicaid?
Provides medical benefits for certain low-income people, for the disabled and for families with dependent children.
Major medical policies may include a type of deductible wherein the insured pays a new deductible amount for each different event that causes medical expenses to be insured. This is the
per-cause deductible
Which of the following is a requirement for payment of Social Security disability benefits?
All of the above
Health Maintenance Organizations are required to provide all of the following EXCEPT
prescription drugs
What is the underlying purpose of a second injury fund?
To promote the employment of previously injured or physically handicapped workers
Which of the following statement regarding claims payments is NOT included in Required Provisions 8 and 9?
If there is no beneficiary designated for any death benefits payable, the insurer will pay the benefit to any relative of the insured by blood or marriage who appears to be entitled to it.
When are disability income benefits received as nontaxable income to the recipient?
When the employee has paid the premium
Medicare supplement insurance is designed to
pay at least some of the health care costs that Medicare will not pay.
When an insured holds more than one occupation, and occupation is used to classify the risk, the insurer will generally classify the insured according to the occupation
that is most hazardous
When a Health Maintenance Organization chooses a limited number of health care providers to provide services to its subscribers, this is known as
a closed panel
Who pays the taxes that finance Social Security benefits?
employers and employees, in equal contributions
What type of disability policy covers a fixed period of time and provides funds for long-term commitments if an owner or key employee of a business is disabled?
Reducing term disability coverage
According to Required Provision 2, unless an insured has made fraudulent misstatements, a policy is incontestable after
2 years
Individuals covered by a group plan receive
certificates of insurance
Under Optional Provision 7, when premiums are unpaid at the time a claim is submitted, the insurer may
deduct unpaid premiums from benefits before paying the claim.
A policy that pays surgical expense benefits does not schedule the approved benefit payable for every type of surgery. Instead, surgeries not listed are paid on the basis of a comparison to one or more types of commonly-performed major surgeries that are scheduled. Under this arrangement, the unscheduled surgeries are paid on the basis of
their relative value
Which of the following is NOT classified as an occupational disease under Workers Compensation?
Sam, a mixer at a paint factory with poor ventilation who develops a nervous disorder related to paint fumes
Required Provision 10 indicates that if the insurer wants to have an autopsy performed while a claim is pending, the insurer
May do so if it is not forbidden by law and if the insurer pays for it.
