Chapters 12-14

Question 1

A type of health insurance policy that replaces that insured’s income if he or she becomes disabled and unable to work.

Answer 1

Disability Income Insurance

Question 2

A health insurance provision that allows renewability if certain stated conditions are met by the insured

Answer 2

Conditionally Renewable

Question 3

A health insurance provision that gives the insurance company the right to terminate coverage at the policy anniversary, usually an annual premium date.

Answer 3

Optionally Renewable

Question 4

A renewability provision with a health insurance contract that allows the insurance company, at its option, to terminate or renew the policy

Answer 4

Cancellable

Question 5

A provision that gives the policyholder the right to review the policy for a stated number of days, usually 10, and receive a full refund if the policy is returned to the insurance company

Answer 5

Free Look

Question 6

A health insurance rider that takes away coverage that the policy would normally provide because of a preexisting condition.

Answer 6

Exclusion Rider

Question 7

A specified number of days after the policy’s effective date that coverage is not available for sickness, though accidents are covered.

Answer 7

Probationary Period

Question 8

Mandatory insurance purchased by almost all employers to cover an
employee’s injury, disability, death, or medical expenses due to occupational causes.

Answer 8

Workers Compensation

Question 9

An option or rider that allows the policyowner to purchase additional coverage without evidence of insurability.

Answer 9

Guaranteed Insurability

Question 10

A renewability provision with a health insurance contract that allows the insurance company, at its option, to terminate or renew the policy.

Answer 10

Cancellable

Question 11

A health contract that allows the policyowner to continue the policy for a substantial period of time by paying the premium. Continued coverage is guaranteed; however, the premium rate can change for
classes of insureds.

Answer 11

Guaranteed Renewable

Question 12

A health insurance provision that allows renewability if certain stated conditions are met by the insured, such as full-time employment to age
65

Answer 12

Conditionally Renewable

Question 13

A health insurance provision that gives the insurance company the right to terminate coverage at the policy anniversary, usually an annual
premium due date.

Answer 13

Optionally Renewable

Question 14

A health insurance contract that guarantees the continuation, for a
substantial period of time, and the premium

Answer 14

Noncancellable

Question 15

Service organization that geographically provides protection against the
cost of hospitalization. _________ pays benefits directly to the participating hospitals.

Answer 15

Blue Cross

Question 16

Service organization that geographically provides protection against the
cost of surgeries and other medical care. ___________ pays benefits directly to the participating medical providers.

Answer 16

Blue Shield

Question 17

Provider of health coverage by contracting with a group of doctors, clinics and hospitals to provide health services to subscribers, also known as members, who pay premium in advance of services needed

Answer 17

Service Organizations

Question 18

An organization that provides health services to individuals, typically employees, known as members. The _____ contracts with a select group of doctors and other medical practitioners to provide services to
members at agreed-upon costs, prepaid on behalf of the member

Answer 18

Health Maintenance Organization (HMO)

Question 19

An organization of healthcare providers that agree to provide health care services at a predetermined negotiated fee.

Answer 19

Preferred Provider Organization (PPO)

Question 20

A type of health maintenance organization (HMO) that allows the member to use in-network or out-of-network services; thus giving members freedom of choice.

Answer 20

Point of Service Plan (POS)

Question 21

A method of health care to possibly prevent illnesses before they occur.
This is accomplished through routine physical examinations and immunizations (a set of shots given to children at different ages to help
keep them from getting dangerous childhood diseases).

Answer 21

Preventive Care

Question 22

An arrangement were a primary care physician coordinates all health
care for the HMO member.

Answer 22

Gatekeeper

Question 23

A method of payment for health services in which the medical provider is paid a fixed amount for each patient without regard to the actual number or nature of services provided. This is a common payment method for an HMO’s primary care physicians.

Answer 23

Capitation

Question 24

A payment system where the medical provider is paid at the time service is needed.

Answer 24

Fee-For-Service

Question 25

System of delivering health care and health care services by selected providers, programs of ongoing quality control and utilization review, and financial incentives for members to use these selected providers and procedures

Answer 25

Managed Care

Question 26

A type of health benefit plan in which the insureds select their health care providers, manage their health expenses, and assume more control in protecting their health.

Answer 26

Consumer-Driven Health Plans

Question 27

A plan that allows employees to pick from a selection of qualified fringe benefits. The participating employee then pays into the ___ through
payroll deductions. Disbursements from the ___ are made to pay for
unreimbursed medical and dental expenses, deductibles and copayments.

Answer 27

Flexible Spending Account (FSA)

Question 28

An arrangement where the employer reimburses an employee for health expenses not covered by the group health insurance plan, such as
deductibles or coinsurance amounts. The employer determines how much it will pay for medical expenses and shifts the allocated dollars to
the employee. The employee decides how much will be spent from the account.

Answer 28

Health Reimbursement Account (HRA)

Question 29

A tax advantaged savings plan that covers current and future medical expenses. In order to establish this account, the participant must have a
high-deductible health insurance policy and not be covered by any other
health insurance plan.

Answer 29

Health Savings Plan (HSA)

Question 30

A policy provision that defines the scope and limits of coverage. It’s the insurance company’s promise to pay according to the policy.

Answer 30

Insuring Clause

Question 31

The part of the insurance contract that sets forth the amount, renewal, and frequency of premium payments by the policyowner.

Answer 31

Consideration Clause

Question 32

A health insurance policy that only covers room and board, if the insured stays overnight in a hospital and the miscellaneous expenses (such as, testing, x-rays, lab work, etc.) that occur because of that stay. It provides first dollar benefits by the insurer, but low coverage limits.

Answer 32

Basic Hospital Expense

Question 33

A health insurance policy that only covers outpatient physician services and procedures. It provides first dollar benefits by the insurer, but low coverage limits.

Answer 33

Basic Medical Expense

Question 34

A health insurance policy that only covers surgeries, surgeons, and anesthesiologists. It provides first dollar benefits by the insurer, but low coverage limits.

Answer 34

Basic Surgical Expense

Question 35

A health insurance policy that does not have a deductible. The company pays first when a claim is submitted.

Answer 35

First Dollar Coverage

Question 36

A health insurance policy that offers broad coverage and high benefits for hospitalization, surgeries, and physician services subject to
deductibles and coinsurance.

Answer 36

Major Medical Expense Insurance

Question 37

The amount of loss paid by the policyowner before the health insurance policy pays the claim

Answer 37

Deductible

Question 38

Under major medical expense insurance, the company insures a percentage of the potential loss and the policyowner pays the remaining percentage. For example, 80/20 means that the company pays 80% of the loss (after the deductible has been met) and the policyowner pays
20% of the loss. It is also called percentage participation

Answer 38

Coinsurance

Question 39

A type of traditional medical expense insurance designed to reimburse the policyowner for out-of-pocket medical expenses. It characterized by
typically low deductibles ($100-$500), coinsurance and stop loss limits.

Answer 39

Comprehensive Major Medical Expense Insurance

Question 40

With supplemental major medical expense, it is an amount that is paid by the policyowner after the insurer first pays the basic plan portion
when covered expenses are submitted. See Supplementaryl Major Medical Policy and basic expense policies

Answer 40

Corridor Deductible

Question 41

In major medical expense policies, a stated dollar limit to the policyowner’s maximum out-of-pocket expenses. Once this limit is reached for the policy year, the insurer pays 100% of remaining expenses.

Answer 41

Stop Loss Provision

Question 42

Annual cost paid by a policyowner or member for deductibles, coinsurance, or copayments

Answer 42

Maximum Out-of-Pocket

Question 43

With health insurance, charges other than room and board for a hospital stay. For example: x-ray, testing, laboratory fees, etc. Sometimes called
ancillary expenses.

Answer 43

Miscellaneous Expenses