5 Flashcards
(32 cards)
S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a:
Medicare Supplement
High-deductible health plan
Low-deductible health plan
Flexible savings plan
The correct answer is “High-deductible health plan”. To be eligible for a Health Savings Account, an individual must be covered by a high-deductible health plan (HDHP), must not be covered by other health insurance (does not apply to accident insurance, disability, dental care, vision care, long-term care), must not be eligible for Medicare, and can’t be claimed as a dependent on someone else’s tax return.
Which of the following phrases refers to the fees charged by a healthcare professional?
Usual, customary, and reasonable expenses
Deductible
Hospital expense
Coinsurance
The correct answer is “usual, customary, and reasonable expenses”. The insurance phrase which considers a particular fee charged by a physician, dentist, or other health professional is usual, customary, and reasonable expenses.
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
Reimbursement benefit
Medical offset benefit
Restoration of unused benefit
Restoration of used benefit
The correct answer is “Restoration of used benefit.” A restoration of used benefit provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time.
Comprehensive Major Medical policies usually combine:
Basic/Hospital/Surgical with Disability Income coverage
Major Medical with Disability Income coverage
Major Medical with Basic Hospital/Surgical coverage
Basic Hospital/Surgical with Accidental coverage
The correct answer is “Major Medical with Basic Hospital/Surgical coverage”. A Comprehensive Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.
All of the following statements about Major Medical benefits are true, EXCEPT:
The deductible can be expressed as a fixed dollar amount
Benefits are generally expressed as a percentage of eligible expenses
Benefits have no maximum limit
The benefit period begins only after a specified amount of expenses have accrued
The correct answer is “Benefits have no maximum limit”. Major Medical benefits normally have a maximum limit.
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
Claim payment is negotiated between physician and patient
Determined by the terms of the policy
Claim payment is equal to physician’s actual charges
Determined by the schedule of benefits from the hospital
The correct answer is “Determined by the terms of the policy”. Under a basic hospital/surgical expense policy, the amount of the patient’s claim payment will be based on the terms of the policy.
Which of the following BEST describes a Hospital Indemnity policy?
Coverage that reimburses an insured for surgeon expenses
Coverage that pays for hospital room and board
Coverage that replaces lost income due to hospitalization
Coverage that pays a stated amount per day of a covered hospitalization
The correct answer is “Coverage that pays a stated amount per day of a covered hospitalization”. The typical Hospital Indemnity policy pays a stated amount per day of a covered hospitalization.
Which of the following situations does a Critical Illness plan cover?
Leukemia
Alcohol rehabilitation
Asthma
Severe car accident
The correct answer is “Leukemia”. Leukemia is a type of cancer and would be covered under a Critical Illness plan.
Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?
Health insurance premiums can be reimbursed to the employee
Any unused amounts are added to employee’s gross income
If the employee had a qualified medical leave from work, lost wages can be reimbursed
The correct answer is “If the employee paid for qualified medical expenses, the reimbursements may be tax-free”. Under a Health Reimbursement Arrangement, reimbursements may be tax free if the employee paid for qualified medical expenses.
Which of the following statements BEST describes dental care indemnity coverage?
Very limited list of providers
Services are reimbursed after insurer receives the invoice
In-network dentists must always be used
Services are reimbursed before the insurer receives the invoice
The correct answer is “Services are reimbursed after insurer receives the invoice”. Dental care indemnity plans reimburse services only after the carrier receives the bill.
Which of these options can an individual use their medical flexible spending account to pay for?
Household expenditures
Vitamins and supplements
Cosmetic procedures
Prescription drugs
The correct answer is “Prescription drugs”. Prescription drugs are an allowable expense when paid for by a medical flexible spending account.
A characteristic of Preferred Provider Organizations (PPOs) would be:
Not allowed to see out-of-network physicians
A primary care physician is required
Discounted fees for the patient
Physicians are paid on a capitation basis
The correct answer is “Discounted fees for the patient”. Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.
Generally, how long is a benefit period for a Major Medical Expense Plan?
One year
Three year
Four year
Two year
The correct answer is “One year.” Generally, Major Medical Expense Plans have a one year benefit period.
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Lost income caused by a hospital stay
Care given at a nursing home
Surgically removing a facial birthmark
Treating a wound from a soldier injured at war
The correct answer is “Surgically removing a facial birthmark”. A Basic Hospital/Surgical policy would most likely cover cosmetic surgery to remove a facial birthmark.
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?
Minimizes the need for deductibles
Minimizes the waiting period
Discourages adverse selection
Discourages overutilization of the insurance coverage
The correct answer is “Discourages overutilization of the insurance coverage”. A purpose of the Coinsurance clause in a Major Medical Policy is to discourage overutilization of the insurance coverage.
Deductibles are used in health policies to lower:
the coinsurance amount
overuse of medical services
the incidents of fraud
adverse selection
The correct answer is “overuse of medical services”. One of the primary reasons for using deductibles in health policies is to reduce the overuse of medical services.
The benefits under a Disability Buy-Out policy are:
normally paid after a short elimination period
normally paid in installments
payable to the company or another shareholder
taxable to the beneficiary
The correct answer is “payable to the company or another shareholder”. Benefits payable under a Disability Buy-Out policy are paid to the company or another shareholder.
When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
Contributory
Joint
Noncontributory
Participating
The correct answer is “Contributory”. Group plans where employees pay a portion of the premiums are called contributory plans.
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?
Multiple Employer Welfare Arrangement
Co-op Arrangement
Multiple Employer Trust
Health Maintenance Organization
The correct answer is “Health Maintenance Organization”. A Health Maintenance Organization (HMO) contracts with doctors and hospitals to provide medical benefits to subscribers at a predetermined price.
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Business Continuation
Disability Buy-Sell
Group Disability
Key Person Disability
The correct answer is “Disability Buy-Sell”. A disability buy-sell plan allows the remaining partners to buy out the interest of the disabled business partner.
P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the
Dismemberment Sum
Remnant Sum
Principal Sum
Capital Sum
The correct answer is “Capital Sum”. The capital sum is the amount payable for the accidental loss of eyesight or for an accidental dismemberment. It is usually a percentage of the principal sum and varies according to the severity of the injury.
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
Accident Reimbursement Accounts
Accident Savings Plans
Disability Income policy
Blanket Accident policy
The correct answer is “Blanket Accident policy”. A Blanket Accident policy provides Accidental Death coverage to airplane passengers.
All of the following statements regarding group health insurance is true, EXCEPT:
A master contract is issued for the group
Premiums are usually determined by the claims experience of the group
Group health insurance premiums are typically lower than individual health insurance premiums
An individual policy is given to each member
The correct answer is “An individual policy is given to each member”. In group health insurance, each member receives a certificate of insurance, not an individual policy.
Which of the following BEST describes how a policy that uses the “accidental bodily injury” definition of an accident differs from one that uses the “accidental means” definition?
Benefits are taxable
More restrictive
Less restrictive
Double indemnity
The correct answer is “Less restrictive”. A policy that uses the “accidental bodily injury” definition of an accident is less restrictive than the one that uses the “accidental means” definition.
