Chapter 7. Florida Statutes, Rules and Regulations Pertinent to Health Insurance

Question 1

What is medicare part A and what does it cover?

Answer 1

Part A: In-patient services - hospital stays, skilled nursing facility care, hospice care, and home health care

Question 2

What is medicare part B and what does it cover?

Answer 2

Part B: Out-patient services - medical services and items, including doctor visits, lab tests, medical equipment, and screenings

Question 3

What is medicare part C and what does it cover?

Answer 3

Part C: Medicare Advantage, this option bundles Part A, Part B, and sometimes Part D benefits It is offered by private insurers

Question 4

What is medicare part D and what does it cover?

Answer 4

Part D: Prescription drug coverage. It is an optional add-on service for people with original Medicare

Question 5

If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy?

Answer 5

10 days

Question 6

What are the three types of basic medical expense insurance?

Answer 6

Hospital, surgical and medical

Question 7

In group insurance, what is the name of the policy?

Answer 7

Master policy

Question 8

Who are the parties in a group health contract?

Answer 8

The employer and the insurer

Question 9

Who decides which optional provisions would be included in a health policy?

Answer 9

The insurance company

Question 10

What is the term for a period of time immediately following a disability during which benefits are not payable?

Answer 10

Elimination period

Question 11

How soon after reinstatement must health insurers provide coverage for injury and sickness?

Answer 11

Immediately for injury, 10 days for sickness

Question 12

If the insured pays an annual premium for health insurance, how long would the grace period be on the policy?

Answer 12

31 days

Question 13

How soon after notice of claim must health insurers send proof-of-loss forms?

Answer 13

Within 15 days

Question 14

If an insured has an own occupation plan, what is the maximum amount of time that benefits can be collected on his or her current job?
A. 2 years
B. 3 years
C. For the duration of the contract
D. 1 year

Answer 14

A. 2 years

Under an own occupation plan, if the insured cannot perform his or her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not he paid.

Question 15

Which of the following services and benefits would basic medical expense coverage NOT cover?
A. Hospital room and board
B. Mental illness treatment
C. Hospice care
D. Maternity benefits

Answer 15

A. Hospital room and board

Basic medical expense coverage offers a wide range of limited benefits that typically result in high out-of-pocket costs. Basic medical expense coverage can be used for emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care,
and nurses’ expenses.

Question 16

The annual Medicare open enrollment period is for:
A. Existing Medicare members who want to change their coverage.
B. Individuals eligible for Medicare Part B, but who waited to enroll because they had a group health plan through their employer.
C. New enrollees in Medicare.
D. Individuals who did not sign up for Medicare when first eligible.

Answer 16

A. Existing Medicare members who want to change their coverage.

Question 17

When is Medicare open enrollment?

Answer 17

From October 15 to December 7 each year

Question 18

An insured has a routine physical exam, blood work, and a follow-up appointment with a specialist. He receives a bill for each service provided. Which type of plan does the insured have?
A. Service based
B. Fee-for-service
C. Prepaid
D. Individual claims

Answer 18

B. Fee-for-service

Question 19

Eligible major medical plans have what extent of maximum limits?
A. Minimum, as required by law
B. Varies, depending upon the extent of insured eligibility
C. Average
D. High

Answer 19

D. High

Eligible major medical plans cover medical expenses both in and out of the hospital and have high maximum limits.

Question 20

Can an individual who belongs to a POS plan join an HMO?
A. Yes, but they must use the HMO physician first
B. No
C. Yes, and they may use any preferred physician, even if not part of the HMO
D. Yes, but they must use the POS physician first

Answer 20

C. Yes, and they may use any preferred physician, even if not part of the HMO

Question 21

How long after the date of issue may an insurer cancel an accident and health policy?
A. 30 days
B. Once a policy is issued, it cannot be cancelled unless the insurer finds a fraudulent misrepresentation in the application.
C. 90 days
D. 60 days

Answer 21

C. 90 days

Question 22

Which of the following entities are responsible for making premium payments in medical plans?
A. Payors
B. Insureds
C. Producers
D. Subscribers

Answer 22

D. Subscribers

Question 23

Which of the following is NOT the benefit of a POS plan?
A. It allows guaranteed acceptance of all applicants.
B. It allows the employee to use an HMO provided doctor.
C. It allows the employee to use a doctor not covered under the HMO.
D. The employees do not have to make a decision between the HMO or
PPO plans that lock them into one plan.

Answer 23

A. It allows guaranteed acceptance of all applicants.

Question 24

Most major medical plans cover medical expenses both in and out of the hospital and have high maximum limits. What is the term used to describe this?
A. Comprehensive
B. General
C. Preferred
D. Eligible

Answer 24

D. Eligible

Question 25

An insured reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this agreement? A. Coverage provisions B. Insuring clause C. Consideration clause D. Statement of loss coverage

Answer 25

B. Insuring clause The insuring clause lists the insured, insurance company, what kind of losses are covered, and how much the losses would be compensated.

Question 26

Under the uniform required provisions for accident and sickness policies, proof of loss should be filed within how many days of a loss? A. 90 days B. 60 days C. 20 days D. 30 days

Answer 26

A. 90 days

Question 27

Most insurers issue health insurance policies for delivery in many states. Because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state, the insurer attaches A. Conformity with state statutes optional provision. B. Miscellaneous optional provision. C. A waiver of other state requirements. D. Nothing. An insurer's policy only needs to conform to the regulations of the state where the insurer is domiciled.

Answer 27

A. Conformity with state statutes optional provision.

Question 28

An insured purchased a noncancellable health insurance policy one year ago. Under what circumstances could the insurance company cancel or void this policy? A. Within 2 years of the application, the insurer discovers a misrepresentation. B. The insured does not pay the premium. C. For any of these reasons. D. The insured reaches the maximum age limit specified in the policy.

Answer 28

C. For any of these reasons.

Question 29

What is the benefit of experience rating? A. It allows employers with high claims experience to obtain insurance. B. It allows employers with low claims experience to get lower premiums. C. It helps employers with high claims experience to get group coverage. D. It helps employees with low claims experience to become exempt from group premiums.

Answer 29

B. It allows employers with low claims experience to get lower premiums.

Question 30

An insured wants to cancel her health insurance policy. Which portion of her contract can she consult for her cancellation rights? A. Termination clause B. Insuring clause C. Renewability clause D. Terms of cancellation

Answer 30

C. Renewability clause

Question 31

Which of the following is an additional benefit covered in Medicare supplement Plans B through N? A. Foreign travel emergency benefit B. Medicare Part A deductible C. Skilled nursing facility coinsurance D. Medicare Part B deductible

Answer 31

B. Medicare Part A deductible Plans B through N must cover the core benefits plus Medicare Part A deductible.

Question 32

In a group policy, who is issued a certificate of insurance? A. The individuals covered under the insurance contract B. The employer C. The insurance company D. The health care provider

Answer 32

A. The individuals covered under the insurance contract

Question 33

An insured has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this? A. Limited coverage B. Single protection C. Unilateral protection D. Isolated coverage

Answer 33

A. Limited coverage

Question 34

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss? A. Notice of claim B. Claims initiation C. Consideration D. Loss notification

Answer 34

A. Notice of claim

Question 35

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What is the name of this provision? A. Unpaid premium B. Net premium C. Premium first D. Premium differential

Answer 35

A. Unpaid premium

Question 36

An insured has a disability income policy with an annual premium of $300 and a benefit amount of $300 per month. He was disabled and because of the policy's elimination period, he had no income at the time it was due. The policy contains the optional unpaid premium provision. Now that the elimination period has been satisfied, the insured's first disability payment will be A. $0. B. $300 plus the amount of premiums due. C. $600 because once the elimination period is satisfied, payments are retroactive. D. $300.

Answer 36

A. $0. The insurer would retain the first month's benefit to satisfy the past due premium.

Question 37

Which of the following Medicare plans may require members to have a primary care physician? A. Part D B. Part A C. Part C D. Part B

Answer 37

C. Part C

Question 38

The provision which prevents the insured from bringing a lawsuit against the company for at least 60 days after proof of loss is known as A. Time limit on certain defenses. B. Incontestability. C. Legal actions. D. Notice of claim.

Answer 38

C. Legal actions. This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.

Question 39

When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called A. Fraternal coverage. B. Overinsurance. C. Pro-rata coverage. D. Double indemnity coverage.

Answer 39

B. Overinsurance.

Question 40

An insured pays her major medical insurance annually on March 1 each year. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. Her insurance company would A. Pay the claim. B. Pay the claim, minus the amount of the premium. C. Hold the claim as pending until the end of the grace period. D. Deny the claim.

Answer 40

A. Pay the claim.

Question 41

What type of information is NOT included in a certificate of insurance? A. What is covered in the policy B. How long the coverage will last C. The cost the company is paying for monthly premiums D. How to file a claim

Answer 41

C. The cost the company is paying for monthly premiums The individuals covered under the insurance contract are issued certificates of insurance. The certificate states what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.

Question 42

If an individual bought a health insurance policy for herself, she would be considered A. An insured only. B. A producer. C. Both a subscriber and an insured. D. A subscriber only.

Answer 42

C. Both a subscriber and an insured. Subscribers are responsible for making premium payments, while insureds receive insurance benefits.

Question 43

An insurer is preparing to pay disability income benefits to an insured. In order to prevent overinsurance, the insurer monitors the income of the insured before submitting payment. Which rule corresponds to this behavior? A. Relation of earnings to insurance B. Overinsurance prevention C. Income tracking D. Income monitoring phase

Answer 43

A. Relation of earnings to insurance To prevent overinsurance

Question 44

All of the following are ways in which a major medical policy premium is determined EXCEPT A. The average age of the group. B. The amount of the deductible. C. The stop-loss amount. D. The coinsurance percentage.

Answer 44

A. The average age of the group. The average age is a factor in group health plans, not major medical plans

Question 45

Which of the following is true if a person decides to sign up for a Medicare supplement plan after the open enrollment period ends? A. They will be charged a lower premium. B. They will always be guaranteed coverage. C. They will be offered limited benefits. D. They may be denied coverage.

Answer 45

D. They may be denied coverage. After the open enrollment period ends, insurers may refuse coverage or charge higher premiums based on the applicant's health status.

Question 46

Which of the following is true of a PPO? A. Their goal is to channel patients to providers that discount services. B. Claim forms are completed by members on each claim. C. The most common type of PPO is the staff model. D. No copayment fees are involved.

Answer 46

A. Their goal is to channel patients to providers that discount services. Insureds are treated by providers who have agreed to discount their charges.

Question 47

Under which of the following organizations are the practicing providers compensated on a fee-for-service basis? A. Blue Cross/Blue Shield B. PPO C. Open panel D. HMO

Answer 47

B. PPO

Question 48

What is the difference between guaranteed renewable and noncancellable policies? A. A guaranteed renewable policy's premium rate may be changed by the insurer for an entire class of policyholders, and under the noncancellable policy, the rates cannot be changed. B. Under the noncancellable policy, the policy provisions can be changed by the insurer. C. There is no difference. D. A guaranteed renewable policy can be cancelled at any time by either party.

Answer 48

A. A guaranteed renewable policy's premium rate may be changed by the insurer for an entire class of policyholders, and under the noncancellable policy, the rates cannot be changed. Both coverage and rates are guaranteed in a noncancellable policy.

Question 49

A policy provision conflicts with state statutes. Which of the following will happen? A. The provision will be reviewed by the Federal Insurance Commission. B. The provision must be amended to conform to state statutes. C. The provision may or may not be altered to conform to the statutes. D. The insurer must submit a request to the state insurance department in order to approve the conflicting provision.

Answer 49

C. The provision may or may not be altered to conform to the statutes. If a policy provision conflicts with state statutes, it may or may not need to be altered to conform to the statutes. The conformity with state statutes provision states that any conflicting provisions must be changed. Although this is technically an optional provision, many states require its inclusion in insurance policies.

Question 50

Which of the following would NOT be covered under the basic hospital expense coverage? A. Nonsurgical services by a physician B. Lab charges C. X-ray charges D. Hospital room and board

Answer 50

A. Nonsurgical services by a physician Hospital expense policies cover hospital room and board, miscellaneous hospital expenses (such as lab and x-ray charges), medicines, use of operating room and supplies while the insured is confined in a hospital.

Question 51

Insurers are required to supply claims forms to the insured within how many days after notice of claim? A. 10 days B. 30 days C. 15 days D. 20 days

Answer 51

C. 15 days

Question 52

Regarding uniform mandatory provisions concerning claims, all of the following are true EXCEPT A. An insured must notify the insurer of a claim on forms prescribed by the insurer. B. If the insured is several days late in filing proof of loss form, the claim cannot be denied if the insured can show good cause. C. If the insured is two years late in filing a proof of loss, the claim can be denied. D. The insured is customarily required to give notice of claim within 20 days.

Answer 52

A. An insured must notify the insurer of a claim on forms prescribed by the insurer. If forms are not furnished, any written statement will satisfy the reporting requirement. In all cases, an insured must notify the insurer of a claim on forms prescribed by the insurer.

Question 53

What term is used to describe when a medical care giver contracts with a health organization to provide services to its members or subscribers, but retains the right to treat patients who are not members or subscribers? A. Restrictive rights B. Indemnity contract C. Open panel D. Closed panel

Answer 53

C. Open panel