Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must?
Be less extensive and premium cannot exceed 102%
Be the same and the premium cannot exceed
102%
Be more extensive and the premium cannot exceed 102%
Be the same as well as the premium
answer
Be the same and the premium cannot exceed
102%
question
The limited period of time given to all members to sign up for a group health plan is called the?
Enlistment period
Sign-up period
Probationary period
Enrollment period
answer
Enrollment period
question
Which of the following does Coordination of Benefits allow?
Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
Allows both a group health plan and individual health plan to coordinate their benefit payments
Allows the deductible to be spread out between all the health providers
Allows each health provider to pay 100% of the claim
answer
Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
question
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of?
Costs that exceed 7 Β½ % of AGI
Costs that exceed 10% of AGI
100% of costs
No deduction permitted
answer
100% of costs
question
Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage?
April 1
April 6
May 15
May 30
answer
May 30
question
A group disability income plan that pays tax-free benefits to covered employees is considered?
Non-contributory
Partially contributory
Group contributory
Fully contributory
answer
Fully contributory
question
What is issued to each employee of an employer health plan?
Provision
Receipt
Policy
Certificate
answer
Certificate
question
Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the
Employee's benefits still owed can be claimed
Employee cannot be excluded from the new employer's health plan
Employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan
New health insurance carrier will have a clear record of any chronic conditions that exist
answer
Employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan
question
Health insurance will typically cover which of the following perils?
Death due to illness
Injury due to accident
Death due to accident
Dismemberment
answer
Injury due to accident
question
A common exclusion with Vision plans is?
Eyeglass frames
The examination
Contact lenses
Lasik surgery
answer
Lasik surgery
question
Mark continues working after the age 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?
He's not eligible for Medicare
His group health plan and Medicare pay 50/50
Medicare is the secondary payer
Medicare is the primary payer
answer
Medicare is the secondary payer
question
What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?
In the event of employment termination, group health insurance can be kept if the employee pays the premiums
Receive a tax credit to help offset the cost of health insurance
Remain on their current coverage for 30 months
In the event of employment termination, group health insurance can be kept if the employer pays the premiums
answer
In the event of employment termination, group health insurance can be kept if the employee pays the premiums
question
Under which criteria may a group health plan exclude participation?
Member's claims history
Member's current age
Member's pre-existing condition
Member's part-time employment status
answer
Member's part-time employment status
question
HIPPA considers which of the following as "individually identifiable health information?"
A person's employment history
A person's net income
A person's hire date
A person's health claim information
answer
A person's health claim information
question
Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?
Partially taxable income
Non-taxable income
Taxable income
Conditionally taxable income
answer
Taxable income
question
Without a section 125 plan in place, what would happen to an employee's payroll contribution to an HSA?
It would be considered taxable income to the employee
The employee would not be allowed to an HSA
The employer would pay payroll tax and FICA on the contribution amount
The employer would not be allowed to deduct the contribution from the employee's pay
answer
It would be considered taxable income to the employee
question
Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?
Presumptive disability provision
Absolute accidental provision
Accidental death benefit provision
Accidental bodily injury provision
answer
Accidental bodily injury provision
question
If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?
$100
$250
$500
$1,000
answer
$500
question
Continued coverage under COBRA would be provided to a(n)?
Former dependent of employee no longer of dependent status
Terminated employee
Divorced spouse of employee
Employee reaching full retirement
answer
Terminated employee
question
The purpose of the Coordination of Benefits provision in group accident and health plan is to?
Avoid over payment of claims
Reduce out-of-pocket costs
Reduce adverse selection
Lower the cost of premiums
answer
Avoid over payment of claims
question
When can a group health policy renewal be denied according to the HIPAA?
When a change of management has occurred within the group
When the annual number of claims has increased by 25%
When contribution of participation rules have been violated
When group participation has increased by 25%
answer
When contribution or participation rules have been violated
question
What is the contract called that is issued to an employer for a Group Medical Insurance plan?
Master policy
Certificate of coverage
Provisional policy
Document of coverage
answer
Master policy
question
Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?
The amount contributed by the employer
The amount contributed by the owner
The underlying account investments used
The medical expenses paid for by the HSA
answer
The amount contributed by the employer
question
A master contract and certificate of coverage can be found in which type of policy?
Long-term
Medicaid
Group
Medicare
answer
Group
question
Credit Accident and Health plans are designed to?
Permit creditors the ability to require that coverage be purchased through insurers of their choice
Provide permanent protection
Help pay off existing loans during periods of disability
Not permit free choice of coverage selection
answer
Help pay off existing loans during periods of disability
question
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
Disability overhead policy
Business continuation policy
Disability buy-sell policy
Business overhead expense policy
answer
Business overhead expense policy
question
Which of the following would be considered a possible applicant and contract policyholder for group health benefits?
HR department
Employer
Insured employee
Insurance company
answer
Employer
question
The policyholder for a group health benefit plan is considered to be the?
Employee
Employer
Liaison
Insurer
answer
Employer
question
The election of COBRA for continuation of health coverage will?
Increase the coverage and lower premium
Maintain the same coverage and increase premium
Increase out-of-pocket costs and lower premium
Decrease out-of-pocket costs and maintain same premium
answer
Maintain the same coverage and increase premium
question
In an employer-sponsored group accident and health plan, a master contract is issued to the?
TPA
Employees
Administrative Services Organization
Employer
answer
Employer
question
Health insurance involves two perils, accident and ___________.
Death
Sickness
Disability
Liability
answer
Sickness
question
An employer is issued a group medical insurance policy. The single contract is known as a(n)?
Entire contract
Master Policy
Certificate of coverage
Employer contract
answer
Master policy
question
According to HIPAA, When an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance; the individual?
Is eligible for coverage upon hire
Must wait 360 days to be eligible for coverage
Must continue coverage with the previous employer
Is eligible for only health insurance, not life or dental insurance
answer
Is eligible for coverage upon hire
question
Which of the following is INELIGIBLE to participate in a Section 125 plan?
Key employee in a C-Corp
Highly compensated employee in an S-Corp
A C-Corp owner with a greater than 2% share
An S-Corp owner with a greater than 2% share
answer
An S-Corp owner with a greater than 2% share
question
In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed at the employee at?
Employee has no tax liability
40% of the benefit
60% of the benefit
100% of benefit
answer
60% of the benefit
question
Which of the following is typically NOT eligible for coverage in a group health policy?
Full-time employee
Temporary employee
Business owner
Partner in a partnership
answer
Temporary employee
question
According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied?
There have been too many claims in the previous year
The size of the group has increased by more than 10%
Participation of contribution rules have been violated
Participation or contribution rules have been changed
answer
Participation of contribution rules have been violated
question
Which of the following would evidence ownership in a participating health insurance contract?
Stock ownership
Irrevocable beneficiary status
Policy ownership
Collateral assignment
answer
Policy ownership
question
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called?
Contributoy
Indemnity
Estoppel
Subrogation
answer
Subrogation
question
Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a(n)?
Crossover
Conversion
Exchange
Extension of benefits
answer
Conversion
question
A person covered with an individual health plan?
Is issued a policy
Is issued a certificate of medical costs
Does not contract directly with the insurance company
Is not subject to medical underwriting
answer
Is issued a policy
question
Coordination of Benefits regulation applies to all of the following plans EXCEPT?
Group vision plan
Preferred provider organization plan
Self-funded group health plan
Group health plan
answer
Preferred provider organization plan
question
When are group disability benefits considered to be a tax-free to the insured?
When the recipient pays the premiums
When the employer pays the premiums
When both the employer and recipient pays the premiums
When benefits paid are equal to or lower than the recipient's salary
answer
When the recipient pays the premiums
question
Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his preexisting health condition applies, Ron cannot have more than a ______ day gap without previous health insurance.
45
63
75
90
answer
63
question
Under the subrogation clause, legal action can be taken by the insurer against the?
Responsible third party
Beneficiary
Policyowner
State
answer
Responsible third party
question
How many employees must an employer have for a terminated employee to be eligible for COBRA?
20
30
40
50
answer
20
question
Under which criteria may a group health plan exclude participation?
Member's claims history
Member's current age
Member's preexisting condition
Member's part-time employment status
answer
Member's part-time employment status
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