Health and Accident Insurance Chapter 12

Questions and Answers

Which policy covers business expenses when the owner is disabled?

Business overhead expense policy (correct)

Disability overhead policy

Business continuation policy

Disability buy-sell policy

Health insurance will typically cover which of the following perils? (Select one)

Death due to accident

Dismemberment

Death due to illness

Injury due to accident (correct)

The limited period of time given to all members to sign up for a group health plan is called the?

Sign-up period

Enlistment period

Probationary period

Enrollment period (correct)

When can a group health policy renewal be denied according to HIPAA? (Select one)

When contribution or participation rules have been violated Signup and view all the answers

What is issued to each employee of an employer health plan?

Certificate Signup and view all the answers

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers who employ at least:

20 employees Signup and view all the answers

An employer is issued a group medical insurance policy. This single contract is known as a(n):

Master policy Signup and view all the answers

A master contract and certificate of coverage can be found in which type of policy?

Group Signup and view all the answers

The election of COBRA for continuation of health coverage will:

Maintain the same coverage and increase premium Signup and view all the answers

An insurer has the right to recover payment made to the insured from the negligent party. These rights are called:

Subrogation Signup and view all the answers

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 Signup and view all the answers

According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied?

Participation or contribution rules have been violated Signup and view all the answers

A group Disability Income plan that pays tax-free benefits to covered employees is considered:

Fully contributory Signup and view all the answers

The purpose of the Coordination of Benefits provision in group accident and health plans is to:

Avoid overpayment of claims Signup and view all the answers

Continued coverage under COBRA would be provided to all of the following EXCEPT:

A covered employee is terminated for gross misconduct Signup and view all the answers

Buy-sell plans are typically funded by which two types of insurance?

Life insurance and disability insurance Signup and view all the answers

How many employees must an employer have for a terminated employee to be eligible for COBRA?

20 Signup and view all the answers

Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?

Medicare is the secondary payer Signup and view all the answers

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):

Conversion Signup and view all the answers

Which of the following is INELIGIBLE to participate in a Section 125 Plan?

An S-Corp Owner with a greater than 2% share Signup and view all the answers

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

Accidental bodily injury provision Signup and view all the answers

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 Signup and view all the answers

The policyholder for a group health benefit plan is considered to be the:

Employer Signup and view all the answers

In regards to a group health insurance plan, which statement is CORRECT?

A non-contributory group health plan must cover all eligible members Signup and view all the answers

Under the subrogation clause, legal action can be taken by the insurer against the:

Responsible third party Signup and view all the answers

The problem of overinsurance is addressed in which health insurance provision?

Coordination of benefits Signup and view all the answers

Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of:

100% of costs Signup and view all the answers

Key Person Disability Insurance pays benefits to the:

Employer Signup and view all the answers

Who is financially liable for the payment of covered claims in a fully insured group health plan?

Insurer Signup and view all the answers

A person covered with an individual health plan:

Is issued a policy Signup and view all the answers

Which of the following is typically NOT eligible for coverage in a group health policy?

Temporary employee Signup and view all the answers

When are group disability benefits considered to be tax-free to the insured?

When the recipient pays the premiums Signup and view all the answers

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

The amount contributed by the employer Signup and view all the answers

Coordination of Benefits regulation applies to all of the following plans EXCEPT:

Preferred Provider Organization plan Signup and view all the answers

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance.

63 Signup and view all the answers

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 to the employee at:

60% of the benefit Signup and view all the answers

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must:

Be the same and the premium cannot exceed 102% Signup and view all the answers

A common exclusion with Vision plans is:

Lasik surgery Signup and view all the answers

Credit Accident and Health plans are designed to:

Help pay off existing loans during periods of disability Signup and view all the answers

Group health plans may deny participation based upon the:

Member's part-time employment status Signup and view all the answers

Which of the following would be considered a possible applicant and contract policyholder for group health benefits?

Employer Signup and view all the answers

During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have major health issues. How would the insurer handle this?

Accept or reject the whole group Signup and view all the answers

Business Overhead Expense Insurance pays for:

Business expenses when a business owner becomes disabled Signup and view all the answers

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 waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan Signup and view all the answers

Under group health insurance, a certificate of coverage is issued to the:

Employee Signup and view all the answers

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 Signup and view all the answers

HIPAA considers which of the following as 'individually identifiable health information'?

A person's health claim information Signup and view all the answers

An eligible individual who would like to obtain group health insurance without providing evidence of insurability must:

Enroll within a specified eligibility period Signup and view all the answers

When a claimant has coverage under more than one health plan, which group medical plan provision applies?

Coordination of benefits Signup and view all the answers

Health insurance involves two perils, accident and ____.

Sickness Signup and view all the answers

What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect?

100% Signup and view all the answers

In an employer-sponsored group accident and health plan, a master contract is issued to the:

Employer Signup and view all the answers

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 Signup and view all the answers

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?

$500 Signup and view all the answers

Minimum participation standards exist for group health insurance plans in order to:

Prevent adverse selection Signup and view all the answers

Which of the following would evidence ownership in a participating health insurance contract?

Policy ownership Signup and view all the answers

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

Taxable income Signup and view all the answers

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?

May 30 Signup and view all the answers

What is the contract called that is issued to an employer for a Group Medical Insurance plan?

Master policy Signup and view all the answers

Which of the following is NOT typically covered under vision care insurance?

Eye surgery Signup and view all the answers

Coverage is limited for vision and dental insurance in all of the following ways, EXCEPT:

Specific dollar amount for examinations Signup and view all the answers

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

Business Overhead Expense Insurance Signup and view all the answers

Study Notes

Certificates and Policies

Each employee under a group health plan receives a certificate confirming their coverage.
Employers must have at least 20 employees for COBRA (Consolidated Omnibus Budget Reconciliation Act) provisions to apply.
A master policy is a single contract issued to the employer for group medical insurance.

Group Insurance Characteristics

Group policies, such as health plans, include both a master contract for the employer and a certificate of coverage for employees.
COBRA allows employees to maintain their health coverage after leaving a job, but premiums may increase.
Subrogation rights allow insurers to recover costs from a negligent third party after they have paid out claims.

Tax Implications and Coverage Participation

Without a Section 125 Plan, payroll contributions to a Health Savings Account (HSA) are taxable income for employees.
Under HIPAA, group health policy renewal can be denied if participation or contribution rules have been violated.
A fully contributory group disability income plan offers tax-free benefits when the employee pays the premiums.

Impact of Coverage and Claims

Coordination of Benefits prevents overpayment of claims across multiple insurance plans.
COBRA coverage is extended to former employees, divorced spouses, but not to employees terminated for gross misconduct.
Key Person Disability Insurance provides benefits directly to the employer in the event of an insured key person's disability.

Eligibility and Enrollment

To qualify for a non-contributory group health plan, 100% of eligible employees must participate.
Temporary employees are generally ineligible for group health insurance plans.
Members cannot have more than a 63-day gap in insurance to be eligible for new group coverage under HIPAA.

Different Insurances and Provisions

Business Overhead Expense Insurance pays business expenses if the owner becomes disabled.
Vision care insurance often excludes lasik surgery, but covers exams and certain types of corrective lenses.
An employee is the policyholder for their individual health plan, which issues a policy directly to them.

Miscellaneous

Health Savings Accounts (HSAs) allow account owners to control their contributions, but not the amounts contributed by employers.
Coordination of Benefits applies to plans like group health and not typically to Preferred Provider Organization (PPO) plans.
Creditable Coverage under HIPAA helps reduce waiting periods for pre-existing condition coverage in new group plans.

Insurance Policies and Ownership

Evidence of ownership in participating health insurance is established through policy ownership.
In Group Disability Income plans, benefits are taxed when the employer contributes towards the premiums.
Enrollment periods specify the limited time for all members to sign up for a group health plan.

Regulations and Compliance

Minimum participation standards exist in group health plans to prevent adverse selection.
The Insurer carries the financial liability for covered claims in fully insured group health plans.
Claims made under coordination of benefits ensure that no more than 100% of the claim is paid across all plans involved.

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Test your knowledge on Chapter 12 of Health and Accident Insurance with these flashcards. This quiz covers important topics such as health plan certificates and the COBRA act for employers. Perfect for students looking to solidify their understanding of insurance concepts.

Health and Accident Insurance Chapter 12

Questions and Answers

Which policy covers business expenses when the owner is disabled?

Health insurance will typically cover which of the following perils? (Select one)

The limited period of time given to all members to sign up for a group health plan is called the?

When can a group health policy renewal be denied according to HIPAA? (Select one)

What is issued to each employee of an employer health plan?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers who employ at least:

An employer is issued a group medical insurance policy. This single contract is known as a(n):

A master contract and certificate of coverage can be found in which type of policy?

The election of COBRA for continuation of health coverage will:

An insurer has the right to recover payment made to the insured from the negligent party. These rights are called:

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?

According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied?

A group Disability Income plan that pays tax-free benefits to covered employees is considered:

The purpose of the Coordination of Benefits provision in group accident and health plans is to:

Continued coverage under COBRA would be provided to all of the following EXCEPT:

Buy-sell plans are typically funded by which two types of insurance?

How many employees must an employer have for a terminated employee to be eligible for COBRA?

Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?

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):

Which of the following is INELIGIBLE to participate in a Section 125 Plan?

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?

The policyholder for a group health benefit plan is considered to be the:

In regards to a group health insurance plan, which statement is CORRECT?

Under the subrogation clause, legal action can be taken by the insurer against the:

The problem of overinsurance is addressed in which health insurance provision?

Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of:

Key Person Disability Insurance pays benefits to the:

Who is financially liable for the payment of covered claims in a fully insured group health plan?

A person covered with an individual health plan:

Which of the following is typically NOT eligible for coverage in a group health policy?

When are group disability benefits considered to be tax-free to the insured?

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

Coordination of Benefits regulation applies to all of the following plans EXCEPT:

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance.

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 to the employee at:

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must:

A common exclusion with Vision plans is:

Credit Accident and Health plans are designed to:

Group health plans may deny participation based upon the:

Which of the following would be considered a possible applicant and contract policyholder for group health benefits?

During the underwriting process for a group health policy, it was discovered that 15 out of 50 members of the group have major health issues. How would the insurer handle this?

Business Overhead Expense Insurance pays for:

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new group health plan will verify Creditable Coverage so that the:

Under group health insurance, a certificate of coverage is issued to the:

Which of the following does Coordination of Benefits allow?

HIPAA considers which of the following as 'individually identifiable health information'?

An eligible individual who would like to obtain group health insurance without providing evidence of insurability must:

When a claimant has coverage under more than one health plan, which group medical plan provision applies?

Health insurance involves two perils, accident and ____.

What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect?

In an employer-sponsored group accident and health plan, a master contract is issued to the:

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:

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?

Minimum participation standards exist for group health insurance plans in order to:

Which of the following would evidence ownership in a participating health insurance contract?

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

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?

What is the contract called that is issued to an employer for a Group Medical Insurance plan?

Which of the following is NOT typically covered under vision care insurance?

Coverage is limited for vision and dental insurance in all of the following ways, EXCEPT:

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

Study Notes

Certificates and Policies

Group Insurance Characteristics

Tax Implications and Coverage Participation

Impact of Coverage and Claims

Eligibility and Enrollment

Different Insurances and Provisions

Miscellaneous

Insurance Policies and Ownership

Regulations and Compliance

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