Chapter 4 - Health and Accident Insurance 48 Examinable Questions and 100% correct Answers

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Chapter 4 - Health and Accident Insurance 48 Examinable Questions and 100% correct 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? - $100 - $250 - $500 - $1,000 Answers: $500 Which of the following would evidence ownership in a participating health insurance contract? - Stock ownership - Irrevocable beneficiary status - Policy ownership - Collateral assignment Answers: Policy ownership 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? - 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 Answers: Medicare is the secondary payer Which of the following would be considered a possible applicant and contract policyholder for group health benefits? - Human resource department - Employer - Insured employee - Insurance company Answers: Employer What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do? - In the event of the 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 Answers: In the event of the employment termination, group health insurance can be kept if the employee pays the premiums Key Person Disability Insurance pays benefits to the - Hospital - Employee - Employer - Employee's creditors Answers: Employer When are group disability benefits considered to be tax-free to the insured? - When the recipient pays the premiums - When the employer pays the premiums - When both the employer and recipients pay the premiums - When benefits paid are equal to or lower than the recipient's salary Answers: When the recipient pays the premiums Justin 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 Answers: Taxable income 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 - Employee has no tax liability - 40% of the benefit - 60% of the benefit - 100% of the benefit Answers: 60% of the benefit Continued coverage under COBRA would be provided to all of the following EXCEPT: - Former dependent of employee no longer dependent status - Terminated employee - Divorced spouse of employee - A covered employee is terminated for gross misconduct Answers: A covered employee is terminated for gross misconductSusan 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 Answers: Conversion Under the subrogation clause, legal action can be taken by the insurer against the - Responsible third party - Beneficiary - Policyowner - State Answers: Responsible third party 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 Answers: An S-Corp Owner with a greater than 2% share 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 more than 10% - Participation or contribution rules have been violated - Participation or contribution rules been changed Answers: Participation or contribution rules have been violated An insurer has the right to recover payment made to the insured from the negligent party. These rights are called - Contributory - Indemnity - Estoppel - Subrogation Answers: Subrogation A master contract and certificate of coverage can be found in which type of policy? - Long-term - Medicaid - Group- Medicare Answers: Group 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 Answers: Maintain the same coverage and increase premium 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 premium Answers: Be the same and the premium cannot exceed 102% 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 Answers: Master policy Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of - Costs that exceed 7 ½% of AGI - Costs that exceed 10% of AGI - 100% of costs - no deduction permitted Answers: 100% of costs 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 Answers: Business overhead expense policy 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 Answers: It would be considered taxable income to the employee Health insurance involves two perils, accident and ___. - Death - Sickness - Disability - Liability Answers: Sickness How many employees must an employer have for a terminated employee to be eligible for COBRA? - 20 - 30 - 40 - 50 Answers: 20 What is issued to each employee of an employer health plan? - Provision - Receipt - Policy - Certificate Answers: Certificate When are group disability benefits considered to be tax-free to the insured? - When the recipient pays the premiums - When the employer pays the premiums - When both the employer and recipient pay the premiums - When benefits paid are equal to or lower than the recipient's salary Answers: When the recipient pays the premiums 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 Answers: Accidental bodily injury provision 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 Answers: is eligible for only health insurance, not life or dental insurance 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 Answers: employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan 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 Answers: Temporary employee A group Disability Income plan that pays tax-free benefits to covered employees is considered - Non-contributory - Partially contributory - Group contributory - Fully contributory Answers: Fully contributory HIPAA 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 Answers: A person's health claim information An employer is issued a group medical insuran [Show More]

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