FLORIDA 2-40 HEALTH LICENSE EXAM QUESTIONS WITH 100% CORRECT ANSWERS, Exams of Advanced Education

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FLORIDA 2-40 HEALTH LICENSE

EXAM QUESTIONS WITH 100%

CORRECT ANSWERS

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owners rights - CORRECT ANSWERS- if an individual health insurance policy provides a death benefit, the policyowner will be able to designate a beneficiary and, unless the beneficiary designation is irrevocable, to change the beneficiary. the power to change the beneficiary is provided in the change of beneficiary provision. the policyowner also has the right to make any other change without the consent of the beneficiaries. dependent children benefits - CORRECT ANSWERS- the group coverage may be extended to cover the insureds dependents. eligible dependents include the insureds children, spouse, dependent parents, and anyone else upon which dependency can be proven. every policy providing coverage for a dependent child until a specified age will not terminate that coverage if the child is dependent upon the insured and is incapable of self support because of physical or mental handicaps. proof of the dependency is required within 31 days of the child attaining the maximum age. upon request, proof of dependency is required annually after a 2 year period following attainment of maximum age modes of premium payment - CORRECT ANSWERS- higher frequency of payments = higher premium payments residual disability - CORRECT ANSWERS- is the type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is not able to work as long or at the same they worked before becoming disabled. many companies have replaced partial disability with residual disability. residual disability will help pay for loss of earnings. if the personcan only work part time or at a lesser paying position, residual disability will make up the difference between their present earning and what they were earning prior to becoming disabled managed care - CORRECT ANSWERS- any medical plan that attempts to contain costs by controlling the behavior of participants is considered a managed care program. a true managed care plan should have 5 basic characteristics

• controlled access of providers
• comprehensive case management

• preventive care
• risk sharing
• high quality care subrogation - CORRECT ANSWERS- the legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss. through subrogation the insured cannot collect twice nonduplication and coordination of benefits - CORRECT ANSWERS- the purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments and overinsurance when an individual is covered under multiple group health insurance plans. the provision limits the total amount of claims paid from all insurers covering the patient to no more than the total allowable medical expenses primary plan - CORRECT ANSWERS- the plan that is responsible for providing the full benefit amounts as it specifies. secondary or excess plan - CORRECT ANSWERS- once the primary plan has paid its full promised benefit, the insured submits the claim to the secondary provider for any additional benefits payable (including deductibles and coinsurance). in no case will the total amount the insured receives exceed the costs incurred or the total maximum benefits available under all plans. loss - CORRECT ANSWERS- amount covered by primary plan = amount covered by secondary plan occupational coverage - CORRECT ANSWERS- provides benefits for illness, injury or disability resulting from accidents that occur on or off the job nonoccupational coverage - CORRECT ANSWERS- only covers claims that result from accidents or sickness occurring off the job personally owned health insurance - CORRECT ANSWERS- premium payments on personally owned disability income policies are non deductible by the individual. however, desability income benefits are recieved income tax free by the individual. in either medical expense insurance policies or long term care insurance policies, premiums paid by the individual policyholder are deductible as a medical expense to the extent that when added to all other unreimbursed medical expenses, the total exceeds 7.5% of the taxpayers adjusted gross income. however, there is a limit on the amount of premium that can be

deducted depending on the age of the insured (taxpayer) at the end of the year. the IRS sets annual limits for that amount, and any premium above these limits will not be considered a medical expense, and therefore, cannot be tax deductible. the provision only applies if the insured itemizes these deductions on his/her tax return employer provided health insurance-premiums - CORRECT ANSWERS- paid by the employer for disability income insurance for its employees are deductible as a business expense and are not covered as taxable income to the employee. employer provided health insurance- benefits - CORRECT ANSWERS- received by an employee that are attributable to employer contributions are fully taxable to the employee as income when the employer and employee share in premium contributions, the employees contribution is not deductible; however, benefits received by the employee are attribuible to their portion of the contribution are not taxable as income. the taxation of income received by the employee would depend on the type of a group plan:

• noncontributory- meaning the employer pays the entire cost, so the income benefits are included in the employees gross income and taxed as ordinary income
• fully contributory- meaning that the employee pays the entire cost, so the income benefits are received income tax free by the employee
• partially contributory - meaning that the cost is paid partially by the employee and by the employer. in this case the portion paid by the employee is received income tax free and the portion paid by the employer is included in the employees gross income taxed as ordinary income
• for example, if an employee contributes 40% of the premium and receives a benefit of %1,000, only $600 (60% = employer contribution) of the benefit payment will be taxed to the employee as income, while $400 (40% = employee contribution) will be received tax free. employer provided health insurance- short term disability (STD) - CORRECT ANSWERS- group plans usually have a benefit period of less than 2 years. it is common in this type of disability income plans to place a maximum dollar amount on the benefit that will be provided regardless of earnings, and to have an elimination period (except for disability resulting from accidents) employer provided health insurance- long term disability (LTD) - CORRECT ANSWERS- group plans usually pay benefits for 2 years or longer

employer provided health insurance- sole proprietors and partners - CORRECT ANSWERS- may deduct 100% of the cost of a medical expense plan provided to them and their families because they are considered self employed individuals, not employees. the deduction may not exceed the taxpayers earned income for the year. employer provided health insurance- business overhead expense (BOE) - CORRECT ANSWERS- sold to small business owners to reimburse them for the overhead expenses such as rent, utilities, employee salaries employer provided health insurance- disability buy sell insurance - CORRECT ANSWERS- the policy provides funds for the business organization to purchase the business interest of a disabled partner tax considerations for health insurance- individual disability income - CORRECT ANSWERS- premiums not deductible benefits not taxable tax considerations for health insurance- group disability income - CORRECT ANSWERS- premiums deductible for employer benefits not taxable tax considerations for health insurance- individual medical - CORRECT ANSWERS- premiums not deductible* benefits not taxable tax considerations for health insurance- group medical - CORRECT ANSWERS- premiums deductible for employer benefits not taxable tax considerations for health insurance- individual long term care - CORRECT ANSWERS- premiums not deductible* benefits not taxable tax considerations for health insurance- group long term care - CORRECT ANSWERS- premiums deductible for employer benefits not taxable tax considerations for health insurance- individual medicare supplement - CORRECT ANSWERS- premiums not deductible* benefits not taxable tax considerations for health insurance- group medicare supplement - CORRECT ANSWERS- premiums deductible for employer benefits not taxable

tax considerations for health insurance- buy-sell - CORRECT ANSWERS- premiums not deductible benefits not taxable tax considerations for health insurance- key person - CORRECT ANSWERS- premiums not deductible benefits not taxable tax considerations for health insurance- BOE - CORRECT ANSWERS- premiums deductible for employer benefits taxable tax considerations for health insurance- NOTE* - CORRECT ANSWERS- unless combined premiums and unreimbursed medical expenses exceed 7.5% of adjusted gross income, and subject to the tax qualified limitations