Florida Health Insurance Questions And Correct Answers Verified Latest 2024-2025 Guarante, Exams of Nursing

Download Florida Health Insurance Questions And Correct Answers Verified Latest 2024-2025 Guarante and more Exams Nursing in PDF only on Docsity! Florida Health Insurance Questions And Correct Answers Verified Latest 2024-2025 Guaranteed Pass Grade A + UPDATED!! Which of the following is NOT a form of medical insurance? -Business overhead expense -Surgical expense -Hospital expense -Long term care - ANSWER>>Business overhead expense (Explanation: Business Overhead Expense insurance is designed to reimburse a business for overhead expenses in the event a business owner becomes disabled. Expenses such as rent, utilities, telephone, equipment, employees' salaries, etc.) All of the following are state or federal government programs that provide health insurance, EXCEPT? -Medicare -OASDI disability -Medicaid -Medigap - ANSWER>>Medigap (Explanation:A Medigap policy is a Medicare supplement insurance policy sold by private insurance companies to fill "gaps" in Medicare Parts A and B.) What type of health insurance is available to assist low-income individuals? -Social Security disability -Medicare supplement -Medicare -Medicaid - ANSWER>>Medicaid What types of reserves are set aside and held by health insurance companies? -Premium reserves -Premium and Claims reserves -Claims reserves -Deductible and Premium reserves - ANSWER>>Premium and Claims reserves (Explanation:Reserves are set aside for the payment of future claims.) Group health insurance is generally written on a basis that provides for dividends or experience rating. What is the basis called? -Contributory -Noncontributory -Coverage ends after 18 months - ANSWER>>Coverage ends after 18 months All of the following are correct regarding Florida regulation of HMOs, EXCEPT? -Must obtain a Certificate of Authority -Must file a report of its activities within 3 months of the end of each fiscal year -Must deposit $100,000 with the Rehabilitation Administration Expense Fund -Must be sold by agents licensed and appointed as health insurance agents - ANSWER>>Must deposit $100,000 with the Rehabilitation Administration Expense Fund (Explanation: They must deposit $10,000 with the Rehabilitation Administration Expense Fund.) What is "capitation" as it relates to an HMO? -Amount to be collected by the HMO from participating health care providers -Fixed amount paid by an HMO during a policy period -Fixed amount paid by an HMO to a physician for medical services -Amount required to be deposited with the State of Florida - ANSWER>>Fixed amount paid by an HMO to a physician for medical services When a person is covered by an HMO, the contract certificate or member's handbook must be delivered within how many days after approval of the enrollment by the HMO? -20 days -10 days -5 days -14 days - ANSWER>>10 days Which of the following statements about health service organizations is true? -They reimburse Policyowners directly for physicians' fees -They provide loss of income benefits to Policyowners -They reimburse Policyowners directly for all medical expenses -They provide benefit payments directly to the hospitals and physicians providing services - ANSWER>>They provide benefit payments directly to the hospitals and physicians providing services What is the period of time for an HMO "open enrollment"? -45 days during every 18-month period -30 days during every 12-month period -30 days during every 18-month period -45 days during every 12-month period - ANSWER>>30 days during every 18-month period If an HMO is found guilty of unfair trade practices, what is the maximum penalty that can be charged? -Up to $50,000 -Up to $150,000 -Up to $200,00 -Up to $100,000 - ANSWER>>Up to $200,00 Which of the following statements about Worker's Compensation laws is INCORRECT? -Employers can purchase coverage through the state program, private insurers or can self-insure -Worker's compensation provides benefits for work-related injuries, illness or death -Not all states have a workers compensation law Grouping small businesses together to obtain health insurance as one large group is a characteristic of what type of group? -Multiple Employer Trust (MET) -Franchise Health plan -Health Maintenance Organization (HMO) -Blue Cross/Blue Shield - ANSWER>>Multiple Employer Trust (MET) Casey has a medical expense policy that provides a fixed rate of $150 per day for hospitalization. Casey is hospitalized for 10 days and incurred covered medical expenses of $20,000. What will her medical expense policy pay? -$1,500 -$20,000 -$15,000 -$3,000 - ANSWER>>$1,500 (Explanation: Casey's policy will only cover a fixed rate per day for hospitalization of $150. If she is hospitalized for 10 days, then her policy will pay $1,500 ($150 x 10) of the total $20,000 in expenses.) Jamie has a reimbursement type medical expense policy with a maximum benefit of $500,000. She is hospitalized and incurs $25,000 in covered medical expenses. What will her policy provide in coverage? -$20,000 -$25,000 -$10,000 -$12,500 - ANSWER>>$25,000 (Explanation: A reimbursement type policy will provide coverage for expenses incurred. In this case that would be the total $25,000.) Which of the following will not be covered under "Miscellaneous Expenses" of a hospital expense policy? -Drugs -Lab fees -Daily room and board -Use of operating room - ANSWER>>Daily room and board There are three different approaches used by insurers in providing basic surgical expense coverage and determining the benefits payable. Which of the following is NOT one of these approaches? -Reasonable and customary approach -Physician schedule approach -Relative value scale approach -Surgical schedule approach - ANSWER>>Physician schedule approach Charlie has a hospital expense policy and a surgical expense policy. The hospital pays $100 a day for room and board and a maximum of $1,000 Which of the following statements is TRUE about basic hospital, medical and surgical expense policies? -The benefits provided are usually equal to the actual expenses incurred -They contain high deductibles -They usually have a stated limit for specific expenses -Benefits are provided for loss of income - ANSWER>>They usually have a stated limit for specific expenses Which of the following types of insurance policies combines several types of benefits and provides more coverage than any of the others? -Hospital expense -Comprehensive major medical -Hospital indemnity -Surgical expense - ANSWER>>Comprehensive major medical (Explanation: Comprehensive major medical plans cover virtually all medical expenses in a single policy. Such as hospital, physician and surgeon, nursing care, drugs, physical therapy, x-rays, medical supplies, etc.) Wanda has a Major Medical policy with a flat deductible of $250, coinsurance of 80%/20% and a stop-loss of $5,000. She has a covered claim for $5,500. What will Wanda pay? -$1,100 -$250 -$1,300 -$4,450 - ANSWER>>$1,300 (Wanda will pay the first $250 (her deductible) and then 20% of the remainder ($5,250, remainder amount, x .20 = $1,050. So Wanda will pay a total amount of $1,300 ($250 deductible, plus 20% of 5,250).) Travis has a Major Medical policy with a flat deductible of $500 and coinsurance of 80%/20% on the next $5,000 in covered expenses with 100% coverage for any remaining covered expenses. On an claim of $10,000, what amount will Travis pay? -$2,500 -$1,500 -$2,000 -$1,000 - ANSWER>>$1,500 (Explanation: Travis will pay the first $500 (deductible) and then 20% of the next $5,000 ($5,000 x .20 = $1,000. So Travis will pay a total of $1,500 (deductible plus 20% of $5,000).) When comparing a major medical policy having an 80%/20% coinsurance provision with one having a 75%/25% coinsurance provision, the insured will pay more or less premium for the 80%/20% provision? -Less premium -The same premium -Significantly less premium -More premium - ANSWER>>More premium (Explanation: Because the insured will be responsible for less of the cost for medical expenses (20% verses 25%), he will pay more in premium costs.) Jason has a Major Medical policy with a flat deductible of $500, coinsurance of 80%/20% and a stop-loss of $5,000. If he has a covered claim of $5,500, what will the insurance company pay? -$0 -$4,400 -$1,500 -$4,000 - ANSWER>>$4,000 (Explanation: Limited risk - ANSWER>>Limited risk (Explanation: Limited risk or dread disease policies are designed specifically to cover the high costs associated with a specific illness.) William was involved in a 2-car accident in which he is disabled and his passenger and the driver of the other car are injured. Which of the following would most likely be covered by William's disability income policy? -Disability of the other driver -His lost income -William's medical expenses -Dismemberment of the passenger's leg - ANSWER>>His lost income Cathy is a dentist and decides to purchase insurance that would cover a large portion of her income should she become disabled. What type of coverage will she purchase? -Disability income insurance -Business overhead expense insurance -Medical expense insurance -Lump sum disability - ANSWER>>Disability income insurance - All of the following are true regarding a disability income policy defining total disability as "own occupation", EXCEPT? -Insured is unable to work at their own occupation as a result of an accident or sickness -Difficult to qualify for -More advantageous to the insurer -More expensive than a policy providing "any occupation" - ANSWER>>More advantageous to the insurer Which of the following terms relates to payments made for partial disabilities? -Residual amount -Gross amount -Net amount -Recurrent amount - ANSWER>>Residual amount (Explanation: The amount of benefit payable when a policy covers partial disabilities depends on whether the policy stipulates a flat amount or a residual amount) Daniel's disability income policy defines total disability as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience". This definition is known as? Own occupation and is less restrictive than other definitions -Any occupation and is more restrictive than other definitions -Any occupation and is less restrictive than other definitions -Own occupation and is more restrictive than other definitions - ANSWER>>Any occupation and is more restrictive than other definitions Which of the following is NOT correct about partial disability? -Benefit period is usually 3 to 6 months -Flat amount benefit is usually 50% of the total disability benefit -Proof of disability is not required for partial disabilities -Follows period of total disability - ANSWER>>Proof of disability is not required for partial disabilities For individual disability income policies there are basically two types of benefit periods, which are? -Short-term and long-term -Short term and interim term -Basic term and broad term -Full term and partial term - ANSWER>>Short-term and long-term - What form of insurance is the primary form of pure accident coverage? -Major Medical -Disability Income -Medical Expense -Accidental Death and Dismemberment - ANSWER>>Accidental Death and Dismemberment George was in an accident. His Accident, Death and Dismemberment policy will cover all of the following, EXCEPT? -Loss of sight -Loss of use of a limb -Broken arm -Death - ANSWER>>Broken arm (Explanation: AD&D is the primary form of pure accident coverage. It provides a stated lump-sum benefit in the event of accidental death or in the event of loss of bodily members due to an accidental injury.) What does the principal sum represent in an AD&D policy? -Amount payable for accidental loss of sight -Amount payable as a death benefit -Amount payable for dismemberment -Amount payable for accidental loss of sight or dismemberment - ANSWER>>Amount payable as a death benefit An individual accidental death and dismemberment policy (AD&D) will pay benefits if an insured dies from... -Heart attack -Catastrophic illness -Head injury resulting from an auto accident -Occupational disease - ANSWER>>Head injury resulting from an auto accident Michael has an AD&D policy. Which of the following statements is CORRECT? -The benefit for the loss of both eyes is 75% of the principal sum - Michael's beneficiary will receive the capital sum of $100,000 as a death benefit -Principal sum is the amount paid for the accidental loss of sight or dismemberment -The benefit amount for the loss of one foot or one hand is 50% of the principal sum - ANSWER>>The benefit amount for the loss of one foot or one hand is 50% of the principal sum Which of the following is an example of a limited risk policy? -Surgical policy -Must cover all expenses not covered by Part A from the 61st to the 90th day -Must supplement both Part A and Part B of Medicare - ANSWER>>Must cover pre-existing conditions from the date the policy goes into effect Which of the following is NOT a requirement for an agent soliciting Medicare supplements? -Explain to prospect where there will be overlapping coverage -Send a signed form to the company explaining why coverage could not be placed -Inquire from each prospect if they already have coverage -Have prospect sign a form acknowledging information has been provided - ANSWER>>Send a signed form to the company explaining why coverage could not be placed Which of the following is NOT a category level of long-term care? -Custodial care -Intermediate nursing care -Hospitalization care -Skilled nursing care - ANSWER>>Hospitalization care Long-term care insurance also provides for a short rest period for a family caregiver. What is the known as? -Home care -Custodial care -Continuing care - Respite care - ANSWER>>Respite care What type of care, in a long-term care policy, is described as providing assistance in meeting daily living requirements, such as bathing, dressing, getting out of bed or toileting? -Custodial care -Respite care -Intermediate nursing care -Skilled nursing care - ANSWER>>Custodial care Which of the following conditions would NOT typically be covered by a Long Term Care policy? -Dementia -Drug dependency -Diabetes -Alzheimer's disease - ANSWER>>Drug dependency Florida requires a minimum participation of how many people for a group policy to be issued? -25 persons - To qualify for group health coverage, a group of persons must be considered a "natural group". What is meant by "natural group"? -Group must be made up of people in good health -Group must have been formed for some reason other than to obtain insurance Group must be consist of natural born citizens Group must have ten (10) or more members - ANSWER>>Group must have been formed for some reason other than to obtain insurance All of the following are correct regarding group health insurance, EXCEPT? -Major medical coverage may be written on a group basis -Employees receive separate policies -Debtor groups are eligible for group plans -Employer is issued a master policy - ANSWER>>Employees receive separate policies Which of the following is CORRECT regarding group health insurance? -Insurer must ask health questions of each individual in the group -Labor unions are not eligible -A group may be eligible that is formed just for the purpose of purchasing insurance -Lodges are eligible - ANSWER>>Lodges are eligible Florida requires what percentage of participation by employees in a contributory group health plan? - - -100% -50% -No minimum percentage -75% - ANSWER>>No minimum percentage (Explanation: Most noncontributory group health plans require 100% participation by eligible members, whereas contributory group health plans often require participation by 75% of eligible members. Under Florida law there is no specific minimum percentage participation for employees covered by group health insurance.) Which of the following is CORRECT about a group health insurance plan? -Non-contributory plans are paid for by the employer and employee -Non-contributory plans require 100% participation -Contributory plans are paid for by the employer only -Contributory plans require 100% participation - ANSWER>>Noncontributory plans require 100% participation - - Establishes which health plan is primary Found in group and individual health plans -Limits total amount of claims paid from all involved insurers -Purpose is to avoid duplication of benefits and overinsurance - ANSWER>>Found in group and individual health plans What is the purpose of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)? -Allow terminated employees to continue their group medical expense coverage for up to 18 months -Gives terminated employees 31 days to convert their medical expense coverage to another plan -Allows terminated employees to keep their group medical coverage at the same premium rates -Automatically convert terminated employee's group medical expense coverage into an individual policy - ANSWER>>Allow terminated employees to continue their group medical expense coverage for up to 18 months - - After COBRA continuation of benefits has expired, how long does the terminated employee have to convert their group certificate to an individual policy? 90 days 31 days -45 days -180 days - ANSWER>>31 days Jake purchased group "credit disability" insurance to cover a loan. He was injured and disabled for 7 months. What benefits were paid under this policy? -Insured's loan is paid off at the beginning of his disability -Creditor receives monthly payments equal to the monthly loan payments -Creditor receives monthly payments equal to the loan amount less loan interest charges -Insured receives monthly disability income payments - ANSWER>>Creditor receives monthly payments equal to the monthly loan payments Generally what type of health insurance policies offer dental and vision care benefits? -Individual -Franchise -Blanket -Group - ANSWER>>Group COBRA is a federal law that provides for an extension of health benefits for what length of time after employment is terminated? -24 months -6 months -12 months -18 months - ANSWER>>18 months Which of the following is CORRECT about "franchise" health plans? -It doesn't matter if the plan is contributory or noncontributory -It can only be sold to a franchise -Plans are guaranteed issue -Individual policies are issued to individual members - ANSWER>>Individual policies are issued to individual members - -7.5% 5.5% - ANSWER>>7.5% Which of the following would NOT be considered important when choosing the proper health insurance program? -Will I be able to deduct the premium payments from my taxes? -Is coverage available from a group plan or social insurance program? -Is the coverage for a family, individual, or business? -What are the deductibles and coinsurance? - ANSWER>>Will I be able to deduct the premium payments from my taxes? Cafeteria plans are also known as? -Section 125 plans -Flexible plans -Menu plans -Section 1040 plans - ANSWER>>Section 125 plans Which of the following is a TRUE statement regarding premiums and benefits for business overhead insurance? -Both premiums and benefits are tax-deductible -Both premiums and benefits are taxable -Premiums-tax-deductible, Benefits-taxable -Premiums-taxable, Benefits-tax-deductible - ANSWER>>Premiums- taxdeductible, Benefits-taxable All of the following are examples of how disability insurance is used for business continuation, EXCEPT? -Business overhead expense -Key person disability -Employee disability -Disability buy-out - ANSWER>>Employee disability Why were Cafeteria Plans designed? -Provide insurer greater control over benefits selected for employees - Allow employees to pick and choose from a menu of benefits to tailor their own benefit package -Allow employers to pick and choose benefits from a menu that best suits their company needs -Provide diversity of insurance company and HMO - ANSWER>>Allow employees to pick and choose from a menu of benefits to tailor their own benefit package Which of the following will NOT be covered under Business Overhead Expense Insurance? -Leased equipment Mortgage payments Page4. 7  - -Take out a policy loan Increase the amount of insurance Surrender the policy for its cash value - ANSWER>>Increase the amount of insurance Group health insurance is generally written on a basis that provides for dividends or experience rating. What is the basis called? -Participating -Contributory -Noncontributory -Nonparticipating - ANSWER>>Participating (Explanation: Group plans written by mutual companies provide for dividends while stock companies frequently issue experience-rated plans.) Workers Compensation will not provide which of the following benefits? -Rehabilitation to return the person to work -Unemployment insurance -Replacement of wages due to disability -Payment for medical expenses - ANSWER>>Unemployment insurance - Which of the following is NOT one of the three most important factors in underwriting a health insurance policy? -Parents' medical history - -Occupation -Physical condition -Moral hazards - ANSWER>>Parents' medical history When an application for health insurance is submitted without an initial premium, the earliest effective date is the date on which the? -Policy is received by the agent -Policy is delivered to the client by the agent and the premium is collected -Application is taken by the agent -Insurance company issues the policy - ANSWER>>Policy is delivered to the client by the agent and the premium is collected All of the following are additional risk factors used in underwriting a health insurance policy, EXCEPT? -Avocations -Policy premiums of other health insurance -Age -Family history - ANSWER>>Policy premiums of other health insurance All of the following are classifications of applicants for health insurance, EXCEPT? -Standard risk -Preferred risk -Special risk Substandard risk - ANSWER>>Special risk (Explanation: The classifications of applicants for health insurance are: preferred risk, standard risk, substandard risk and uninsurable risk.) When an insured holds more than one occupation, and occupation is used to classify the risk, what occupation will the insurer generally use to classify the insured? -Occupation that would produce the lowest premium -Occupation where insured spends the majority of hours -Occupation insured has been employed the longest -Occupation that is most hazardous - ANSWER>>Occupation that is most hazardous Which of the following is NOT a factor affecting health insurance premiums? - -Marital status -Sex -Age -Hobbies - ANSWER>>Marital status With all other factors being equal, who of the following would have the highest premiums for a health insurance policy? -25 year old female -45 year old male -25 year old male -45 year old female - ANSWER>>45 year old female (Explanation: Health insurance costs tend to increase as the age of the insured increases. The older the insured, the higher the applicable premium rate. Disabilities among women under the age of 55, on the average, have a greater frequency and longer duration than among men, so female premium rates for certain coverages are higher than premium rates for males.) Both life and health insurance use all of the following factors in determine premiums, EXCEPT? -Interest factor -Expense factor -Morbidity -Age - ANSWER>>Morbidity An insurer authorized to do business within this state is considered what type of insurer? A) Foreign B) Domestic If you are found guilty of any crime punishable by imprisonment one year or more, you must report it to the Insurance Department within how many days? A) 15 B) 20 C) 30 D) 60 - ANSWER>>30 (If you are declared guilty of any crime that is punishable by imprisonment for 1 year or more, you must report it to the Insurance Department within 30 days, even if you pleaded 'no contest' or it occurred outside of Florida or even the U.S.) An insurance license may NOT be suspended for which of the following? A) Cheating on the license exam B) Twisting C) Over-insuring a health insurance risk D) Violating the code of ethics - ANSWER>>Over-insuring a health insurance risk (An agent's license will not be suspended for over-insuring a health insurance risk unless the agent willfully over-insured it.) Which of the following is NOT true about a fiduciary? A) A fiduciary holds a position of special trust and confidence B) Giving an agent a premium payment is the same as giving it to the insurer C) If an agent is holding a premium payment for less than 3 days, it can be put in his personal account D) A fiduciary responsibility is to offer advice about financial security - ANSWER>>If an agent is holding a premium payment for less than 3 days, it can be put in his personal account (An agent or agency must keep funds belonging to each insurer in a separate account so it can be properly audited. An agent must never commingle the insurer's premium with personal funds, or otherwise use it for personal purposes.) An agent may write insurance under which of the following circumstances? A) Agent's company rejected the insurance so the agent submitted it to another company B) An agent may not broker rejected business to another company C) An agent may share commissions with another agent who is licensed, but not appointed with the insurer D) An agent may not be paid a fee for making a recommendation regarding group health insurance - ANSWER>>Agent's company rejected the insurance so the agent submitted it to another company (An agent may write excess or rejected business with another company after the agent's company rejected it or accepted it on a substandard basis, or a portion of a risk is above the limits of that which the agent's own insurer will accept.) Which of the following is INCORRECT about life insurance company appointments? A) Also applies to health applications B) An agent must be appointed for life and health insurance separately C) An agent may not use the same insurer appointment to sell life insurance and excess business The entities of state government involved in the regulation of the insurance business in Florida are? -The State Legislature -The Florida Dept of Financial Service -The State Courts -All of the above - ANSWER>>All of the above The Office of Insurance Regulation is NOT concerned with which of the following? -The assets and investments of insurance companies -The types and degree of risks of investments made by insurance companies -The examination of agent's income records -Limiting the amount that insurers can invest in different types of investments - ANSWER>>The examination of agent's income records The best definition of a legal reserve is? -The amount set aside by federal reserve banks as required by law -The amount set aside by the company for future liabilities as required by law -A leeway provision -None of the above - ANSWER>>The amount set aside by the company for future liabilities as required by law Fines and penalties for violating provisions of the agent's qualification laws include? -The denial, suspension, revocation and nonrenewal of License -A misdemeanor fine of not less than $500 nor more than $3500 - Imprisonment for not more than 6 months as well A misdemeanor fine of not less than $500 nor more than $3500 -All of the above - ANSWER>>All of the above Florida holds which of the following responsible for the content of any Medicare Supplement as using their name even if they did not approve the ad? -The insurer -The agent who ran the ad -The advertising association -The Agency of Ethical Conduct - ANSWER>>The insurer Must a mail-order insurance company be authorized to solicit insurance in the state of Florida? -Yes, and the applications must be taken by a Florida State Agent -No, since there is no personal contact any company can solicit by mail -Yes, but the applications do not have to be sent to a Florida address -No, Florida prohibits the sale of insurance without personal contact - ANSWER>>Yes, and the applications must be taken by a Florida State Agent Which of the following is NOT considered one of the renewability classifications? A) Optionally renewable B) Guaranteed renewable C) Conditionally cancellable D) Conditionally renewable - ANSWER>>Conditionally cancellable __________ are set aside by an insurance company and designated for the payment of future claims. A) Reserves B) Dividends C) Capital accounts When a Medical Expense plan pays eligible expenses directly to the hospital, physician, or surgeon, it is paying on a? A) Reimbursement basis B) Service basis C) Cash basis D) Scheduled basis - ANSWER>>Service basis Which is not a provider type? A) Service B) Reimbursement C) Blue Cross/Blue Shield D) Self-Insured - ANSWER>>Blue Cross/Blue Shield (Blue Cross/Blue Shield falls under the Service classification of provider. The 3 types of providers are Service, Reimbursement, and Self-Insured (Self-Funded).) What are the 3 provider types? -Service, Blue Cross/Blue Shield & Self-Insured -Blue Cross/Blue Shield, Service & Reimbursement -Service, Reimbursement & Self-Insured -None of the above - ANSWER>>Service, Reimbursement & Self-Insured (Blue Cross/Blue Shield falls under the Service classification of provider. The 3 types of providers are Service, Reimbursement, and Self-Insured (Self-Funded).) Fred's group health offers prepaid routine medical exams to provide early treatment and preventive care. He has what type of coverage? A) Blue Cross B) Hospital Indemnity C) PPO D) HMO - ANSWER>>HMO (HMOs emphasize preventive medicine and early treatment with prepaid routine medical exams, stress management, and diagnostic screening techniques.) A firm that provides administrative services for employers, acts as liaison between the insurer and employer and processes claims, etc. is a(n)? A) Third Party Administrator B) Administrative Services Only C) Staff Plan D) Gatekeeper - ANSWER>>Third Party Administrator (The key words are acts as liaison between the insurer and employer.) Sylvia is a participant in a Preferred Provider Organization (PPO) and finds that if she opts to use a provider other than a preferred provider, that? A) Her PPO will not pay at all. B) Her PPO will pay only if the circumstances for care were precipitated by an emergency. C) Her PPO will pay a reduced amount with Sylvia paying the balance. D) Her PPO will cover any charges in full. - ANSWER>>Her PPO will pay a reduced amount with Sylvia paying the balance. Which of the following is TRUE of traditional commercial insurers? A) They offer only individual plans of insurance. B) They offer only group plans of insurance. C) They traditionally market reimbursement type contracts that pay directly to the insured. ($4,500 - $250 deductible=$4,250 X 80%=$3,400 the insurer's portion). Insurer's total for the two claims=$4,800.) A Medical Expense Policy list of the amount the insurer will pay for each medical expense incurred is known as a _____ _____ _____. ? A) Conclusion of Benefits B) Schedule of Benefits C) Secluded Emergency Benefits D) Social Insurance Benefits - ANSWER>>Schedule of Benefits (Under a Schedule of Benefits, the amount payable is itemized for each medical expense covered by the plan.) The percentage of Scheduled Coverage in a Major Medical Plan is how much greater than in a Basic Medical Expense Plan? A) There are no schedules in a Major Medical Policy. B) 40% better coverage. C) 20% better coverage. D) Same coverage, major medical has more exclusions. - ANSWER>>There are no schedules in a Major Medical Policy. (Remember, a Major Medical Plan provides protection against health losses that may be catastrophic in nature with a lifetime maximum limit; usually there are no schedules included.) Hank was in the hospital last month for 3 days, today he received a check for $330. Is this a refund or a payment from a health policy? A) A benefit payment from his Hospital Income or Indemnity Policy. B) A refund from his doctor. C) A refund of premium triggered by hospitalization. D) He submitted the claim wrong and this is the total benefit. - ANSWER>>A benefit payment from his Hospital Income or Indemnity Policy. (The Hospital Income or Indemnity Policy pays directly to the insured a specified dollar (cash) amount per day during hospitalization.) Which type of insurance policy combines Basic Medical Expense Coverage with Major Medical Coverage? A) Supplemental Major Medical B) Hospital Expense C) Comprehensive Major Medical D) Surgical Expense - ANSWER>>Comprehensive Major Medical (A Comprehensive Major Medical Policy combines the best features of the basic policies and Major Medical policy into a single policy and provides the most complete hospital coverage.) Many insurers pay benefits based on the average fee charged in a geographical area. This is referred to as? A) Reimbursement B) Cash C) Scheduled D) Usual Customary and Reasonable - ANSWER>>Usual Customary and Reasonable (UCR is not scheduled, but is based on the average fee charged by all doctors in a given geographical area.) Which policy may be written with Basic Medical Expense Coverage utilizing a Corridor Deductible after the basic plan benefits have been exhausted and before Major Medical benefits begin? A) Supplementary Major Medical A) Waiting period B) Exclusion C) Probationary period D) Morbidity table - ANSWER>>Probationary period (The question establishes a period before coverage goes into effect for specified conditions, not a period before an employee is even eligible to enroll for group benefits, which would be a waiting period.) Beth has a contract stating she must be disabled for 3 months before benefits will be paid. This is considered the? A) Probationary Period B) Elimination Period C) Grace Period D) Contingency Period - ANSWER>>Elimination Period (The Elimination Period is a period of time that must expire after onset of an illness or occurrence of an accident before benefits will be payable.) Which is NOT a reason insurers limit disability income benefits to 70% or less of the insured's past earnings? A) Insurers limit the benefits simply because it keeps their expenses down. B) The full income is not paid in order to reduce malingering. C) The insurer considers other sources of disability income in order to prevent overinsurance. D) Insurers limit the length of the benefit to encourage the return to work. - ANSWER>>Insurers limit the benefits simply because it keeps their expenses down. (Although insurers are always sensitive to controlling expenses, that is not a factor in this question.) A court reporter develops arthritis making it impossible to continue this employment. The reporter now has other employment at a reduced salary and receives a monthly benefit from an insurance contract due to which of the following policy provisions? A) Residual Disability B) Recurrent Disability C) Partial Disability D) Total Disability - ANSWER>>Residual Disability (Residual Disability recognizes one's ability to continue to work, but at a reduction of earnings.Arthritis is what forms as a result of an injury from an accident or otherwise, therefore it's considered a residual disability.) Steve Borden, a kindergarten teacher, was in a boating accident and lost both legs. Although he will continue to teach, his disability policy pays full benefits because of this provision? A) Presumptive Disability B) Total Disability C) Partial Disability D) Residual Disability - ANSWER>>Presumptive Disability (Presumptive Disability is where a loss is presumed to be total and permanent due to loss of sight, hearing, speech or loss of two limbs.) This provision states that if there is a second disability due to the same cause within a specified period, then the elimination period may not apply the second time. It is which provision? A) Rehabilitation Disability Martha's Disability Income policy contains a definition of 'Presumptive Disability'. Each of the following situations would meet this definition, except? A) Loss of a limb B) Loss of sight C) Loss of hearing D) Loss of speech - ANSWER>>Loss of a limb (Presumptive Disability involves the loss of two or more limbs, not the loss of one limb only.) Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A) Increase the benefit period and shorten the elimination period. B) Shorten the elimination period and increase the amount of the benefit. C) Shorten the benefit period and increase the elimination period. D) Increase the benefit period and increase the amount of the benefit. - ANSWER>>Shorten the benefit period and increase the elimination period. (All other possible answers actually increase the risk.) Penelope received benefits from her disability policy and went back to work. After 30 days she found she was not able to work and began to immediately receive her disability payments. Which of following provisions made this possible? A) Recurrent Disability Provision B) Residual Disability Provision C) Presumptive Disability Provision D) Second Injury Provision - ANSWER>>Recurrent Disability Provision Accident and Health Insurance, insures for two major perils, they are? A) Driving under the influence and driving while intoxicated. B) On the job and off the job. C) Accidental injury and sickness. D) Automobile and home health care. - ANSWER>>Accidental injury and sickness. Which contract would a bus line passenger purchase to cover injuries sustained while traveling across the United States? A) Blanket B) Limited Accident C) Common Carrier Insurance D) Liability Insurance - ANSWER>>Limited Accident (A Limited Accident Policy provides specific benefits for specific injuries from specific causes such as travel.) Which statement is INCORRECT concerning an Accidental Death and Dismemberment Policy? A) It provides a specified payment for a specified injury. B) May be written separately or added to a Health/Disability or Life Policy as a rider. C) It usually provides that the death benefit (Principal) will also be paid if the insured loses sight in both eyes or loses any two limbs. D) A smaller amount (Capital) may be paid for the loss of sight in one eye or the loss of one limb. - ANSWER>>It provides a specified payment for a specified injury. (This is describing a Limited Accident Policy, not an Accidental Death and Dismemberment Policy.) Hospital Treatment (Part A of Medicare is Hospital Insurance or (Inpatient); Part B of Medicare is Medical Insurance or (Outpatient).) Which of the following is INCORRECT regarding how Medicare works? A) Part B is optional and offered to applicants when they become entitled to Part A. B) Part A is premium free to those who qualify through Social Security or railroad retirement or government employment. C) Part B covers routine physical exams and dialysis for those with kidney failure. D) Part B - outpatient service benefits are determined by consulting a national fee schedule. - ANSWER>>Part B covers routine physical exams and dialysis for those with kidney failure. A program designed to provide increased assistance to those who are unable to pay for their medical needs is known as? A) Medicaid (In California, Medi-Cal) B) Medicare Part A C) Supplemental Security Income D) State Supplemental Payment Program - ANSWER>>Medicaid (In California, Medi-Cal) (Medicaid (in California, Medi-Cal) is the federal and state administered program that provides increased assistance to those who are unable to pay for their own medical needs.) Part A of Medicare is known as? A) Medical Insurance B) Medicare + Choice C) Outpatient Insurance D) Hospital Insurance - ANSWER>>Hospital Insurance (Part A of Medicare is formally known as Hospital Insurance (Inpatient). Part B is formally known as Medical Insurance (Outpatient)) This is a product designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. This product is called? A) Long-Term Care B) Medicare Supplement C) Retirement Benefits D) Outpatient Care - ANSWER>>Long-Term Care (The question is describing a Long-Term Care Policy. Medicare Supplement is incorrect as it covers skilled nursing care only, and then on a limited basis by number of days.) Exclusions listed in the policy are NOT covered. Which of the following is not an exclusion? A) Intentionally self-inflicted injuries B) Elective cosmetic surgery C) Nonoccupational injuries D) Care in a government facility - ANSWER>>Nonoccupational injuries (Nonoccupational injuries are covered. Job related or occupational injuries are typically excluded as they are covered by Workers' Compensation.) Which Long-Term Care definition does not match the coverage? A) Respite Care B) Adult Day Care C) Hospice Care D) Home Health Care - ANSWER>>Respite Care (All responses are optional coverages to LTC insurance, but the question is specifically making reference to the caregiver, not the insured.) Which of the following is CORRECT concerning an LTC policy? A) Defining a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage. B) Providing coverage for only skilled nursing care instead of lower levels of care. C) Cancelling, nonrenewing, or terminating a policy on the grounds of age. D) Establishing a new waiting period when existing coverage is converted or replaced by a new form, except when the insured voluntarily selects an increase in benefits. - ANSWER>>Defining a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage. The policy, a copy of the application, any riders and policy endorsements constitute the _____ _____. A) Entire contract B) Legal actions C) Time limit D) Whole policy - ANSWER>>Entire contract (The Entire Contract Provision (a Mandatory Uniform Provision) stipulates that the policy, a copy of the application and any riders constitutes the entire contract between the insurer and insured.) Notice of claim is required within _____ days of loss. A) 90 B) 15 C) 20 D) 10 - ANSWER>>20 (The insured under the Notice of Claim Provision (a Mandatory Uniform Provision) is required to notify the insurer, in writing, within 20 days of any loss.) Proof of loss is required within _____ days of loss. A) 45 B) 180 C) 60 D) 90 - ANSWER>>90 (The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates the insured is to prove their loss within 90 days of the loss, or in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity.) Which of the following is not a Mandatory Uniform Provision? A) Payments of Claims B) Reinstatement C) Conformity with State Statutes D) Physical Exam & Autopsy - ANSWER>>Conformity with State Statutes