Massachusetts Health & Accident Insurance Exam Questions And Answers Latest Update 2025, Exams of Insurance Economics

Download Massachusetts Health & Accident Insurance Exam Questions And Answers Latest Update 2025 and more Exams Insurance Economics in PDF only on Docsity!

Insurance Exam Questions And Answers

Latest Update 2025

Hazard - - - correct answer ✅Situation that increases chance of loss Annuity - - - correct answer ✅Policy issued by an insurance company to promise you an income that can last you a lifetime Insurer - - - correct answer ✅An insurance company Insured - - - correct answer ✅A person or business covered by an insurance policy Health Insurance - - - correct answer ✅Broad field of insurance plans that provide protection against financial consequences of illness, accidents, injury, and disability

• Paid on a year-to-year basis
• Subject to periodic premium increases
• Benefits not fixed

Insurance Exam Questions And Answers

Latest Update 2025

Medical Expense Insurance - - - correct answer ✅Pays benefits for nonsurgical doctors' fees commonly rendered in a hospital; sometimes pays for home and officecalls Disability Income Insurance - - - correct answer ✅Provide a replacement income when wages are lost due to disability; based on education, training, experience

• income creates limits
• monthly income payments
• highest premium = 14 day waiting period w/ 10 year benefit
• ceiling amount Accidental Death and Dismemberment Insurance (AD&D) - - - correct answer ✅Provides the insured with a lump-sum benefit amount in the event of accidental death or dismemberment under accidental circumstances Interim Coverages - - - correct answer ✅Term insurance for a period of months or less by special agreement of the company; it permits a permanent policy to become effective at a selected future date.

Insurance Exam Questions And Answers

Latest Update 2025

Interim - - - correct answer ✅the intervening time Subrogation - - - correct answer ✅the right for an insurer to pursue a third party that caused an insurance loss to the insured Business Continuation Plans - - - correct answer ✅continue the operation of the business in the event of a disabling sickness to a business owner or key employee Employee Benefit Plans - - - correct answer ✅- help employee in event of disabling sickness or injury

• rare to not include provision of health insurance/benefits
• contributes to morale and productivity of employee
• provides needed benefits (helps hold down demands for wage increases)
• gives employer tax deductions
• enhances employer image

Insurance Exam Questions And Answers

Latest Update 2025

Business Overhead Expense Insurance - - - correct answer ✅- sold individually

• designed to reimburse business for overhead expenses in the event a business owner becomes disabled (day to day operations)
• does not include compensation for disabled owner
• premiums are tax-deductible as insurance expense
• benefits are taxable income Disability Buy-Sell Plan/Disability Buy-Outs - - - correct answer ✅An agreement between business co-owners that provides that shares owned by any one of them who becomes disabled shall be sold to and purchased by the other co-owners or by the business using funds from disability income insurance.
• legal binding agreement funded with disability income policy
• pay benefits in periodic payments
• buy-out plan contains provision allowing for a lump-sum payment of the benefit
• benefits tax-free
• premiums not tax deductible
• lengthy elimination periods (2+ yrs)

Insurance Exam Questions And Answers

Latest Update 2025

Key Person Disability Insurance - - - correct answer ✅- pays monthly benefit to a business for additional help or outside services when an essential person is disabled

• key persons economic value to a business is determined by potential loss of business income that could occur (hiring price)
• business = owner and premium payer of policy
• benefits tax-free
• premiums not tax deductible
• policies reserved for "hard to replace" employees or key sales members Group Health Insurance - - - correct answer ✅- between insurance company and group (employer)
• health insurance through group master contracts
• employer may pay premium or require contribution from each member
• master policy
• insureds receive certificates of insurance and an outline that describes benefits

Insurance Exam Questions And Answers

Latest Update 2025

• more extensive benefits
• higher benefit maximums
• benefits predetermined by employer
• group health coverage = natural group
• minimum number of persons covered established by state law
• impose eligibility requirements before participating
• less costly/less expenses Premium - - - correct answer ✅The amount you pay for your health insurance every month Probationary Period - - - correct answer ✅period of time where a new employee is ineligible for group health insurance coverage (start a new job) Enrollment Period - - - correct answer ✅limited period of time where all members may sign up for a group loan

Insurance Exam Questions And Answers

Latest Update 2025

Coordination of Benefits Provision - - - correct answer ✅- Designed to prevent duplication of group insurance benefits. Limits benefits from multiple group health insurance policies in a particular case to % of the expenses covered and designates the order in which the multiple carriers are to pay benefits.(married couples) Provider - - - correct answer ✅designation of any healthcare provider Overutilization - - - correct answer ✅when health benefits are too high Group Health Insurance Premium Factors - - - correct answer ✅- size of group

• claims experienced with previous insurers
• ages Contributory - - - correct answer ✅- employees share portion of premium
• require 75% participation

Insurance Exam Questions And Answers

Latest Update 2025

Noncontributory - - - correct answer ✅- employer pays entire premium and employee does not contribute

• require 100% participation from eligible members
• minimum requirements protect insurer against adverse selection Shared Funding Arrangement (Group Funding Option) - - - correct answer ✅allows employer to self-fund healthcare expenses up to a certain point Minimum Premium Arrangement (Group Funding Option) - - - correct answer ✅allows employer to self-insure normal and expected claims up to a given amount (insurer funds excess amounts) Retrospective Premium Arrangement (Group Funding Option) - - - correct answer ✅insurer agrees to collect a provisional premium but may collect additional premium or make refund at end of year based on actual incurred losses

Insurance Exam Questions And Answers

Latest Update 2025

Self-Funding Arrangement (Group Funding Option) - - - correct answer ✅large employers may elect to fully self-fund but contract from administrative services only Insurance Claim - - - correct answer ✅formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event Underwriter - - - correct answer ✅person who evaluates and classifies risks to accept or reject them on behalf of the insurer (reduce risk of adverse selection) Underwriting Group Insurance - - - correct answer ✅- insurer evaluates group as a whole

• accepted or rejected based on risk profile Underwriting Considerations of Groups - - - correct answer ✅- reason for groups existence

Insurance Exam Questions And Answers

Latest Update 2025

• stability of group
• persistency of group
• method of determining benefits
• how eligibility is determined
• source of premium payments ((non)contributory)
• prior claims
• size and composition
• industry/business HIPPA (Health Insurance Portability and Accountability Act) - - - correct answer ✅- protect health care coverage for individuals who lose or change their jobs
• allows individuals to reduce or eliminate preexisting conditions excluded under new plan
• limited ability of employer-sponsored groups and insurers to exclude individuals on the basis of preexisting medical conditions (July 1, 1997)
• eligible for new insurance upon hire
• 10% excise tax for early withdrawal from IRA's will not apply to the extent a withdrawal is used for medical expenses that exceed 7.5% of the individuals adjusted gross income

Insurance Exam Questions And Answers

Latest Update 2025

Preexisting Conditions - - - correct answer ✅- medical advice/treatment received within 6 months ending on enrollment date

• cannot extend longer than 12 months
• new employees enrolling cannot have a gap larger than 63 days w/ out healthcare insurance for preexisting conditions Credible Coverage - - - correct answer ✅prior to group health insurance that reduces maximum preexisting exclusion period that a new group health plan can apply to that individual Conversion Privilege - - - correct answer ✅- allows insured to convert group certificate to an individual medical expense policy with the same insurer
• available to terminated employees
• exercised within 30-31 days depending on state Excess Benefits - - - correct answer ✅

Insurance Exam Questions And Answers

Latest Update 2025

Refusal of Policy Renewal - - - correct answer ✅refusing a policy... - benefits resulting in over insurance

• fraud or material misrepresentation
• if insured is covered under Medicare HIPPA Privacy Rule - - - correct answer ✅- federal protection for individuals health information and gives patients an array of rights in respect to health information
• individually identifiable = health claim information
• requires healthcare providers to disclose info
• notice of information practices must be given to a policyholder at least every 3 years HIPPA Security Rule - - - correct answer ✅provides technological safeguards to ensure confidentiality of electronic health information HIPPA Rules apply to... - - - correct answer ✅...group health plans; excludes coverage (workers compensation/disability income plans)

Insurance Exam Questions And Answers

Latest Update 2025

COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985) -

correct answer ✅federal law that guarantees a continuation of group coverage if terminated (unless misconduct)

• requires 20+ employees
• up to 18 months coverage (29 if disabled)
• 36 months (death, Medicare, divorce)
• does not protect if covered by medical, surgical, or hospital group plans
• employer must provide written notification of continuation privilege
• benefits will end if employer terminates health plans
• 102% Group Coverage Exclusions - - - correct answer ✅Dental/Vision/Prescription Drug Benefits Pregnancy Discrimination Act of 1978 - - - correct answer ✅- amendment to Civil Rights Act of 1964
• designed to prohibit sex discrimination on basis of pregnancy

Insurance Exam Questions And Answers

Latest Update 2025

• treat as disability
• requires group coverage plans of 15+ people Health insurance group plans are predetermined by - - - correct answer ✅the employer in conjunction with the insurer's benefit schedules and covering limits Group Basic Medical Expense - - - correct answer ✅combines two or more coverages or only one type of coverage
• hospital, surgical, physicians expenses Group Major Medical Plans - - - correct answer ✅offered as single extensive plan (comprehensive major medical) or group (supplemental major medical)
• required to satisfy initial deductible (comprehensive)
• required to satisfy corridor/integrated deductible (supplemental)
• extensive benefits
• begins on effective date (possible waiting period)

Insurance Exam Questions And Answers

Latest Update 2025

Dental & Vision Care - - - correct answer ✅cover costs associated with dental maintenance, oral surgery, root canal, orthodontia

• reasonable and customary charge
• dollar per service schedule cost coverage for eye exams
• exclusion = Lasik surgery Section 125 Plan (Cafeteria Plan) - - - correct answer ✅- benefit arrangements where employees can pick and choose from a menu of benefits tailoring to their needs
• convert taxable cash benefit (salary) into nontaxable benefits
• able to pay for qualified benefit premiums before any taxes are deducted from paychecks
• S-Corp owner w/ 2% share is ineligible
• can forgo lesser important benefits
• Church employee welfare plans exempt (ERISA) Wellness Programs - - - correct answer ✅- promote employee health and productivity

Insurance Exam Questions And Answers

Latest Update 2025

• reduce health related costs
• can be offered by insurance plans directly Group Disability Income Plans - - - correct answer ✅- provide a totally disabled covered employee with a benefit of up to 60% of their pre-disability income, to a specified maximum, such as $10,000 a month (specify benefits in terms of a percentage of the individuals earnings; disability)
• require minimum period of service (30 or 90 days)
• full contributory = tax free
• short term plans: maximum benefit periods of short duration ( or 26 weeks)
• long term plans: maximum benefit periods 2+ yrs (possibly until retirement) Group Health Plan Termination - - - correct answer ✅- employer or fiduciary must provide 45 day notice of termination of health plan
• cannot purposely cause cancellation/nonrenewal
• violations = Class H Felony

Insurance Exam Questions And Answers

Latest Update 2025

Renewability Provisions - - - correct answer ✅- whole life insurance and annuities characterized by permanence; cannot be cancelled by insurer unless policyowner fails to make premium payment

• health insurance = many provisions which define rights of insurer to cancel policy
• the more advantageous the more expensive
• 30 days given to policyholder (<10%) Offset Payments - - - correct answer ✅- group disability benefits are decreased by disability income received from govt. plans, pensions, or social insurance (SS)
• pay monthly income benefit win addition to any income derived from other sources Group AD&D - - - correct answer ✅- supplement their life insurance coverage with additional protection if they or a family member dies or is dismembered as a result of a covered accident
• does not include a conversion privilege

Insurance Exam Questions And Answers

Latest Update 2025

• may be provided for both occupational and nonoccupation losses (or nonoccupationally losses solely) Voluntary Group AD&D - - - correct answer ✅employee-pay-all plans Blanket Health Plans - - - correct answer ✅ Franchise Health Plans (Wholesale Plans) - - - correct answer ✅- health insurance coverage to members of an association/professional society
• association serves as sponsor of plan
• premium rates discounted Credit Accident & Health Plans - - - correct answer ✅- help insured pay off loan in the event of disability due to accident or sickness
• disability provides for monthly benefit payments equal to monthly loan payments due

Insurance Exam Questions And Answers

Latest Update 2025

Health Savings Accounts (HSA) - - - correct answer ✅- tax favored vehicle for accumulating funds to cover medical expenses

• under age of 65 eligible to contribute to HSA
• annual contributions up to 100% of individuals health plan deductible can be made to HSA
• age 55 to 65 can make catch up contribution
• earnings grow tax free
• beneficiaries can make tax free withdrawals Qualified health care expenses include - - - correct answer ✅- doctors fees
• (non)prescription medication
• necessary hospital expenses not paid for by insurance
• retiree health insurance premiums
• Medicare (no Medigap)
• qualified long term care services
• COBRA

Insurance Exam Questions And Answers

Latest Update 2025

Non-Occpational Health Plan - - - correct answer ✅policy that does not cover injuries sustained while at work because they are covered by workers compensation Group Health Plan Tax - - - correct answer ✅- employers entitled to take tax deduction for premium contributions they make to group health plan

• individual premium contributions are NOT tax deductible
• any benefits received are NOT tax deductible
• disability benefit payments attributed to employee contributions are NOT tax deductible (unless by employer)
• sole proprietors get tax deductions
  • no federal income tax; proceeds are part of insured's taxable estate Accidental Death and Dismemberment Insurance - - - correct answer ✅- covers fatal accident or dismemberment of accidental injury
• pure accident coverage
• provides a lump sum benefit

Insurance Exam Questions And Answers

Latest Update 2025

Principal Sum - - - correct answer ✅amount payable as death benefit Capital Sum - - - correct answer ✅amount payable for accidental loss of sight or accidental dismemberment Limited Risk Policy - - - correct answer ✅set forth specific risk and provide benefits to cover death or dismemberment due to an accident Special Risk Policies - - - correct answer ✅this policy covers unusual hazards normally not covered under ordinary accident and health insurance Commercial Insurance Providers - - - correct answer ✅life insurance companies, casualty insurance companies, and monoline companies Blue Cross & Blue Shield - - - correct answer ✅- service base rather than reimbursement

• "subscribers"

Insurance Exam Questions And Answers

Latest Update 2025

• prepaid plans
• nonprofit Health Maintenance Organization (HMO) - - - correct answer ✅- health care subscription (prepayment)
• organize and deliver services at local health care facilities
• preventative care
• 25+ employees
• capitation; physician payment
• sponsored by insurance companies Preferred Provider Organization (PPO) - - - correct answer ✅- collection of health care providers who offer services to groups at prearranged discount prices
• fee for service rendered basis
• employers and insurance companies
• non PPO = higher out of pocket expense Ambulatory Care - - - correct answer ✅health care consultation, treatment or

Insurance Exam Questions And Answers

Latest Update 2025

intervention using advanced medical technology or procedures delivered on outpatient basis

• handles; surgery, physicals, immunizations Government Insurance Programs - - - correct answer ✅encourage economic development
• Medicare Medicare - - - correct answer ✅- provide hospital and medical expense insurance to age 65+
• administered by The Centers for Medicare and Medicaid Services
• no dental care Medicare Part A (Hospital Insurance) - - - correct answer ✅- hospitals, nursing care, and hospice
• starts the day entered hospital
• maximum 100 days per benefit period in a skilled nursing facility (days 1-20pay 100%; days 21-100 pay flat dollar amount per day)
• 190 days maximum inpatient psychiatric care
• funded by payroll and self employment taxes

Insurance Exam Questions And Answers

Latest Update 2025

Medicare Part B (Medical Insurance) - - - correct answer ✅- doctors services, outpatient services and medical supplies (services not covered by "A")

• funded by general tax revenue and user premuims Excess Change - - - correct answer ✅- difference between physicians actual charges and Medicare's approved amount
• January 1 through March 31 Medicare Part D - - - correct answer ✅drug coverage Social Security Disability Income - - - correct answer ✅- issued by govt. - need to be fully insured
• max benefits = 100% of insureds Primary Insurance Amount
• mental/physically disabled (cannot work)
• impairment must last 12 months
• 5 month waiting period
• spouse and children entitled to benefit

Insurance Exam Questions And Answers

Latest Update 2025

Medicaid - - - correct answer ✅- provided basic medical services to whom not part of the Social Security

• low income, blind, disabled, under 21
• benefits applied to Medicare deductibles and co payment requirements
• funded by fed and state
• nursing home expenses Tri-Care - - - correct answer ✅military families Federal Employees Health Benefits Program (FEHB) - - - correct answer ✅covers employees of the federal government State Workers' Compensation Programs - - - correct answer ✅- compensate for lost wages and medical expenses due to occupational accidents
• worker compensation laws
• no limit