Chapter 1: Health And Accident Insurance (2023)

1.
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 (blank) day gap without previous health insurance.
- A.&nbsp
  45
- B.&nbsp
  63
- C.&nbsp
  75
- D.&nbsp
  90
Correct Answer
B. 63
2.
Group health plans may deny participation based upon the
- A.&nbsp
  Member's claims history
- B.&nbsp
  Member's current age
- C.&nbsp
  Member's pre-existing condition
- D.&nbsp
  Member' part-time employment status
Correct Answer
D. Member' part-time employment status
3.
How many employees must an employer have for a terminated employee to be eligible for COBRA?
- A.&nbsp
  20
- B.&nbsp
  30
- C.&nbsp
  40
- D.&nbsp
  50
Correct Answer
A. 20
4.
Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
- A.&nbsp
  It would be considered taxable income to the employee
- B.&nbsp
  The employee would not be allowed to an HSA
- C.&nbsp
  The employer would pay payroll tax and FICA on the contribution amount
- D.&nbsp
  The employer would not be allowed to deduct the contribution from the employee's pay
Correct Answer
A. It would be considered taxable income to the employee
5.
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?
- A.&nbsp
  April 1
- B.&nbsp
  April 6
- C.&nbsp
  May 15
- D.&nbsp
  May 30
Correct Answer
D. May 30
6.
Credit Accident and Health plans are designed to
- A.&nbsp
  Permit creditors the ability to require that coverage be purchased through insurers of their choice
- B.&nbsp
  Provide permanent protection
- C.&nbsp
  Help pay off existing loans during periods of disability
- D.&nbsp
  Not permit free choice of coverage selection
Correct Answer
C. Help pay off existing loans during periods of disability
7.
What is the contract called that is issued to an employer for a Group Medical Insurance Plan?
- A.&nbsp
  Master policy
- B.&nbsp
  Certificate of coverage
- C.&nbsp
  Provisional policy
- D.&nbsp
  Document of coverage
Correct Answer
A. Master policy
8.
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must
- A.&nbsp
  Be less extensive and premium cannot exceed 102%
- B.&nbsp
  Be the same and the premium cannot exceed 102%
- C.&nbsp
  Be more extensive and the premium cannot exceed 102%
- D.&nbsp
  Be the same as well as the premium
Correct Answer
B. Be the same and the premium cannot exceed 102%
9.
Which of the following would evidence ownership in a participating health insurance contract?
- A.&nbsp
  Stock ownership
- B.&nbsp
  Irrevocable beneficiary status
- C.&nbsp
  Policy ownership
  See Also
  What Is a Peril in Homeowners Insurance?What Does Health Insurance Cover (& Not Cover) In 2023?What is an Insurance Peril? Understanding Risks - Assurance IQ What Is an Insurance Peril? - Policygenius
- D.&nbsp
  Collateral assignment
Correct Answer
C. Policy ownership
10.
An employer is issued a group medical insurance policy. This single contract is known as a(n)
- A.&nbsp
  Entire contract
- B.&nbsp
  Master policy
- C.&nbsp
  Certificate of coverage
- D.&nbsp
  Employer contract
Correct Answer
B. Master policy
11.
Under group health insurance, a certificate of coverage is issued to the
- A.&nbsp
  Employer
- B.&nbsp
  Employee
- C.&nbsp
  Producer
- D.&nbsp
  Sponsor
Correct Answer
B. Employee
12.
Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?
- A.&nbsp
  Presumptive disability provision
- B.&nbsp
  Absolute accidental provision
- C.&nbsp
  Accidental death benefit provision
- D.&nbsp
  Accidental bodily injury provision
Correct Answer
D. Accidental bodily injury provision
13.
Health insurance involves two perils, accident and (blank).
- A.&nbsp
  Death
- B.&nbsp
  Sickness
- C.&nbsp
  Disability
- D.&nbsp
  Liability
Correct Answer
B. Sickness
14.
Health insurance will typically cover which of the following perils?
- A.&nbsp
  Death due to illness
- B.&nbsp
  Injury due to accident
- C.&nbsp
  Death due to accident
- D.&nbsp
  Dismemberment
Correct Answer
B. Injury due to accident
15.
Which of the following does Coordination of Benefits allow?
- A.&nbsp
  Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
- B.&nbsp
  Allows both a group health plan and individual health plan to coordinate their benefit payments
- C.&nbsp
  Allows the deductible to be spread out between all the health providers
- D.&nbsp
  Allows each health provider to pay 100% of the claim
Correct Answer
A. Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid
16.
The purpose of the Coordination of Benefits provision in group accident and health plans is to
- A.&nbsp
  Avoid overpayment of claims
- B.&nbsp
  Reduce out-of-pocket costs
- C.&nbsp
  Reduce adverse selection
- D.&nbsp
  Lower the cost of premiums
Correct Answer
A. Avoid overpayment of claims
17.
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
- A.&nbsp
  Costs that exceed 7 1/2 % of AGI
- B.&nbsp
  Costs that exceed 10% of AGI
- C.&nbsp
  100% of costs
- D.&nbsp
  No deduction permitted
Correct Answer
C. 100% of costs
18.
A person covered with an individual health plan
- A.&nbsp
  Is issued a policy
- B.&nbsp
  Is issued a certificate of medical costs
- C.&nbsp
  Does not contract directly with the insurance company
- D.&nbsp
  Is not subject to medical underwriting
Correct Answer
A. Is issued a policy
19.
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
- A.&nbsp
  Is eligible for coverage upon hire
- B.&nbsp
  Must wait 360 days to be eligible for coverage
- C.&nbsp
  Must continue coverage with the previous employer
- D.&nbsp
  Is eligible for only health insurance, not life or dental insurance
Correct Answer
A. Is eligible for coverage upon hire
20.
When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?
- A.&nbsp
  When a change of management has occurred within the group
- B.&nbsp
  When the annual number of claims has increased by 25%
- C.&nbsp
  When contribution or participation rules have been violated
- D.&nbsp
  When group participation has increased by 25%
Correct Answer
A. When a change of management has occurred within the group
21.
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called
- A.&nbsp
  Contributory
- B.&nbsp
  Indemnity
- C.&nbsp
  Estoppel
- D.&nbsp
  Subrogation
Correct Answer
D. Subrogation
22.
Which of the following decisions would a Health Savings Account (HSA)owner NOT be able to make?
- A.&nbsp
  The amount contributed by the employer
- B.&nbsp
  The amount contributed by the owner
- C.&nbsp
  The underlying account investments used
- D.&nbsp
  The medical expenses paid for by the HSA
Correct Answer
A. The amount contributed by the employer
23.
In an employer-sponsored group accident and health plan, a master contract is issued to the
- A.&nbsp
  TPA
- B.&nbsp
  Employees
- C.&nbsp
  Adminstrative Services Organization
- D.&nbsp
  Employer
Correct Answer
D. Employer
24.
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
- A.&nbsp
  Employee has no tax liability
- B.&nbsp
  40% of the benefit
- C.&nbsp
  60% of the benefit
- D.&nbsp
  100% of the benefit
Correct Answer
C. 60% of the benefit
25.
A common exclusion with Vision plans is
- A.&nbsp
  Eyeglass frames
- B.&nbsp
  The examination
- C.&nbsp
  Contact lenses
- D.&nbsp
  Lasik surgery
Correct Answer
D. Lasik surgery
26.
Which of the following is typically NOT eligible for coverage in a group health policy?
- A.&nbsp
  Full-time employee
- B.&nbsp
  Temporary employee
- C.&nbsp
  Business owner
- D.&nbsp
  Partner in a partnership
Correct Answer
B. Temporary employee
27.
Which of the following is INELIGIBLE to participate in a Section 125 Plan?
- A.&nbsp
  Key Employee in a C-Corp
- B.&nbsp
  Highly Compensated Employee in an S-Corp
- C.&nbsp
  An C-Corp Owner with a greater than 2% share
- D.&nbsp
  An S-Corp Owner with a greater than 2% share
Correct Answer
D. An S-Corp Owner with a greater than 2% share
28.
Key Person Disability Insurance pays benefits to the
- A.&nbsp
  Hospital
- B.&nbsp
  Employee
- C.&nbsp
  Employer
- D.&nbsp
  Employee's creditors
Correct Answer
C. Employer
29.
Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?
- A.&nbsp
  Partially taxable income
- B.&nbsp
  Non-taxable income
- C.&nbsp
  Taxable income
- D.&nbsp
  Conditionally taxable income
Correct Answer
C. Taxable income
30.
The limited period of time given to all members to sign up for a group health plan is called the
- A.&nbsp
  Enlistment period
- B.&nbsp
  Sign-up period
- C.&nbsp
  Probationary period
- D.&nbsp
  Enrollment period
Correct Answer
D. Enrollment period
31.
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?
- A.&nbsp
  He's not eligible for Medicare
- B.&nbsp
  His group health plan and Medicare pay 50/50
- C.&nbsp
  Medicare is the secondary payer
- D.&nbsp
  Medicare is the primary payer
Correct Answer
C. Medicare is the secondary payer
32.
Which of the following would be considered a possible applicant and contract policyholder for group health benefits?
- A.&nbsp
  Human resource department
- B.&nbsp
  Employer
- C.&nbsp
  Insured employee
- D.&nbsp
  Insurance company
Correct Answer
B. Employer
33.
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?
- A.&nbsp
  $100
- B.&nbsp
  $250
- C.&nbsp
  $500
- D.&nbsp
  $1,000
Correct Answer
C. $500
34.
Continued coverage under COBRA would be provided to all of the following EXCEPT:
- A.&nbsp
  Former dependent of employee no longer of dependent status
- B.&nbsp
  Terminated employee
- C.&nbsp
  Divorced spouse of employee
- D.&nbsp
  A covered employee is terminated for gross misconduct
Correct Answer
D. A covered employee is terminated for gross misconduct
35.
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
- A.&nbsp
  Disability overhead policy
- B.&nbsp
  Business continuation policy
- C.&nbsp
  Disability buy-sell policy
- D.&nbsp
  Business overhead expense policy
Correct Answer
D. Business overhead expense policy

Chapter 1: Health And Accident Insurance (2023)

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 (blank) day gap without previous health insurance.

Group health plans may deny participation based upon the

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

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

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?

Credit Accident and Health plans are designed to

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

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

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

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

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

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

Health insurance involves two perils, accident and (blank).

Health insurance will typically cover which of the following perils?

Which of the following does Coordination of Benefits allow?

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

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

A person covered with an individual health plan

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

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

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

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

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

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

A common exclusion with Vision plans is

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

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

Key Person Disability Insurance pays benefits to the

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

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

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?

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

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?

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

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