Note 8 - Health Law

Commercial insurance companies function on the reimbursement approach. Policyowners obtain medical treatment from whatever source they feel is most appropriate and submit their charges to their insurer for reimbursement. Which of the following services is NOT covered under a hospitalization expense policy? surgeon's fees Which of the following services is NOT covered under a hospitalization expense policy? surgeon's fees Which of the following situations does a critical illness plan cover? - leukemia Which of the following situations does a Critical Illness plan cover? - Leukemia Which of the following statements about a business entity acting as an insurance agent is CORRECT? - it must designate at least 1 licensed producer to be responsible for the entity's compliance with the insurance laws and rules Which of the following statements about a Guaranteed Renewable Health Insurance policy is correct? - Premiums normally increase at time of renewal Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? - If the employee paid for qualified medical expenses, the reimbursements may be tax-free Which of the following statements about Individual Accident and Health minimum standards is CORRECT? - Minimum standards apply to policy definitions as well as to benefits Which of the following statements about the classification of applicants is INCORRECT? Substandard applicants are never declined by underwriters Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges - The maximum amount considered eligible for reimbursement by an insurance company under a health plan Which of the following statements BEST describes dental care indemnity coverage? - Services are reimbursed after insurer receives the invoice Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means' definition? Less restrictive Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? - Discourages over utilization of the insurance coverage Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? - An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed Which of the following statements describes what an Accident and Health policy owner may NOT do? - Adjust the premium amounts Which of the following statements does not accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance? - Disability income policy premiums are tax-deductible Which of the following statements is CORRECT about a Health Maintenance Organization (HMO)? - Its providers must be under contract or employment Which of the following statements is CORRECT about a licensed business entity acting as an insurance agent? - They must notify the Bureau of Insurance of any fictitious name used Which of the following statements is CORRECT about non-partnership Long-Term Care insurance? - Inflation protection must be offered to applicants for a Long-term care policy. Which of the following statements is correct regarding an employer/employee group health plan? - the employer receives a master policy and the employees receive certificates Which of the following statements is true about most Blue Cross/Blue Shield organizations? They are nonprofit organizations Which of the following types of care is typically not covered in a Long-Term Care policy? acupuncture Which of the following types of health coverage frequently uses a deductible? - Major medical policy most major medical benefits begin to be paid after the deductible is satisfied Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements? HMO Which of the following will a Long Term Care plan typically provide benefits for? - home health care Which of these actions should a producer take when submitting an insurance application to an insurer? - Inform insurer of relevant information not included on the application Which of these arrangements allows one to bypass insurable interest laws - Investor-originated life insurance Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies. Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? - Business owner becoming disabled Which of these do NOT constitute policy delivery? - Policy issued with a rating Which of these factors do NOT play a role in the underwriting of a health insurance policy? Marital status Which of these is considered a mandatory provision? - Payment of Claims Which of these is considered a statement that is assured to be true in every respect? - Warranty Which of these is considered a true statement regarding Medicaid? - Funded by both state and federal governments Which of these is NOT a characteristic of a Health Reimbursement Arrangement (HRA)? Employee funds the HRA entirey Which of these is not considered to be an element of an insurance contract - negotiating Which of these is NOT considered to be an element of an insurance contract? - negotiating Which of these options can an individual use their medical flexible spending account to pay for? - prescription drugs Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health Policy? - Premiums are waived after the insured has been totally disabled for a specified time period. Which of these statements concerning an individual Disability Income policy is TRUE? Normally includes an Elimination period Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)? - PPO's are NOT a type of managed care systems PPO's ARE considered to be a managed health care system. Which of these terms accurately defines an underwriter's assessment of information on a health insurance application? - Risk classification Underwriting, another term for risk selection, is the process of reviewing the many characteristics that make up the risk profile of an applicant to determine if the applicant is insurable and, if so, at standard or substandard rates. Which parts of a health insurance policy are guaranteed to be true? - Warranty Warranties are statements that are considered literally true. A warranty that is not literally true in every detail, even if made in error, is sufficient to render a policy void. Which statement is TRUE regarding a group accident & health policy issued to an employer? The employer receives the policy and each employee is issued a certificate. Explanation: With a group accident and health plan, a master policy is issued to the employer and each employee receives a certificate of insurance Which statement is true regarding a minor beneficiary? - Normally, a guardian is required to be appointed in the Beneficiary clause of the contract Which type of plan normally includes hospice benefits - Managed care plans Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? Reimbursement Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - Business overhead expense Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - Business Overhead Expense Which type of provider is known for stressing preventative medical care? - Health Maintenance Organizations (HMOs) Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? - Guaranteed Renewable Who is NOT required to sign a health insurance application - Beneficiary adult insured, policy owner, and producer all are required Who makes the legally enforceable promises in a unilateral insurance policy? - Insurance Company Why is an applicant's signature required on a health insurance application? - To attest that the statements on the application are accurate to the best of the applicant's knowledge With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period? Gives the policyowner additional time to pay overdue premiums With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's: - Gross income at the time of purchase With Optionally Renewable Health policies, the insurer may: - review the policy annually and determine whether or not to renew it XYZ Company pays the entire premium for its group health plan. The minimum percentage of eligible employees that must be covered is - 100% Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: - March 1 The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. After a 30day Elimination period, Z will become eligible for receiving benefits on March 1.