Chapter 1: Health And Accident Insurance

35 Questions | Total Attempts: 43

SettingsSettingsSettings
Please wait...
Chapter 1: Health And Accident Insurance

South Carolina Pre-licensing Education - Life and Health Insurance


Questions and Answers
  • 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. 

      45

    • B. 

      63

    • C. 

      75

    • D. 

      90

  • 2. 
    Group health plans may deny participation based upon the
    • A. 

      Member's claims history

    • B. 

      Member's current age

    • C. 

      Member's pre-existing condition

    • D. 

      Member' part-time employment status

  • 3. 
    How many employees must an employer have for a terminated employee to be eligible for COBRA?
    • A. 

      20

    • B. 

      30

    • C. 

      40

    • D. 

      50

  • 4. 
    Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
    • A. 

      It would be considered taxable income to the employee

    • B. 

      The employee would not be allowed to an HSA

    • C. 

      The employer would pay payroll tax and FICA on the contribution amount

    • D. 

      The employer would not be allowed to deduct the contribution from the employee's pay

  • 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. 

      April 1

    • B. 

      April 6

    • C. 

      May 15

    • D. 

      May 30

  • 6. 
    Credit Accident and Health plans are designed to
    • A. 

      Permit creditors the ability to require that coverage be purchased through insurers of their choice

    • B. 

      Provide permanent protection

    • C. 

      Help pay off existing loans during periods of disability

    • D. 

      Not permit free choice of coverage selection

  • 7. 
    What is the contract called that is issued to an employer for a Group Medical Insurance Plan?
    • A. 

      Master policy

    • B. 

      Certificate of coverage

    • C. 

      Provisional policy

    • D. 

      Document of coverage

  • 8. 
    Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must
    • A. 

      Be less extensive and premium cannot exceed 102%

    • B. 

      Be the same and the premium cannot exceed 102%

    • C. 

      Be more extensive and the premium cannot exceed 102%

    • D. 

      Be the same as well as the premium

  • 9. 
    Which of the following would evidence ownership in a participating health insurance contract?
    • A. 

      Stock ownership

    • B. 

      Irrevocable beneficiary status

    • C. 

      Policy ownership

    • D. 

      Collateral assignment

  • 10. 
    An employer is issued a group medical insurance policy. This single contract is known as a(n)
    • A. 

      Entire contract

    • B. 

      Master policy

    • C. 

      Certificate of coverage

    • D. 

      Employer contract

  • 11. 
    Under group health insurance, a certificate of coverage is issued to the
    • A. 

      Employer

    • B. 

      Employee

    • C. 

      Producer

    • D. 

      Sponsor

  • 12. 
    Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?
    • A. 

      Presumptive disability provision

    • B. 

      Absolute accidental provision

    • C. 

      Accidental death benefit provision

    • D. 

      Accidental bodily injury provision

  • 13. 
    Health insurance involves two perils, accident and (blank).
    • A. 

      Death

    • B. 

      Sickness

    • C. 

      Disability

    • D. 

      Liability

  • 14. 
    Health insurance will typically cover which of the following perils?
    • A. 

      Death due to illness

    • B. 

      Injury due to accident

    • C. 

      Death due to accident

    • D. 

      Dismemberment

  • 15. 
    Which of the following does Coordination of Benefits allow?
    • A. 

      Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid

    • B. 

      Allows both a group health plan and individual health plan to coordinate their benefit payments

    • C. 

      Allows the deductible to be spread out between all the health providers

    • D. 

      Allows each health provider to pay 100% of the claim

  • 16. 
    The purpose of the Coordination of Benefits provision in group accident and health plans is to
    • A. 

      Avoid overpayment of claims

    • B. 

      Reduce out-of-pocket costs

    • C. 

      Reduce adverse selection

    • D. 

      Lower the cost of premiums

  • 17. 
    Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
    • A. 

      Costs that exceed 7 1/2 % of AGI

    • B. 

      Costs that exceed 10% of AGI

    • C. 

      100% of costs

    • D. 

      No deduction permitted

  • 18. 
    A person covered with an individual health plan
    • A. 

      Is issued a policy

    • B. 

      Is issued a certificate of medical costs

    • C. 

      Does not contract directly with the insurance company

    • D. 

      Is not subject to medical underwriting

  • 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. 

      Is eligible for coverage upon hire

    • B. 

      Must wait 360 days to be eligible for coverage

    • C. 

      Must continue coverage with the previous employer

    • D. 

      Is eligible for only health insurance, not life or dental insurance

  • 20. 
    When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)?
    • A. 

      When a change of management has occurred within the group

    • B. 

      When the annual number of claims has increased by 25%

    • C. 

      When contribution or participation rules have been violated

    • D. 

      When group participation has increased by 25%

  • 21. 
    An insurer has the right to recover payment made to the insured from the negligent party. These rights are called
    • A. 

      Contributory

    • B. 

      Indemnity

    • C. 

      Estoppel

    • D. 

      Subrogation

  • 22. 
    Which of the following decisions would a Health Savings Account (HSA)owner NOT be able to make?
    • A. 

      The amount contributed by the employer

    • B. 

      The amount contributed by the owner

    • C. 

      The underlying account investments used

    • D. 

      The medical expenses paid for by the HSA

  • 23. 
    In an employer-sponsored group accident and health plan, a master contract is issued to the
    • A. 

      TPA

    • B. 

      Employees

    • C. 

      Adminstrative Services Organization

    • 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. 

      Employee has no tax liability

    • B. 

      40% of the benefit

    • C. 

      60% of the benefit

    • D. 

      100% of the benefit

  • 25. 
    A common exclusion with Vision plans is
    • A. 

      Eyeglass frames

    • B. 

      The examination

    • C. 

      Contact lenses

    • D. 

      Lasik surgery

  • 26. 
    Which of the following is typically NOT eligible for coverage in a group health policy?
    • A. 

      Full-time employee

    • B. 

      Temporary employee

    • C. 

      Business owner

    • D. 

      Partner in a partnership

  • 27. 
    Which of the following is INELIGIBLE to participate in a Section 125 Plan?
    • A. 

      Key Employee in a C-Corp

    • B. 

      Highly Compensated Employee in an S-Corp

    • C. 

      An C-Corp Owner with a greater than 2% share

    • D. 

      An S-Corp Owner with a greater than 2% share

  • 28. 
    Key Person Disability Insurance pays benefits to the
    • A. 

      Hospital

    • B. 

      Employee

    • C. 

      Employer

    • D. 

      Employee's creditors

  • 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. 

      Partially taxable income

    • B. 

      Non-taxable income

    • C. 

      Taxable income

    • D. 

      Conditionally taxable income

  • 30. 
    The limited period of time given to all members to sign up for a group health plan is called the
    • A. 

      Enlistment period

    • B. 

      Sign-up period

    • C. 

      Probationary period

    • 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. 

      He's not eligible for Medicare

    • B. 

      His group health plan and Medicare pay 50/50

    • C. 

      Medicare is the secondary payer

    • D. 

      Medicare is the primary payer

  • 32. 
    Which of the following would be considered a possible applicant and contract policyholder for group health benefits?
    • A. 

      Human resource department

    • B. 

      Employer

    • C. 

      Insured employee

    • D. 

      Insurance company

  • 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. 

      $100

    • B. 

      $250

    • C. 

      $500

    • D. 

      $1,000

  • 34. 
    Continued coverage under COBRA would be provided to all of the following EXCEPT:
    • A. 

      Former dependent of employee no longer of dependent status

    • B. 

      Terminated employee

    • C. 

      Divorced spouse of employee

    • 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. 

      Disability overhead policy

    • B. 

      Business continuation policy

    • C. 

      Disability buy-sell policy

    • D. 

      Business overhead expense policy