The group that pays the largest share of health care costs in the United States is
- private insurance companies.
- private employers.
In attempting to deal with the problem of over-insurance, companies writing disability income insurance
- may charge documentation higher fees than other providers in the area.
- may include a non-cancellation provision.
- may include a facility of payment clause.
- may restrict the amount of coverage offered to individuals
Which of the following is a characteristic of Medicare Supplement policies?
- Coverage for Medicare cost-sharing features will not automatically change with Medicare deductibles and coinsurance.
- Policies cannot be guaranteed a renewal.
- Policies may not impose a waiting period on preexisting conditions.
- Policies cannot exclude preexisting conditions.
Although Social Security provides benefits in the event of a worker’s disability
- coverage qualification requirements are demanding.
- coverage is provided for disabilities that are short-term only.
- coverage is subject to a one-week waiting period.
- coverage decreases based on the number of work-related claims.
Which of the following types of pension plans are employers required to insure with the Pension Benefit Guarantee Corporation?
- Defined benefit plans
- Defined benefit and defined contribution plans
- Single employer plans
- Defined contribution plans
A business valued at $600,000 has four partners. If each partner buys $50,000 of life insurance on each of the other partners, this arrangement is known as
- a shared interest plan.
- an insurable interest plan.
- an entity plan.
- a cross-purchase plan.
The beneficiary under key person life insurance normally is the
- the employer.
- estate of the insured.
- key person.
- key person’s spouse.
The change of occupation provision used in individual health insurance contracts
- is one of the mandatory uniform provisions.
- forbids the changing of occupations.
- provides for a return of premium if a new occupation is less hazardous and an adjustment of benefits if it is more hazardous.
- forbids the changing of occupations.
When a deposit administration plan is used to fund a qualified retirement plan
- a single premium annuity is purchased for each worker at retirement.
- the insurer guarantees the adequacy of funds to meet accrued liabilities.
- the insurer guarantees the benefits to retired workers for whom annuities have been purchased.
- contributions are not allocated to specific workers until they retire.
Medicare Advantage
- is intended to increase Medicare costs and coverage.
- is an attempt reduce Medicaid market competition.
- brought uniformity to Medicare prescription drug coverage plans and coverage.
- has been referred to as the “privatization of Medicare”.
A preferred provider organization
- is a group of health care providers designated by an employer or insurer.
- usually charges higher fees than other providers in the area.
- is a health insurer selected by a group of physicians.
- is an insurer approved by the state commissioner of insurance.
Fee-for-service health insurance coverage
- is not subject to regulation.
- is of increasing in importance.
- is being replaced by managed care plans.
- has been in beneficial outcomes such as the overutilization of health care.
From the perspective of the subscriber, a major disadvantage of health maintenance organizations is
- the absence of a gatekeeper.
- the inability to use providers outside the system except in emergencies.
- the absence of coverage for outpatient services.
- are not subject to regulation.
As a result of the U.S. Supreme Court decision in John Hancock Mutual Life Insurance Company v. Harris Trust & Savings Bank (Harris Trust)
- the court ruled all funds held by Hancock in connection with the general account group policy issued to Harris Trust should be treated as assets for ERISA purposes.
- insurer pension funding products were not redesigned.
- insurer pension funding arrangements are all exempt from ERISA fiduciary requirements.
- general account assets of insurers can sometimes be treated as pension assets.
Consumer-driven health care
- encourages preventive care.
- limits out-of-pocket costs to relatively low levels.
- is evident in the design of high deductible health plans and health savings accounts.
- relies on insurers to control utilization and costs.
The beneficiary under a split-dollar life insurance policy normally is the
- the estate of the insured.
- the key employee’s spouse.
- the employer.
- the key employee’s beneficiary and the employer to the extent of their interests.
The elimination period in disability income contracts performs the same function as
- a facility of payment clause.
- a waiver of premium clause.
- an incontestable clause.
- a deductible.
An approach an employer could use to de-risk its pension plan includes
- continuing to offering traditional pension plans to employees.
- an increase in exposure to risky equities in pension portfolios.
- a refusal to consider pension buy-out offers.
- a longevity swap.
The group that pays the largest share of health care costs in the United States is
- private employers.
- private insurance companies.
Disability income insurance
- is sold only on a group basis.
- should be purchased with as short a waiting period as possible.
- is less important than life insurance because the probability of death at most ages is greater.
- is often overlooked in income protection planning.
The major difference between noncancelable health insurance contracts and guaranteed renewable contracts is that
- noncancelable policies cannot be cancelled in mid-term.
- noncancelable policies are not guaranteed renewable.
- total disability benefits are more liberal.
- the premium for noncancelable policies cannot be changed.
Long-term care partnership programs
- allow individuals to protect some of their assets from Medicaid spend-down requirements.
- must provide more generous benefits than TQ-LTCI.
- have demonstrated an ability to reduce Medicaid costs over the long-term.
- must include inflation protection in all policies.
Under a basic split‑dollar insurance plan the employer pays:
- the part of the premium equal to the increase in cash value during the policy year.
- one‑half of all premiums due.
- the portion of the premium equal to the cost of the decreasing term insurance for the policy year.
The capitation approach to charging for health care benefits is characteristic of
- preferred provider organizations.
- Blue Cross and Blue Shield organizations.
- point of service plans.
- health maintenance organization.
Which of the following is true with respect to State Children’s Health Insurance Programs?
- States receive federal funding to support the programs.
- They were created to insure children that qualify for Medicaid.
- Coverage also extends to the guardians of the insured child.
- Eligibility requirements vary by state.
The Medicaid program
- has uniform national eligibility requirements established by the federal government.
- is completely funded by the federal government.
- is completely funded by the state government.
- is a federal-state program that provides medical assistance to low-income individuals.
The Social Insurance Supplement Benefit
- permits one to coordinate disability insurance with social security benefits.
- is a mandatory provision under most state laws.
- is designed for those occupations not covered by OASDI.
- is designed to cover the five-month waiting period under Social Security.
When a physician refuses to accept assignment under Medicare
- the beneficiary may have additional out-of-pocket expenses.
- he or she is barred from participating in Medicare for two years.
- neither the physician nor the beneficiary can collect from Medicare.
- there is no limit on the amount the physician may charge a Medicare beneficiary.
Which of the following is true with respect to Medicare Prescription Drug Coverage?
- It brought uniformity to Medicare prescription drug coverage plans and coverage.
- It offered only as a stand-alone Prescription Drug Plan.
- It is offered as part of a Medicare Advantage Plan only.
- It may be offered as part of a Medicare Advantage Plan or through a stand-alone Prescription Drug Plan.
The part of Medicare that is designed to pay for hospital expenses, but excludes physician’s charges is
- Medicare Part B.
- Medicare Part A.
- Medicare Part D.
- Medicare Part C.
Under a health savings account
- contributions by individuals are tax deductible up to a limit.
- distributions for medical expenses are nontaxable to the extent they exceed contributions.
- investment income is taxable on an annual basis.
- distributions to pay qualified medical expenses are taxable as income, but deductible as medical expenses to the extent that they exceed 7.5% of adjusted gross income.
The Pension Protection Act of 2006
- was enacted in response to concerns about the funding status of defined benefit pension plans and PBGC losses.
- decreased PBGC premiums.
- requires employers to amortize their unfunded liabilities over a longer period than before.
- disallows direct deposit of income tax refunds from the IRS into an IRA.
A disability income insurance policy on which premiums are paid weekly must have a grace period of at least
- ten days.
- thirty-one days.
- there is no grace period on weekly premium policies.
- seven days.
Health Maintenance Organizations differ from commercial insurers in that they
- also provide health care.
- operate in the same manner as Blue Cross Organizations.
- are not subject to regulation.
- are owned by the participating subscribers.
Benefits paid under tax-qualified long-term care insurance
- are taxable as income unless paid by as part of an employee benefit plan.
- are exempt from federal income tax.
- are taxable as income, but deductible as medical expenses.
- are excludable from taxable income up to a specified daily limit or up to the costs actually incurred for long-term care.
The chance of being disabled is
- less than the chance of death at any age.
- less than the chance of death during middle ages.
- greater than the chance of death during working years.
- about the same as the chance of death.
Which of the following is an option under Medicare Advantage?
- Long-term care coverage
- Private free-for-service plans
- Short-term care coverage
- Nonpreferred provider organizations
An arrangement under which an employee and employer share the premium cost of an insurance policy on the life of the employee is called a
- deferred compensation plan.
- split-dollar plan.
- shared interest agreement.
- cross-purchase agreement.
When home care benefits are included in a long-term care insurance policy
- home care benefits are usually subject to a requirement that the insured was previously confined in a skilled nursing facility.
- coverage may also include personal care services like bathing, dressing, and grooming.
- coverage applies only to home care workers certified by Medicare.
- home care benefits are provided only if the insured has been hospitalized.
The Residual Disability Benefit used in some disability income contracts
- typically pays benefits for a six-month period.
- provides a monthly indemnity equal to one-half the total disability benefit.
- determines indemnity based on the percentage of income lost.
- typically pays benefits for a six-month period.