Group Health

Front 1

Under the COBRA rules for employer group health insurance, which of the following statements is CORRECT?

* A) Coverage may be continued for up to 18 months for a qualified beneficiary and 36 months for a terminated employee.
* B) Coverage may be continued for up to 36 months for both a qualified beneficiary and a terminated employee.
* C) Coverage may be continued for up to 18 months for both a qualified beneficiary and a terminated employee.
* D) Coverage may be continued for up to 36 months for a qualified beneficiary and 18 months for a terminated employee.

Back 1

D

Continued coverage differs for the primary insured and beneficiaries. A qualified beneficiary such as a spouse may continue benefits under COBRA for no more than 36 months, whereas a terminated employee may continue coverage for no more than 18 months.

Front 2

Maria is covered as a dependent under her mother's employer-sponsored group health insurance plan. Which of the following events will NOT end her participation in the plan?

* A) Her mother leaves her job and converts her insurance to an individual policy.
* B) She moves out on her own and gets a full-time job.
* C) She gets married.
* D) She reaches the specified age that no longer qualifies her as a dependent.

Back 2

A

Under an employee's conversion rights, eligible dependents are also covered under the new, individual policy. Her eligibility will cease, however, if Maria gets married, is no longer a dependent, or no longer qualifies as a dependent due to age.

Front 3

Which of the following was the primary purpose of the Health Insurance Portability and Accountability Act of 1996 (HIPAA)?

* A) To provide government subsidies for indigents' insurance.
* B) To establish government benefits for otherwise uninsurable individuals.
* C) To expand coverage eligibility to many uninsureds.
* D) To require employers to provide medical coverage for all employees.

Back 3

C

HIPAA was sweeping legislation that expanded eligibility for coverage among many Americans. It also allowed individuals to continue their group health care coverage when leaving an employer.

Front 4

Brian, who has a preexisting medical condition, had been covered under his previous employer's group medical plan for the last five years and is now changing jobs. Under his new employer's insurance plan, which of the following is CORRECT?

* A) He will have to wait 18 months to be eligible under his new employer's plan.
* B) He will have to wait 12 months to be eligible under his new employer's plan.
* C) Based on his past, creditable coverage, there will be no waiting period based on his preexisting condition.
* D) He will have to wait 63 days to be eligible under his new employer's plan.

Back 4

C

Under HIPAA rules, Brian's coverage from his previous employer is fully portable. His previous employer must provide a creditable coverage certificate stating that he has been fully covered for the last five years. Since he would receive one month of creditable coverage for each month of continuous previous coverage, he will be eligible for coverage under the new plan immediately.

Front 5

Which of the following statements regarding an employee's conversion privilege under a group health insurance policy is CORRECT?

* A) He can convert his coverage to a policy through the same insurer that insures the group.
* B) He can convert his coverage within six months of leaving the group.
* C) He can convert his coverage while still an employee.
* D) He can be denied coverage if he is uninsurable at the time of conversion.

Back 5

A

An employee is guaranteed the right to convert coverage to an individual policy through the same insurer that underwrites the group. He cannot be denied the right to conversion even if he has become uninsurable. He can no longer be part of the group to exercise this option. If he leaves the group, he must exercise his right within a limited period, usually one month. During that time, he remains insured under the group plan.

Front 6

All of the following are characteristics of group health insurance plans EXCEPT:

* A) the cost of insuring an individual is less than what would be charged for comparable benefits under an individual plan.
* B) their benefits are more extensive than those under individual plans.
* C) the parties to a group health contract are the employer and the employees.
* D) employers may require employees to contribute to the premium payments.

Back 6

C

The contract for coverage is between the insurance company and the employer, and a master policy is issued to the employer.

Front 7

Which of the following laws prohibits highly paid employees from receiving disproportionate benefits in qualified group health insurance plans?

* A) HIPAA.
* B) COBRA.
* C) Women's Health and Cancer Rights Act.
* D) ERISA.

Back 7

D

ERISA, the Employee Retirement Income Security Act of 1974, established minimum standards for pension and health care plans offered in private industry. It prohibits highly paid employees from receiving disproportionate benefit levels

Front 8

In regards to HIPAA, which of the following statements is NOT correct?

* A) If the new employee has gone without health insurance for more than 63 days between jobs, the waiting period for preexisting conditions can be reinstated.
* B) Group plans can impose more than a 12-month preexisting condition exclusion for a person who sought medical advice, diagnosis, or treatment within the previous 6 months.
* C) For full health coverage to be immediately available to a new employee, that person must have had continuous prior coverage for a period of at least 18 months.
* D) This law makes it easier for individuals to change jobs and still maintain continuous health coverage.

Back 8

B

Under HIPAA, group plans CANNOT impose more than a 12-month preexisting condition exclusion for a person who sought medical advice, diagnosis, or treatment within the previous 6 months. This 12-month preexisting condition exclusion cannot be applied, however, in the case of newborns, adopted children or pregnancies existing on the effective date of coverage.

Front 9

Suppose an employee recently has been divorced. His 56-year-old spouse wants to know if she can maintain coverage under the employee's group medical insurance plan. Which of the following statements best describes how this situation might be treated?

* A) She would no longer qualify for coverage under the employee's group medical plan because she no longer is a dependent.
* B) She would be able to continue coverage until age 65 by paying up to 102% of the premium required for the group coverage.
* C) She would be able to qualify for coverage under an individual policy, provided she submits to individual underwriting and pays a premium commensurate with her risk.
* D) She would be able to continue coverage, for up to 3 years, by paying up to 102% of the premium required for the group coverage.

Back 9

D

If the employee's spouse becomes ineligible for coverage under the medical policy because of divorce, the employer must offer coverage to the ex-spouse for up to three years, provided she notifies the employer within 30 days of her intent to continue coverage. She must also pay up to 102% of the applicable premium for the coverage.

Front 10

Under HIPAA regulations, a health insurer can refuse to renew coverage for all of the following reasons EXCEPT:

* A) the employer failed to pay premiums in a timely manner.
* B) the employer excluded certain group members in a contributory plan.
* C) the employer denied an employee's entry into the plan based on evidence of uninsurability.
* D) the employer required new group members to wait 6 months before entry to the plan based on pre-existing conditions.

Back 10

D

Reducing the maximum waiting period for eligibility for new hires from 12 to six months is not a violation of HIPAA rules. An insurer can refuse to renew coverage for violation of participation or contribution rules, for discriminating based on insurability or for failure to pay premiums.

Front 11

All of the following statements pertaining to the conversion privilege in group health insurance policies are correct EXCEPT:

* A) some states specify minimum benefits for conversion policies.
* B) an insured who is terminated from the plan can obtain a conversion policy without evidence of insurability within a specified time.
* C) a conversion privilege applies when a group health policy is terminated.
* D) insureds who resign or are terminated have 365 days in which to convert their coverage to individual policies.

Back 11

D

Concerning the conversion privilege in group health insurance, an insured employee who resigns or is terminated has 31 days in which to take out a conversion policy without having to show evidence of insurability.

Front 12

For group health insurance, employees may be classified in all of the following ways EXCEPT by:

* A) duties.
* B) age.
* C) type of payroll.
* D) length of service.

Back 12

B

Group health insurance participants may be classified by type of payroll, duties and length of service, but not by age.

Front 13

Which of the following workers are protected under the Age Discrimination in Employment Act?

* A) Those over age 40.
* B) Those over age 62.
* C) Those over age 65.
* D) Those over age 55.

Back 13

A

Under the Age Discrimination in Employment Act (ADEA), employers cannot discriminate against or give preference to employees age 40 or older.

Front 14

Which of the following statements regarding coverage of a spouse under an employer-sponsored group health insurance plan is CORRECT?

* A) The spouse becomes eligible after the employee has been covered for 31 days.
* B) The spouse becomes eligible at the first open enrollment period after coverage of the employee begins.
* C) The spouse becomes eligible during open enrollment periods if coverage was initially declined.
* D) The spouse becomes eligible at the time the employee is covered, with proof of insurability.

Back 14

C

If the spouse declines coverage after 31 days of becoming eligible, future coverage is available only during open enrollment periods or when proof of insurability is provided. Otherwise, dependents become eligible at the same time coverage is provided to the employee. Proof of insurability at the time of initial eligibility may or may not be required under the plan.

Front 15

The Age Discrimination in Employment Act prohibits employers from discriminating against employees who are at least how old?

* A) 50 years old.
* B) 45 years old.
* C) 40 years old.
* D) 55 years old.

Back 15

C

The Age Discrimination in Employment Act prohibits employers from discriminating against or giving preference to employees who are 40 years old or older. For instance, an employer may not reject a job applicant solely on the basis of age if the applicant is at least 40 years old.

Front 16

As it pertains to group health insurance, COBRA stipulates that:

* A) group coverage must be extended for terminated employees up to a certain period of time at the employer's expense.
* B) terminated employees must be allowed to convert their group coverage to individual policies.
* C) retiring employees must be allowed to convert their group coverage to individual policies.
* D) group coverage must be extended for terminated employees up to a certain period of time at the employee's expense.

Back 16

D

COBRA requires employers with 20 or more employees to continue group medical expense coverage for terminated workers (as well as their spouses, divorced spouses and dependent children) for up to 18 months (or 36 months, in some situations) following termination. However, the terminated employee can be required to pay the premium, which may be up to 102% of the premium that would otherwise be charged.

Front 17

What was the effect of the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA) on group health insurance plans?

* A) It allows a group insurance participant to convert her coverage to an individual plan in the event of employment termination.
* B) It requires any group health plan then in operation to cover all employees, without regard to years of service.
* C) It provides tax deductibility for the cost of group health insurance coverage.
* D) It mandates that group health insurance coverage be extended for terminated employees for up to a specified period.

Back 17

D

COBRA, which became law in 1985, requires employers with 20 or more employees to continue group medical expense coverage for terminated employees (as well as their spouses, ex-spouses, and dependent children) for up to 18 to 36 months, depending on the event that led to the former employee's termination from the group plan. The cost of the continued coverage is borne by the former employee, not by the employer.

Front 18

Under COBRA regulations, group health coverage of terminated employees must be continued up to:

* A) 6 months.
* B) 18 months.
* C) 12 months.
* D) 8 months.

Back 18

B

Front 19

Which of the following statements about creditable coverage in group health insurance plans under HIPAA rules is NOT correct?

* A) One month of creditable coverage counts toward one month of preexisting waiting period with a new employer.
* B) To receive creditable coverage, there must be no significant break in coverage of 63 days or more.
* C) Regardless of creditable coverage, the preexisting waiting period can be no longer than six months.
* D) Previous employers must issue certificates of creditable coverage upon request.

Back 19

C

Under HIPAA, a group plan can deny coverage for preexisting conditions for no longer than 12 months (18 months for late enrollees). One month of creditable coverage reduces waiting periods with the new plan by one month.

Front 20

Jasmine is covered under her employer's health plan. She is called to active military duty. Upon her return, which of the following statements regarding her coverage is CORRECT?

* A) She will not be covered because she receives veteran's benefits.
* B) She will be fully covered, without the need to provide proof of insurability.
* C) She must reapply for coverage in the group at the next open enrollment period.
* D) She will be conditionally covered for up to 2 years.

Back 20

B

Upon her release from military service, she can be readmitted to the group upon her return to work without the need to provide proof of insurability. However, as long as she is on active military duty, she is not covered under her group plan.

Front 21

When an employee's coverage terminates under a group health policy, the employee must be offered continuation coverage for:

* A) 365 days.
* B) 18 months.
* C) 180 days.
* D) 60 days.

Back 21

B

All group health policies issued or renewed must offer eligible employees the opportunity to continue coverage under the health policy for 18 months after termination of employment or until the employee is eligible for other group coverage, whichever occurs first.

Front 22

An insurer providing group health coverage may NOT be required to issue a converted policy to anyone covered by:

* A) a major medical expense policy.
* B) Medicare.
* C) surgical policy.
* D) medical expense policy.

Back 22

B

Conversion privileges do not apply to those persons covered by Medicare, but do apply to anyone covered by a hospital, surgical, medical, or major medical expense policy.

Front 23

Which of the following businesses need NOT provide maternity benefits through its group medical expense insurance plan?

* A) A company with fewer than 15 employees.
* B) A company with fewer than 20 employees.
* C) A company with a predominately young, female staff that files an exclusion petition with the Department of Labor.
* D) There are no exceptions. All group plan sponsors must provide maternity benefits.

Back 23

A

Groups with fewer than 15 members need not offer maternity benefits. All others must provide maternity benefits as part of their medical expense coverage.

Front 24

Individual health insurance policies are typically written on which basis?

* A) Nonparticipating.
* B) Experience rated.
* C) Claims rated.
* D) Participating.

Back 24

A

Health insurance policies may be written on either a participating or nonparticipating basis. Most individual health insurance is issued on a nonparticipating basis. Group health insurance, however, is generally participating and provides for dividends or experience rating.

Front 25

Which one of the following statements about the Consolidated Omnibus Budget Reconciliation Act of 1985 is NOT correct?

* A) The maximum duration of coverage for a deceased employee's dependents is 36 months.
* B) The employer must provide the terminated employee with a 60-day period in which to exercise any option under COBRA.
* C) The terminated employee must pay the group premium to the insurer within a 60-day grace period.
* D) COBRA legislation does not apply if the employer has fewer than 20 employees.

Back 25

C

COBRA requires that upon death, divorce, or employment termination, an employer must provide a 60-day period during which the employee and his dependents may continue group health insurance coverage at the participant's own expense. However, COBRA does not apply if the employer has fewer than 20 employees. The maximum duration of continued coverage is 18 months for terminated employees and 36 months for eligible dependents of a deceased employee. Coverage can end if a participant fails to pay the appropriate premium within a 30-day grace period of the premium due date.

Front 26

All of the following group health coverages include a conversion privilege EXCEPT:

* A) Comprehensive medical expense.
* B) Accidental death and dismemberment.
* C) Basic medical expense.
* D) Disability income.

Back 26

B

Group basic medical expense, comprehensive medical expense, and disability income insurance typically include a conversion privilege. This allows the insureds to convert their group certificates to individual policies when they leave an employer. Group AD&D policies, however, do not contain a conversion privilege.

Front 27

Under COBRA regulations, a qualified beneficiary (such as a spouse) may be able to continue receiving benefits for up to:

* A) 12 months.
* B) 36 months.
* C) 18 months.
* D) 6 months.

Back 27

B

COBRA beneficiaries generally are eligible for group coverage during a maximum of 18 months for qualifying events due to employment termination or reduction of hours of work. However, certain qualifying events, or a second qualifying event during the intial period of coverage, may permit a beneficiary to receive a maximum of 36 months of coverage.

Front 28

All of the following statements regarding an insured's right to continue health insurance coverage under a group plan after leaving the plan are true EXCEPT:

* A) the converted policy must cover all members of the insured's family who were covered under the group plan.
* B) the insured is individually responsible for paying the premium for his or her coverage.
* C) converted coverage is automatically put into effect unless the insured rejects it in writing.
* D) the insured is not required to provide evidence of insurability.

Back 28

C

The insured must apply in writing for the converted policy and pay the first premium within 31 days of termination of the first plan.

Front 29

After working 2 years with a competitor, Bob immediately goes to work for ABC Company. Having been fully covered under his employer's group disability income plan, Bob enrolls in his new employer's plan at his first opportunity to do so. As a new employee with ABC, when does the exclusion period for preexisting conditions end?

* A) It ends after no more than 12 months.
* B) It ends only after he has provided proof of insurability.
* C) It ends after no more than 18 months.
* D) There is no exclusion period.

Back 29

D

Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), exclusion periods for preexisting conditions must be reduced by one month for every month an employee had creditable coverage at a previous job. Since Bob enrolled as soon as possible in the new employer's plan, the maximum preexisting condition exclusion period under HIPAA would be 12 months. However, since Bob's break in coverage was less than 63 days, he has 24 months (2 years) of creditable coverage from his previous employer that would be credited, so he would not have a preexisting condition exclusion period with his new plan.

Front 30

The purpose of health experience tables is to:

* A) provide an insurer with a record of all its insureds' medical histories.
* B) indicate a health insurance applicant's chances of incurring a disability or illness, based on his or her past health experience.
* C) allow an insurer to estimate the costs of future health claims by providing it with a record of average hospital, surgical, and medical costs.
* D) provide an insurer with a history of health claims submitted for a given geographical area.

Back 30

C

The purpose of health experience tables is to enable insurers to estimate the average amounts of future health insurance claims by providing average costs of hospital, surgical, and medical expenses. These tables are adjusted periodically to reflect the most recent experience.

Front 31

Under COBRA regulations, which of the following statements regarding coverage of a spouse after divorce from an insured employee is CORRECT?

* A) The divorced spouse's coverage can be converted to an individual policy.
* B) The divorced spouse's coverage can be continued with an increase in coinsurance and deductible.
* C) The divorced spouse's coverage can be continued with identical benefits for a specified period.
* D) All coverage ends at the time of the divorce.

Back 31

C

Under COBRA, divorce is a qualifying event, and the divorced spouse can continue coverage identical to that provided before the divorce, for up to 36 months. It may be possible for the spouse to convert the policy, but that is not a COBRA requirement. Although premiums may be increased, the terms of the coverage-including coinsurance and deductible-must remain the same.

Front 32

Scott is an employee who recently joined the business and, because of a preexisting health problem, did not realize he could enroll in the company's health plan. He now wishes to join. Which of the following statements about his eligibility under HIPAA rules is CORRECT?

* A) He can be denied coverage until he can provide proof of insurability.
* B) As a late enrollee, he may have to wait up to 18 months before he can be covered.
* C) As a late enrollee, he may have to wait up to 12 months.
* D) He must be eligible immediately.

Back 32

B

Under HIPAA rules, Scott can be denied coverage for up to 18 months as a late enrollee. Coverage cannot be denied beyond that point based on his preexisting health condition.

Front 33

An employee is eligible to continue his health insurance under COBRA rules. Which of the following statements is CORRECT?

* A) He can continue the coverage for up to 36 months, even if he obtains new coverage elsewhere.
* B) His coverage under COBRA will be identical to that which he had under his group plan.
* C) He can increase the benefits he will receive from his plan up to 102% of his previous coverage.
* D) His coverage can be continued even if the employer terminates the entire health plan.

Back 33

B

An eligible employee is entitled to coverage that is identical to his previous plan. Under COBRA rules, his coverage will be terminated if he obtains insurance elsewhere. To be insured under 2 policies will violate the prohibition on gain without loss and will result in overinsurance. The actual coverage will be the same as his original plan, but the premium may be increased up to 102% of the previous rate. Coverage will end if the entire plan is terminated.

Front 34

Which of the following statements regarding experience versus community rating by group health insurance plans is CORRECT?

* A) Experience rating is based on past and projected medical costs of the group.
* B) Community rating is more cost effective and competitive.
* C) Premiums for group insurance are typically not based on experience rating.
* D) Community rating takes the group's previous claims experience into account.

Back 34

a

Experience rating is based on the actual loss experience of the group and is generally more cost effective than community rating. Community rating is based on the average charge for insurance among all insureds in a community. It does not take into consideration the difference in risk among insureds. With community rating, the same rate structure is used for all subscribers, regardless of their past or potential loss experience. Premiums for group insurance are typically based on experience rating.

Front 35

What happens if a person insured under a group accident and sickness insurance policy dies?

* A) The death proceeds must be paid to the insured's beneficiary, if there is one.
* B) Death proceeds must be paid to the group policyholder.
* C) The proceeds revert to the insurer.
* D) Death proceeds are never paid under accident and health insurance policies.

Back 35

A

Benefits payable for the insured's death are paid to the designated beneficiary or assignee of the insured. If none exist, the benefits are paid to the insured's estate. Death benefits are never paid to the group policyholder or to the insurer.