Question 1

Which of the following is a provision of the Affordable Care Act?

Accepted Answer

The Affordable Care Act requires insurance plans to cover certain preventive services without cost-sharing, such as annual physical exams, mammograms, and vaccinations. Strengthening pre-existing condition exclusions and introducing annual and lifetime limits were practices that the ACA sought to eliminate. The ACA did not eliminate flexible spending accounts, but it did place a cap on how much can be contributed to them each year.

Question 2

Under older group medical expense plans,physicians were paid a fee for each covered service and were reimbursed on the basis of reasonable and customary charges,up to a maximum limit.These older group medical expense plans were called

Accepted Answer

The given description of the plan matches the definition of indemnity plans. Under these plans, the policyholder is free to choose their healthcare provider, and the insurer reimburses the reasonable and customary charges of covered services up to a maximum limit. The physician is paid a fee for each service provided, and there is no network of preferred providers or managed care protocols in place.

Question 3

Under many cafeteria plans,employees make premium contributions with pre-tax dollars.Then they use money from the salary reduction to purchase group health insurance or dental insurance.This type of cafeteria plan is called a

Accepted Answer

The plan described in the question where employees use pre-tax dollars to purchase group health or dental insurance is called a premium conversion plan. Health reimbursement arrangement plans (A) involve the employer reimbursing employees for health expenses, while full-choice plans (C) allow employees to choose from a wider range of benefits beyond just insurance. Flexible spending account plans (D) allow employees to set aside pre-tax dollars for eligible healthcare expenses, but do not specifically involve premium contributions for insurance.

Question 4

One provision of the Affordable Care Act is the creation in each state of a new and transparent marketplace where individuals and small employers can purchase affordable,qualified,health insurance plans.This marketplace is called a(n)

Accepted Answer

The provision of the Affordable Care Act mentioned in the question refers to the establishment of an insurance exchange in each state, which is a new marketplace for individuals and small employers to purchase affordable, qualified health insurance plans. Therefore, the correct answer is D, insurance exchange. A residual pool is a type of reinsurance mechanism, a catastrophic health insurance pool provides coverage for individuals with high medical costs, and a FAIR plan provides property insurance for those who cannot obtain coverage in the regular market. None of these options accurately match the description of the marketplace created by the Affordable Care Act.

Question 5

Which of the following statements regarding recent developments in employer-sponsored health plans is (are)true?
I.Preferred provider organizations (PPOs)continue to dominate group health insurance markets.
II.The number of employers offering medical benefits to workers who retire early has increased.

Accepted Answer

Preferred provider organizations (PPOs) continue to be a dominant model in group health insurance markets due to their flexibility in allowing insured individuals to choose their healthcare providers. On the other hand, the trend has been for employers to reduce or eliminate medical benefits for early retirees, primarily due to rising healthcare costs.

Question 6

Doris started a business 2 years ago.The business has been successful,and Doris is thinking about starting to offer some employee benefits for her workers.She plans to offer a group term life insurance benefit.All of the following are usual eligibility requirements for participation in a group life insurance plan EXCEPT

Accepted Answer

A 2-year probationary period is not a usual eligibility requirement for participation in a group life insurance plan. Full-time employment, being actively at work when insurance becomes effective, and applying for insurance during the eligibility period are all common eligibility requirements.

Question 7

An employer-funded plan with favorable tax advantages,which repays employees for medical care not covered by the employer's standard medical plan is a(n)

Accepted Answer

A health reimbursement arrangement (HRA) is specifically designed to reimburse employees for medical expenses not covered by their employer's standard medical plan, and it is funded by the employer. It offers tax advantages to both the employer and the employee. Option A, a 401(k) account, is a retirement plan, not a medical reimbursement plan. Option B, an individual retirement account (IRA), is also a retirement plan and not related to medical reimbursement. Option D, a flexible spending account (FSA), is a similar plan to an HRA but is funded by the employee, not the employer.

Question 8

Which of the following is a characteristic of a health maintenance organization (HMO)?

Accepted Answer

HMOs focus on cost containment by providing a network of specific healthcare providers and emphasizing preventive care to reduce overall healthcare costs.

Question 9

HMOs typically pay network physicians or medical groups a fixed annual or monthly payment for each member,regardless of the frequency or type of service provided.This payment is called a

Accepted Answer

The fixed annual or monthly payment made by HMOs to network physicians or medical groups for each member is called a capitation fee. This payment is not based on the number or type of services provided, but rather on the number of members enrolled in the plan. This payment method incentivizes providers to focus on preventive care and to avoid unnecessary or costly services.

Question 10

One type of managed care plan has a network of preferred providers.When care is needed,the member has the option to seek care in the network or to go outside the network.If care is received outside the network,the member must pay substantially higher deductibles and coinsurance.This type of managed care plan is a(n)

Accepted Answer

The description given matches that of a point-of-service (POS) plan, where members can choose to receive care from providers within a network of preferred providers or go outside the network, but would have to pay higher deductibles and coinsurance if they do so. A staff model plan refers to a type of HMO, where physicians are employed by the plan and work out of a central location. An individual practice association (IPA) plan is another type of HMO where physicians have their own individual practices but are contracted with the plan. A network model plan is a more general term that could refer to any managed care plan that has a network of providers.

Question 11

Marv is covered by a group health insurance plan at work.His employer funds the entire cost of the group health insurance.Because of this characteristic,the group health insurance plan can be described as

Accepted Answer

Since Marv's employer funds the entire cost of the group health insurance plan, it is considered noncontributory. "Defined benefit" refers to a retirement plan where the employer guarantees a certain benefit amount to the employee, while "defined contribution" refers to a retirement plan where the employer and/or employee contribute a set amount of money to the employee's retirement account. "Contributory" means that both the employer and employee contribute to the cost of the insurance plan.

Question 12

Which of the following statements is (are)true with regard to group life insurance?
I.Most group life insurance is whole life coverage.
II.Most group life insurance plans allow a modest amount of life insurance on the employee's spouse and dependent children.

Accepted Answer

Group life insurance can be both whole life and term life coverage, so statement I is not always true. However, statement II is true as most group life insurance plans allow a modest amount of coverage on the employee's spouse and dependent children.

Question 13

Many group insurers contact employers and arrange for their individual insurance producers to meet with interested employees at the workplace to conduct sales interviews.This distribution method is called a

Accepted Answer

The distribution method described is specifically targeting the workplace and involves setting up meetings with employees, which fits the definition of a worksite marketing program. The other choices are not applicable in this context.

Question 14

Nancy's employer provides an interesting employee benefit plan.Each employee is given 250 employee benefit credits to spend.A wide array of benefits is available,and the employee uses benefit credits to select the benefits that he or she wants.This type of employee benefit plan is called a(n)

Accepted Answer

This type of employee benefit plan is called a cafeteria plan, where employees are provided with a menu of benefits to choose from using a certain number of credits or dollars. The name "cafeteria plan" comes from the idea that employees can pick and choose from the menu of benefits just like they would at a cafeteria.

Quiz 16: Employee Benefits: Group Life and Health Insurance