Medical Expense Insurance Practice Exam Questions and Answers

Medical Expense Insurance Practice Exam Questions and Answers What is the period of coverage for events such as death or divorce under COBRA? - ANSWER 36 months Who determines the eligibility and contribution limits of an HRA? - ANSWER The employer Health Reimbursement Accounts (HRAs) - ANSWER Plans that allow employers to set aside funds for reimbursing employees for qualified medical expenses. Are open to employees of companies of all sizes; however, the employer determines eligibility and contribution limits. An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? - ANSWER They are tax deductible. Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? - ANSWER Principal Sum Accidental Death and Dismemberment Coverage - ANSWER Only pays for accidental losses and is thus considered a pure form of accident insurance. The principal sum is paid for accidental death. In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy, often referred to as the capital sum. When an insured incurs medical expenses during the last 90 days of a calendar year, the Carry-Over Provision allows them to - ANSWER Apply such expenses to the new year's deductible. What is the typical deductible for basic surgical expense insurance? - ANSWER $0 As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited. To be eligible for a Health Savings Account, an individual must be covered by a - ANSWER High-deductible health plan. Who determines the eligibility and contribution limits in a HRA? - ANSWER The employer determines both What is a penalty tax for nonqualified distributions from a medical savings account? - ANSWER 20% If a distribution is made for a reason other than to pay for qualified medical expenses, the amount withdrawn will be subject to an income tax and an additional 20% tax. Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within - ANSWER 90 days. HIPAA applies to groups of - ANSWER 2 or more An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage? - ANSWER $102 The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs. As it pertains to group health insurance, COBRA stipulates that - ANSWER Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.