Certified Employee Benefit Specialist Group Benefits
Associate 2 (CEBS GBA) Exam Questions and
Answers
Benefits of STD group policies - ANSWER>>Ensures that experienced professionals
are managing claims, gives access to return-to-work support and fraud-prevention
services, and locks in a fixed amount of monthly financial obligation (premiums)
regardless of the disability benefits being paid.
The law of large numbers states that: - ANSWER>>As the size of the same
increases, the sample mean gets closer to the population mean.
Indemnification - ANSWER>>Indemnification of losses means reimbursement to
the insured if a loss occurs. In theory, indemnification restores the individual to
their preexisting state had the loss not occurred.
Adverse Selection - ANSWER>>Occurs because individuals and businesses that are
more likely to have claims are more inclined to purchase insurance than those
that are less likely to have claims. This exists because individuals know more
about their health status than do insurers.
Moral Hazard - ANSWER>>Premise that payments are made only for random
losses which creates moral hazard. Moral hazard is faced by insurers because
individuals are more likely to use unneeded health services when they are not
paying the full cost of those services.
Coinsurance - ANSWER>>A type of insurance in which the insured pays a share of
the payment made against a claim in excess of the deductible.
,Third-Party Payers - ANSWER>>Generic term for any outside party, insurance
company or a government program, which pays for part or all of a patient's health
care services. Health insurers can be categorized into two broad groupings:
private insurers and public programs.
Medicare - ANSWER>>A federal program of health insurance established by
Congress in 1965 to provide medical benefits to persons 65 years of age and
older. Also covers health care costs associated with selected disabilities and
illnesses, regardless of age.
Medicaid - ANSWER>>Began in 1966. A federal and state assistance program that
pays for health care services for people who cannot afford them. Mandatory
nursing home benefit added in 1972.
Four Characteristics of Insurance - ANSWER>>1. Pooling of losses.
2. Payment only for random losses.
3. Risk transfer.
4. Indemnification
Pooling of losses - ANSWER>>Is the basis of insurance. Pooling = losses are spread
over a large group of individuals. Pooling involves the grouping of a large number
of homogeneous exposure units. People or things having the same risk
characteristics. Law of large numbers applies.
Payment only for random losses - ANSWER>>A random loss is one that is
unforeseen and unexpected and occurs as a result of chance. With insurance,
payments are made only for random losses.
Risk transfer - ANSWER>>The transfer of risk from an insured to an insurer.
Insurance involves risk transfer. The exception to risk transfer is self-insurance.
The insurer is in a better financial position to bear the risk than the insured
because of the law of large numbers.
,Private Insurers - ANSWER>>Blue Cross/Blue Shield, Commercial Insurers, and
Self-insurers.
Blue Cross Blue Shield - ANSWER>>Blue Cross Blue Shield organizations trace their
roots to the Great Depression, when both hospitals and physicians were
concerned about their patients' ability to pay health care bills.
Blue Cross - ANSWER>>Multiple insurance programs offered by hospitals.
Hospitals provided services to program members who made fixed payments to
hospitals. Programs expanded from single-hospital programs to multi-hospital
plans called hospital service plans. The Blue Cross name was officially adopted by
most of these plans in 1939.
Blue Shield - ANSWER>>Similar to Blue Cross plans. Providers were physicians not
hospitals. 36 Blue Cross Blue Shield organizations today. The Blues are
independent corporations that belong to a single national association with set
standards. The Blues provide health care coverage for 106 million individuals.
Commercial Insurers - ANSWER>>Private, non-government insurers who are often
the insurance options available through employers. All commercial insurance
companies are taxable (for-profit) entities.
Self-Insurers - ANSWER>>Establishes a self-funded plan to cover potential losses
instead of transferring the risk to an insurance company. Large groups, especially
employers, are good candidates for self insurance. Today, most large groups are
self-insured.
Public Insurers - ANSWER>>Government is a major insurer and direct provider of
health care services. Government provides health care services through the U.S.
Department of Veterans Affairs, the U.S. Department of Defense and TRICARE
program. The government provides or mandates insurance programs, such as
workers' compensation, Medicare and Medicaid.
, Medicare Part A - ANSWER>>Hospital and some skilled nursing facility coverage.
Part C: Managed care coverages offered by private insurance companies and can
be selected in lieu of Parts A and B. Also called Medicare Advantage Plans. Part D:
Prescription Drug coverage.
Medicare Part B - ANSWER>>Physician services, ambulatory surgical services,
outpatient services, and other miscellaneous services.
Medicare Part C - ANSWER>>Managed care coverages offered by private
insurance companies and can be selected in lieu of Parts A and B. Also called
Medicare Advantage Plans.
Medicare Part D - ANSWER>>Prescription Drug coverage.
Managed Care Plan - ANSWER>>Managed care plans combine the provision of
health care services and the insurance function into a single entity. The aim of this
entity is to both increase the quality of care and to decrease the cost of health
care services. The common feature in managed care plans is that the insurer has a
mechanism by which it controls, or at least influences, patients' utilization of
health care services.
Preferred Provider Organization (PPO) - ANSWER>>Evolved during the 1980s. A
hybrid of HMOs and traditional health insurance plans that use cost saving
strategies of HMOs. Do not mandate that beneficiaries use specific providers.
Financial incentives to use providers that are part of the provider panel. Do not
require beneficiaries to use preselected gatekeeper physicians.
Health Maintenance Organization (HMO) - ANSWER>>One type of managed care
plan. Based on the premise that the traditional insurer-provider relationship
creates incentives that reward providers for treating patients' illnesses while
offering little incentive for providing prevention and rehabilitation services.
Associate 2 (CEBS GBA) Exam Questions and
Answers
Benefits of STD group policies - ANSWER>>Ensures that experienced professionals
are managing claims, gives access to return-to-work support and fraud-prevention
services, and locks in a fixed amount of monthly financial obligation (premiums)
regardless of the disability benefits being paid.
The law of large numbers states that: - ANSWER>>As the size of the same
increases, the sample mean gets closer to the population mean.
Indemnification - ANSWER>>Indemnification of losses means reimbursement to
the insured if a loss occurs. In theory, indemnification restores the individual to
their preexisting state had the loss not occurred.
Adverse Selection - ANSWER>>Occurs because individuals and businesses that are
more likely to have claims are more inclined to purchase insurance than those
that are less likely to have claims. This exists because individuals know more
about their health status than do insurers.
Moral Hazard - ANSWER>>Premise that payments are made only for random
losses which creates moral hazard. Moral hazard is faced by insurers because
individuals are more likely to use unneeded health services when they are not
paying the full cost of those services.
Coinsurance - ANSWER>>A type of insurance in which the insured pays a share of
the payment made against a claim in excess of the deductible.
,Third-Party Payers - ANSWER>>Generic term for any outside party, insurance
company or a government program, which pays for part or all of a patient's health
care services. Health insurers can be categorized into two broad groupings:
private insurers and public programs.
Medicare - ANSWER>>A federal program of health insurance established by
Congress in 1965 to provide medical benefits to persons 65 years of age and
older. Also covers health care costs associated with selected disabilities and
illnesses, regardless of age.
Medicaid - ANSWER>>Began in 1966. A federal and state assistance program that
pays for health care services for people who cannot afford them. Mandatory
nursing home benefit added in 1972.
Four Characteristics of Insurance - ANSWER>>1. Pooling of losses.
2. Payment only for random losses.
3. Risk transfer.
4. Indemnification
Pooling of losses - ANSWER>>Is the basis of insurance. Pooling = losses are spread
over a large group of individuals. Pooling involves the grouping of a large number
of homogeneous exposure units. People or things having the same risk
characteristics. Law of large numbers applies.
Payment only for random losses - ANSWER>>A random loss is one that is
unforeseen and unexpected and occurs as a result of chance. With insurance,
payments are made only for random losses.
Risk transfer - ANSWER>>The transfer of risk from an insured to an insurer.
Insurance involves risk transfer. The exception to risk transfer is self-insurance.
The insurer is in a better financial position to bear the risk than the insured
because of the law of large numbers.
,Private Insurers - ANSWER>>Blue Cross/Blue Shield, Commercial Insurers, and
Self-insurers.
Blue Cross Blue Shield - ANSWER>>Blue Cross Blue Shield organizations trace their
roots to the Great Depression, when both hospitals and physicians were
concerned about their patients' ability to pay health care bills.
Blue Cross - ANSWER>>Multiple insurance programs offered by hospitals.
Hospitals provided services to program members who made fixed payments to
hospitals. Programs expanded from single-hospital programs to multi-hospital
plans called hospital service plans. The Blue Cross name was officially adopted by
most of these plans in 1939.
Blue Shield - ANSWER>>Similar to Blue Cross plans. Providers were physicians not
hospitals. 36 Blue Cross Blue Shield organizations today. The Blues are
independent corporations that belong to a single national association with set
standards. The Blues provide health care coverage for 106 million individuals.
Commercial Insurers - ANSWER>>Private, non-government insurers who are often
the insurance options available through employers. All commercial insurance
companies are taxable (for-profit) entities.
Self-Insurers - ANSWER>>Establishes a self-funded plan to cover potential losses
instead of transferring the risk to an insurance company. Large groups, especially
employers, are good candidates for self insurance. Today, most large groups are
self-insured.
Public Insurers - ANSWER>>Government is a major insurer and direct provider of
health care services. Government provides health care services through the U.S.
Department of Veterans Affairs, the U.S. Department of Defense and TRICARE
program. The government provides or mandates insurance programs, such as
workers' compensation, Medicare and Medicaid.
, Medicare Part A - ANSWER>>Hospital and some skilled nursing facility coverage.
Part C: Managed care coverages offered by private insurance companies and can
be selected in lieu of Parts A and B. Also called Medicare Advantage Plans. Part D:
Prescription Drug coverage.
Medicare Part B - ANSWER>>Physician services, ambulatory surgical services,
outpatient services, and other miscellaneous services.
Medicare Part C - ANSWER>>Managed care coverages offered by private
insurance companies and can be selected in lieu of Parts A and B. Also called
Medicare Advantage Plans.
Medicare Part D - ANSWER>>Prescription Drug coverage.
Managed Care Plan - ANSWER>>Managed care plans combine the provision of
health care services and the insurance function into a single entity. The aim of this
entity is to both increase the quality of care and to decrease the cost of health
care services. The common feature in managed care plans is that the insurer has a
mechanism by which it controls, or at least influences, patients' utilization of
health care services.
Preferred Provider Organization (PPO) - ANSWER>>Evolved during the 1980s. A
hybrid of HMOs and traditional health insurance plans that use cost saving
strategies of HMOs. Do not mandate that beneficiaries use specific providers.
Financial incentives to use providers that are part of the provider panel. Do not
require beneficiaries to use preselected gatekeeper physicians.
Health Maintenance Organization (HMO) - ANSWER>>One type of managed care
plan. Based on the premise that the traditional insurer-provider relationship
creates incentives that reward providers for treating patients' illnesses while
offering little incentive for providing prevention and rehabilitation services.
