FLORIDA HEALTH INSURANCE 2 – 40 PRACTICE EXAM 2
QUESTIONS WITH DETAILED ANSWERS
Which of the following is NOT a form of medical insurance?
-Business overhead expense
-Surgical expense
-Hospital expense
-Long term care – CORRECT ANSWER: Business overhead expense
(Explanation:Business Overhead Expense insurance is designed to reimburse a
business for overhead expenses in the event a business owner becomes disabled.
Expenses such as rent, utilities, telephone, equipment, employees' salaries, etc.)
All of the following are state or federal government programs that provide health
insurance, EXCEPT?
-Medicare
-OASDI disability
-Medicaid
-Medigap - CORRECT ANSWER: Medigap (Explanation:A Medigap policy is a Medicare
supplement insurance policy sold by private insurance companies to fill "gaps" in
Medicare Parts A and B.)
What type of health insurance is available to assist low-income individuals? -
CORRECT ANSWER: Medicaid
What types of reserves are set aside and held by health insurance companies? -
CORRECT ANSWER: Premium and Claims reserves (Explanation:Reserves are set
aside for the payment of future claims.)
Group health insurance is generally written on a basis that provides for dividends or
experience rating. What is the basis called? - Participating (Explanation:Group plans
written by mutual companies provide for dividends while stock companies
frequently issue experience-rated plans.)
Which of the following is NOT TRUE regarding eligibility for subsidies for families
under the new health care act?
-For those who make between 100-400% of the Federal Poverty -Level
-Cannot be covered by an employer
-Cannot be eligible for Medicare
-Can be eligible for Medicaid - CORRECT ANSWER: Can be eligible for Medicaid
Which of the following operates as a corporation, society, or association to provide
life insurance primarily for the mutual benefit of its members, has a lodge or social
system with rituals and representative form of government?
A) Mutual companies
,B) Fraternal associations
C) Stock companies
-Fraternal benefit society - CORRECT ANSWER: B) Fraternal associations
What does each member pay in a typical HMO plan?
-Fixed premium based on a deductible and copay
-Fixed premium whether or not plan is used
-Premium based on how often plan is used - CORRECT ANSWER: Fixed premium
whether or not plan is used
Which of the following is correct about those who are eligible for Medicare and wish
to join an HMO?
-They must have a current Medicare supplement policy
-They must be told that'll be getting all the benefits from the Medicare Advantage
plan
-They must be age 70 and above
-They must have been enrolled previously in an HMO - CORRECT ANSWER: They
must be told that'll be getting all the benefits from the Medicare Advantage plan
Joyce is totally disabled. Her HMO policy just terminated. All of the following are
correct regarding "extension of benefits" for Joyce, EXCEPT?
-Coverage ends once maximum benefits have been exhausted
-Coverage ends once another carrier assumes coverage
-Coverage ends if no longer totally disabled
-Coverage ends after 18 months - CORRECT ANSWER: Coverage ends after 18 months
All of the following are correct regarding Florida regulation of HMOs, EXCEPT?
-Must obtain a Certificate of Authority
-Must file a report of its activities within 3 months of the end of each fiscal year
-Must deposit $100,000 with the Rehabilitation Administration Expense Fund
-Must be sold by agents licensed and appointed as health insurance agents - Must
deposit $100,000 with the Rehabilitation Administration Expense Fund
(Explanation:
They must deposit $10,000 with the Rehabilitation Administration Expense Fund.)
What is "capitation" as it relates to an HMO?
-Amount to be collected by the HMO from participating health care providers
-Fixed amount paid by an HMO during a policy period
-Fixed amount paid by an HMO to a physician for medical services
-Amount required to be deposited with the State of Florida - CORRECT ANSWER:
Fixed amount paid by an HMO to a physician for medical services
When a person is covered by an HMO, the contract certificate or member's handbook
must be delivered within how many days after approval of the enrollment by the
HMO?
-20 days
,-10 days
-5 days
-14 days - CORRECT ANSWER: 10 days
Which of the following statements about health service organizations is true?
-They reimburse Policyowners directly for physicians' fees
-They provide loss of income benefits to Policyowners
-They reimburse Policyowners directly for all medical expenses
-They provide benefit payments directly to the hospitals and physicians providing
services - CORRECT ANSWER: They provide benefit payments directly to the
hospitals and physicians providing services
What is the period of time for an HMO "open enrollment"?
-45 days during every 18-month period
-30 days during every 12-month period
-30 days during every 18-month period
-45 days during every 12-month period - CORRECT ANSWER: 30 days during every
18-month period
If an HMO is found guilty of unfair trade practices, what is the maximum penalty that
can be charged?
-Up to $50,000
-Up to $150,000
-Up to $200,00
-Up to $100,000 - CORRECT ANSWER: Up to $200,00
Which of the following statements about Worker's Compensation laws is
INCORRECT?
-Employers can purchase coverage through the state program, private insurers or
can self-insure
-Worker's compensation provides benefits for work-related injuries, illness or death
-Not all states have a workers compensation law
-Basic principle is that work-related injuries are compensable by the employer
without regard to fault - CORRECT ANSWER: Not all states have a workers
compensation law
What year was the Social Security Act amended to add health insurance protection
for the aged and disabled?
-1973
-1965
-1985
-1935 - CORRECT ANSWER: 1965
All of the following are true statements about Workers Compensation, EXCEPT..?
- CORRECT ANSWER: Benefits are not paid unless there is employer negligence
-Pays benefits for work related injuries and illnesses
, -Employee does not contribute to the plan
-All states have Workers Compensation laws - CORRECT ANSWER: Benefits are not
paid unless there is employer negligence
Which of the following is a state administered disability plan?
-Social Security
-Workers Compensation
-Medigap
-Medicare - CORRECT ANSWER: Workers Compensation
All of the following are nontraditional methods of providing health insurance,
EXCEPT?
-Multiple Employer Trusts
-Multiple Employer Welfare Arrangements
-Self-insurance
-Commercial insurers - CORRECT ANSWER: Commercial insurers
All of the following are true about a multiple employer welfare arrangement
(MEWA), EXCEPT?
-Required by law to have an employment-related common bond
-Often provide insurance on a self-insured basis
-Tax-exempt entities
-Large employers who have joined together to provide health insurance benefits -
CORRECT ANSWER: Large employers who have joined together to provide health
insurance benefits (Explanation:
MEWAs consist of small employers who join together to provide health insurance
benefits for their employees)
Grouping small businesses together to obtain health insurance as one large group is
a characteristic of what type of group?
-Multiple Employer Trust (MET)
-Franchise Health plan
-Health Maintenance Organization (HMO)
-Blue Cross/Blue Shield - CORRECT ANSWER: Multiple Employer Trust (MET)
Casey has a medical expense policy that provides a fixed rate of $150 per day for
hospitalization. Casey is hospitalized for 10 days and incurred covered medical
expenses of $20,000. What will her medical expense policy pay?
-$1,500
-$20,000
-$15,000
-$3,000 - CORRECT ANSWER: $1,500 (Explanation:
Casey's policy will only cover a fixed rate per day for hospitalization of $150. If she is
hospitalized for 10 days, then her policy will pay $1,500 ($150 x 10) of the total
$20,000 in expenses.)
QUESTIONS WITH DETAILED ANSWERS
Which of the following is NOT a form of medical insurance?
-Business overhead expense
-Surgical expense
-Hospital expense
-Long term care – CORRECT ANSWER: Business overhead expense
(Explanation:Business Overhead Expense insurance is designed to reimburse a
business for overhead expenses in the event a business owner becomes disabled.
Expenses such as rent, utilities, telephone, equipment, employees' salaries, etc.)
All of the following are state or federal government programs that provide health
insurance, EXCEPT?
-Medicare
-OASDI disability
-Medicaid
-Medigap - CORRECT ANSWER: Medigap (Explanation:A Medigap policy is a Medicare
supplement insurance policy sold by private insurance companies to fill "gaps" in
Medicare Parts A and B.)
What type of health insurance is available to assist low-income individuals? -
CORRECT ANSWER: Medicaid
What types of reserves are set aside and held by health insurance companies? -
CORRECT ANSWER: Premium and Claims reserves (Explanation:Reserves are set
aside for the payment of future claims.)
Group health insurance is generally written on a basis that provides for dividends or
experience rating. What is the basis called? - Participating (Explanation:Group plans
written by mutual companies provide for dividends while stock companies
frequently issue experience-rated plans.)
Which of the following is NOT TRUE regarding eligibility for subsidies for families
under the new health care act?
-For those who make between 100-400% of the Federal Poverty -Level
-Cannot be covered by an employer
-Cannot be eligible for Medicare
-Can be eligible for Medicaid - CORRECT ANSWER: Can be eligible for Medicaid
Which of the following operates as a corporation, society, or association to provide
life insurance primarily for the mutual benefit of its members, has a lodge or social
system with rituals and representative form of government?
A) Mutual companies
,B) Fraternal associations
C) Stock companies
-Fraternal benefit society - CORRECT ANSWER: B) Fraternal associations
What does each member pay in a typical HMO plan?
-Fixed premium based on a deductible and copay
-Fixed premium whether or not plan is used
-Premium based on how often plan is used - CORRECT ANSWER: Fixed premium
whether or not plan is used
Which of the following is correct about those who are eligible for Medicare and wish
to join an HMO?
-They must have a current Medicare supplement policy
-They must be told that'll be getting all the benefits from the Medicare Advantage
plan
-They must be age 70 and above
-They must have been enrolled previously in an HMO - CORRECT ANSWER: They
must be told that'll be getting all the benefits from the Medicare Advantage plan
Joyce is totally disabled. Her HMO policy just terminated. All of the following are
correct regarding "extension of benefits" for Joyce, EXCEPT?
-Coverage ends once maximum benefits have been exhausted
-Coverage ends once another carrier assumes coverage
-Coverage ends if no longer totally disabled
-Coverage ends after 18 months - CORRECT ANSWER: Coverage ends after 18 months
All of the following are correct regarding Florida regulation of HMOs, EXCEPT?
-Must obtain a Certificate of Authority
-Must file a report of its activities within 3 months of the end of each fiscal year
-Must deposit $100,000 with the Rehabilitation Administration Expense Fund
-Must be sold by agents licensed and appointed as health insurance agents - Must
deposit $100,000 with the Rehabilitation Administration Expense Fund
(Explanation:
They must deposit $10,000 with the Rehabilitation Administration Expense Fund.)
What is "capitation" as it relates to an HMO?
-Amount to be collected by the HMO from participating health care providers
-Fixed amount paid by an HMO during a policy period
-Fixed amount paid by an HMO to a physician for medical services
-Amount required to be deposited with the State of Florida - CORRECT ANSWER:
Fixed amount paid by an HMO to a physician for medical services
When a person is covered by an HMO, the contract certificate or member's handbook
must be delivered within how many days after approval of the enrollment by the
HMO?
-20 days
,-10 days
-5 days
-14 days - CORRECT ANSWER: 10 days
Which of the following statements about health service organizations is true?
-They reimburse Policyowners directly for physicians' fees
-They provide loss of income benefits to Policyowners
-They reimburse Policyowners directly for all medical expenses
-They provide benefit payments directly to the hospitals and physicians providing
services - CORRECT ANSWER: They provide benefit payments directly to the
hospitals and physicians providing services
What is the period of time for an HMO "open enrollment"?
-45 days during every 18-month period
-30 days during every 12-month period
-30 days during every 18-month period
-45 days during every 12-month period - CORRECT ANSWER: 30 days during every
18-month period
If an HMO is found guilty of unfair trade practices, what is the maximum penalty that
can be charged?
-Up to $50,000
-Up to $150,000
-Up to $200,00
-Up to $100,000 - CORRECT ANSWER: Up to $200,00
Which of the following statements about Worker's Compensation laws is
INCORRECT?
-Employers can purchase coverage through the state program, private insurers or
can self-insure
-Worker's compensation provides benefits for work-related injuries, illness or death
-Not all states have a workers compensation law
-Basic principle is that work-related injuries are compensable by the employer
without regard to fault - CORRECT ANSWER: Not all states have a workers
compensation law
What year was the Social Security Act amended to add health insurance protection
for the aged and disabled?
-1973
-1965
-1985
-1935 - CORRECT ANSWER: 1965
All of the following are true statements about Workers Compensation, EXCEPT..?
- CORRECT ANSWER: Benefits are not paid unless there is employer negligence
-Pays benefits for work related injuries and illnesses
, -Employee does not contribute to the plan
-All states have Workers Compensation laws - CORRECT ANSWER: Benefits are not
paid unless there is employer negligence
Which of the following is a state administered disability plan?
-Social Security
-Workers Compensation
-Medigap
-Medicare - CORRECT ANSWER: Workers Compensation
All of the following are nontraditional methods of providing health insurance,
EXCEPT?
-Multiple Employer Trusts
-Multiple Employer Welfare Arrangements
-Self-insurance
-Commercial insurers - CORRECT ANSWER: Commercial insurers
All of the following are true about a multiple employer welfare arrangement
(MEWA), EXCEPT?
-Required by law to have an employment-related common bond
-Often provide insurance on a self-insured basis
-Tax-exempt entities
-Large employers who have joined together to provide health insurance benefits -
CORRECT ANSWER: Large employers who have joined together to provide health
insurance benefits (Explanation:
MEWAs consist of small employers who join together to provide health insurance
benefits for their employees)
Grouping small businesses together to obtain health insurance as one large group is
a characteristic of what type of group?
-Multiple Employer Trust (MET)
-Franchise Health plan
-Health Maintenance Organization (HMO)
-Blue Cross/Blue Shield - CORRECT ANSWER: Multiple Employer Trust (MET)
Casey has a medical expense policy that provides a fixed rate of $150 per day for
hospitalization. Casey is hospitalized for 10 days and incurred covered medical
expenses of $20,000. What will her medical expense policy pay?
-$1,500
-$20,000
-$15,000
-$3,000 - CORRECT ANSWER: $1,500 (Explanation:
Casey's policy will only cover a fixed rate per day for hospitalization of $150. If she is
hospitalized for 10 days, then her policy will pay $1,500 ($150 x 10) of the total
$20,000 in expenses.)
