Connors Company self-funds the medical expense benefits that it provides to its employees. Connors Company has a contract with a commercial health insurance company providing that the health insurance company will pay all claims in excess of $250,000. The arrangement with the health insurance company is called A) reinsurance. B) managed care. C) stop-loss insurance. […]
Reasons for having a minimum participation requirement before a group is eligible for insurance include which of the following? I. To lower the expense rate per unit of insurance II. To minimize the possibility of insuring a group which consists largely of unhealthy individuals A) I only B) II only C) both I and II […]
High deductible group health insurance plans have all of the following characteristics EXCEPT A) health savings accounts or health reimbursement arrangements. B) high dollar deductibles. C) low coverage limits. D) coinsurance. ANSWER Answer: C
Which of the following statements about group accidental death and dismemberment (AD&D) insurance is (are) true? I. The principal sum is paid if the employee dies in an accident. II. A percentage of the principal sum is paid for certain types of dismemberments. A) I only B) II only C) both I and II D) […]
Which of the following statements about Blue Cross Plans is (are) true? I. They provide coverage for physicians’ and surgeons’ fees. II. They usually provide benefits for hospital charges. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: A
New employees at Jarvis Company cannot participate in the group term life insurance plan until they have worked at the company for three months. This initial period before a new employee can participate is called a(n) A) probationary period. B) elimination period. C) open enrollment period. D) eligibility period. ANSWER Answer: A
What is the purpose of stop-loss insurance that is used with self-insured group medical expense plans? A) to require employees to buy insurance for losses in excess of some specified amount B) to have a commercial insurer pay claims that exceed a specified limit C) to obtain administrative services from a commercial insurer D) to […]
Which of the following statements about recent developments in group medical coverage is (are) true? I. After increasing for many years, the premiums for group medical expense coverage have finally started to decline. II. A growing number of employers are offering plans with higher deductibles for employees. A) I only B) II only C) both […]
All of the following are reasons why employers self-insure medical expense plans EXCEPT A) to reduce certain costs, such as premium taxes and commissions. B) to provide mandated state benefits. C) to retain funds until needed to pay claims. D) to eliminate the need to comply with separate state laws. ANSWER Answer: B
A key feature of group medical expense plans is the employee being required to pay a percentage of covered expenses in excess of the deductible. This feature is A) other insurance. B) coinsurance. C) pro-rated insurance. D) reinsurance. ANSWER Answer: B
