Question 1

Advantages of cafeteria plans include all of the following EXCEPT

Accepted Answer

A) simplicity of benefit administration. 
B) employees can select benefits that best match their needs. 
C) reduced taxes for employees. 
D) greater employer control over increasing benefit costs. 
A) simplicity of benefit administration. 
B) employees can select benefits that best match their needs. 
C) reduced taxes for employees. 
D) greater employer control over increasing benefit costs. A

Question 2

All of the following statements about HMOs are true EXCEPT

Accepted Answer

A) They organize and deliver health care services. 
B) HMOs place a heavy emphasis on controlling the cost of covered services. 
C) HMO members pay nothing for medical care until care is provided,then they must pay high deductibles and large coinsurance payments. 
D) The selection of physicians is usually limited to physicians affiliated with the HMO. 
A) They organize and deliver health care services. 
B) HMOs place a heavy emphasis on controlling the cost of covered services. 
C) HMO members pay nothing for medical care until care is provided,then they must pay high deductibles and large coinsurance payments. 
D) The selection of physicians is usually limited to physicians affiliated with the HMO. C

Question 3

Which of the following statements about the continuation of group health insurance under the COBRA law is true?

Accepted Answer

A) A continuation of coverage must be made available even if an employee voluntarily terminates employment. 
B) The length of the continuation of coverage is 90 days. 
C) The option to continue coverage applies to minor children only,not to adults. 
D) The employer must pay the entire cost of coverage during the continuation period. 
A) A continuation of coverage must be made available even if an employee voluntarily terminates employment. 
B) The length of the continuation of coverage is 90 days. 
C) The option to continue coverage applies to minor children only,not to adults. 
D) The employer must pay the entire cost of coverage during the continuation period. A

Question 4

Turner Company self-insures its group health insurance plan.Turner entered into an agreement with ABC Insurance through which ABC handles the plan design,claims processing,and record keeping for Turner.The agreement between Turner and ABC is called a(n)

Accepted Answer

A) preferred provider agreement. 
B) administrative services only contract. 
C) exclusive provider agreement. 
D) point-of-service contract. 
A) preferred provider agreement. 
B) administrative services only contract. 
C) exclusive provider agreement. 
D) point-of-service contract.

Question 5

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.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 6

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

A) defined benefit plan. 
B) cafeteria plan. 
C) employee selection plan. 
D) contributory plan. 
A) defined benefit plan. 
B) cafeteria plan. 
C) employee selection plan. 
D) contributory plan.

Question 7

Which of the following statements about group insurance is true?

Accepted Answer

A) Individual contracts are issued to each person covered under a group insurance plan. 
B) The cost of group insurance is usually higher on a per-person basis than the cost of individual insurance. 
C) The actual experience of a large group is a factor in determining the premium that is charged. 
D) Individual evidence of insurability is usually required. 
A) Individual contracts are issued to each person covered under a group insurance plan. 
B) The cost of group insurance is usually higher on a per-person basis than the cost of individual insurance. 
C) The actual experience of a large group is a factor in determining the premium that is charged. 
D) Individual evidence of insurability is usually required.

Question 8

The Affordable Care Act created program that enables small firms to offer health insurance to their employees.The program provides flexibility,choice,and the convenience of on-line account management.This program is called the

Accepted Answer

A) Medical Advantage plan. 
B) Medicaid program. 
C) FAIR plan. 
D) SHOP Marketplace program. 
A) Medical Advantage plan. 
B) Medicaid program. 
C) FAIR plan. 
D) SHOP Marketplace program.

Question 9

Which of the following statements about the eligibility requirements for group insurance is true?

Accepted Answer

A) Most plans cover both full-time and part-time employees. 
B) An employee must be actively at work on the day the employee's group insurance becomes effective. 
C) An employee who signs-up for insurance during an eligibility period must furnish evidence of insurability. 
D) One purpose of a probationary period is to determine whether the employee is healthy enough to be covered under the group health insurance plan. 
A) Most plans cover both full-time and part-time employees. 
B) An employee must be actively at work on the day the employee's group insurance becomes effective. 
C) An employee who signs-up for insurance during an eligibility period must furnish evidence of insurability. 
D) One purpose of a probationary period is to determine whether the employee is healthy enough to be covered under the group health insurance plan.

Question 10

Which of the following statements about cafeteria plans is (are)true?
I.Unspent flexible spending account balances are refunded in cash to the employee,tax-free,at year-end.
II.Cafeteria plans enable employees to select benefits that meet their specific needs.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 11

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)

Accepted Answer

A) probationary period. 
B) elimination period. 
C) open enrollment period. 
D) eligibility period. 
A) probationary period. 
B) elimination period. 
C) open enrollment period. 
D) eligibility period.

Question 12

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

Accepted Answer

A) reinsurance. 
B) managed care. 
C) stop-loss insurance. 
D) coinsurance. 
A) reinsurance. 
B) managed care. 
C) stop-loss insurance. 
D) coinsurance.

Question 13

Some employers offer employees a choice of health care plans which are designed to make employees more sensitive to health care costs,to provide an incentive to avoid unneeded care,and to seek low-cost health care providers.Such plans are called

Accepted Answer

A) employee assistance plans. 
B) consumer-directed health plans. 
C) cafeteria plans. 
D) preferred provider organization (PPO)plans. 
A) employee assistance plans. 
B) consumer-directed health plans. 
C) cafeteria plans. 
D) preferred provider organization (PPO)plans.

Question 14

The period of time during which an employee can sign up for group insurance coverage without furnishing evidence of insurability is called a(n)

Accepted Answer

A) probationary period. 
B) noninsurability window. 
C) waiting period. 
D) eligibility period. 
A) probationary period. 
B) noninsurability window. 
C) waiting period. 
D) eligibility period.

Question 15

What is the purpose of stop-loss insurance that is used with self-insured group medical expense plans?

Accepted Answer

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 exempt self-insured plans from state insurance laws that require mandated benefits 
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 exempt self-insured plans from state insurance laws that require mandated benefits

Question 16

Which of the following statements concerning managed care plans is true?
I.Most employees are covered under some form of managed care plan.
II.Managed care plans emphasize cost controls and preventative care.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 17

Which of the following statements about group term life insurance is true?

Accepted Answer

A) It usually is written in the form of 5-year level term insurance. 
B) An employee who leaves the group is usually not permitted to convert to individual coverage. 
C) Experience rating is used in group term life insurance plans. 
D) It represents only a small percentage of the group life insurance in force. 
A) It usually is written in the form of 5-year level term insurance. 
B) An employee who leaves the group is usually not permitted to convert to individual coverage. 
C) Experience rating is used in group term life insurance plans. 
D) It represents only a small percentage of the group life insurance in force.

Question 18

Under one type of HMO,the physicians are employees of the HMO and are paid a salary and sometimes an incentive bonus to hold down costs.This type of HMO is called a(n)

Accepted Answer

A) individual practice association (IP
A) . 
B) staff model. 
C) group model. 
D) network model. 
A) individual practice association (IP
A) . 
B) staff model. 
C) group model. 
D) network model.

Question 19

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

Accepted Answer

A) other insurance. 
B) coinsurance. 
C) pro-rated insurance. 
D) reinsurance. 
A) other insurance. 
B) coinsurance. 
C) pro-rated insurance. 
D) reinsurance.

Question 20

Under many cafeteria plans,employees make premium contributions with pre-tax dollars and a salary reduction that are used to purchase group health insurance or dental insurance.This type of cafeteria plan is called a

Accepted Answer

A) health reimbursement arrangement plan. 
B) premium conversion plan. 
C) full-choice plan. 
D) flexible spending account plan. 
A) health reimbursement arrangement plan. 
B) premium conversion plan. 
C) full-choice plan. 
D) flexible spending account plan.

Exam 16: Employee Benefits: Group Life and Health Insurance

Advantages of cafeteria plans include all of the following EXCEPT

All of the following statements about HMOs are true EXCEPT

Which of the following statements about the continuation of group health insurance under the COBRA law is true?

Turner Company self-insures its group health insurance plan.Turner entered into an agreement with ABC Insurance through which ABC handles the plan design,claims processing,and record keeping for Turner.The agreement between Turner and ABC is called a(n)

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)

Which of the following statements about group insurance is true?

The Affordable Care Act created program that enables small firms to offer health insurance to their employees.The program provides flexibility,choice,and the convenience of on-line account management.This program is called the

Which of the following statements about the eligibility requirements for group insurance is true?

Which of the following statements about cafeteria plans is (are)true? I.Unspent flexible spending account balances are refunded in cash to the employee,tax-free,at year-end. II.Cafeteria plans enable employees to select benefits that meet their specific needs.

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)

Some employers offer employees a choice of health care plans which are designed to make employees more sensitive to health care costs,to provide an incentive to avoid unneeded care,and to seek low-cost health care providers.Such plans are called

The period of time during which an employee can sign up for group insurance coverage without furnishing evidence of insurability is called a(n)

What is the purpose of stop-loss insurance that is used with self-insured group medical expense plans?

Which of the following statements concerning managed care plans is true? I.Most employees are covered under some form of managed care plan. II.Managed care plans emphasize cost controls and preventative care.

Which of the following statements about group term life insurance is true?

Under one type of HMO,the physicians are employees of the HMO and are paid a salary and sometimes an incentive bonus to hold down costs.This type of HMO is called a(n)

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

Under many cafeteria plans,employees make premium contributions with pre-tax dollars and a salary reduction that are used to purchase group health insurance or dental insurance.This type of cafeteria plan is called a

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