Question 1

In addition to social security tax withholding,wage earners also pay a 1.45% withholding tax on all gross salary and wages for

Accepted Answer

A)  supplemental social security tax. 
B)  medicaid tax. 
C)  medicare tax. 
D)  the supplemental college loan fund. 
A)  supplemental social security tax. 
B)  medicaid tax. 
C)  medicare tax. 
D)  the supplemental college loan fund.

Question 2

Which of the following is an advantage of a PPO compared to an HMO?

Accepted Answer

A)  The premiums are lower. 
B)  There are more choices of specialized health care providers. 
C)  There are no out-of-pocket expenses. 
D)  No approval is needed to see a specialist. 
A)  The premiums are lower. 
B)  There are more choices of specialized health care providers. 
C)  There are no out-of-pocket expenses. 
D)  No approval is needed to see a specialist.

Question 3

Buying health insurance through employer-sponsored plans is somewhat more expensive than buying your own policy individually.

Accepted Answer

A) True 
 B)False

Question 4

Disability insurance policies usually cover

Accepted Answer

A)  actual expenses incurred. 
B)  a minimum dollar amount. 
C)  a percentage of your income before you were disabled. 
D)  Any of the above. 
A)  actual expenses incurred. 
B)  a minimum dollar amount. 
C)  a percentage of your income before you were disabled. 
D)  Any of the above.

Question 5

Which statement regarding COBRA is true?

Accepted Answer

A)  The act applies to private firms and agencies of state government but not to federal government agencies. 
B)  COBRA allows you to continue your health coverage for two years after you stop working. 
C)  The act was passed in 2010. 
D)  If you retire and are not yet eligible to receive Medicare, you are not covered by COBRA. 
A)  The act applies to private firms and agencies of state government but not to federal government agencies. 
B)  COBRA allows you to continue your health coverage for two years after you stop working. 
C)  The act was passed in 2010. 
D)  If you retire and are not yet eligible to receive Medicare, you are not covered by COBRA.

Question 6

Usually plans such as dental insurance and vision insurance are good deals if they are offered through employers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not true regarding employer disability insurance?

Accepted Answer

A)  Disability benefits are provided for very long periods, usually up to 30 years. 
B)  About half of all large and medium-sized firms offer an optional disability plan through an insurance company. 
C)  The premiums charged through group plans are normally low. 
D)  A typical disability policy covers about 60% of the employee's salary. 
A)  Disability benefits are provided for very long periods, usually up to 30 years. 
B)  About half of all large and medium-sized firms offer an optional disability plan through an insurance company. 
C)  The premiums charged through group plans are normally low. 
D)  A typical disability policy covers about 60% of the employee's salary.

Question 8

All of the following will lower the premium of long-term care insurance,except

Accepted Answer

A)  having a longer waiting period before the policy goes into effect. 
B)  having a higher stop-loss provision. 
C)  waiting until you are retired to obtain the insurance. 
D)  choosing to receive benefits for a limited period. 
A)  having a longer waiting period before the policy goes into effect. 
B)  having a higher stop-loss provision. 
C)  waiting until you are retired to obtain the insurance. 
D)  choosing to receive benefits for a limited period.

Question 9

One disadvantage of a flexible spending account is

Accepted Answer

A)  the amount is not subject to federal, state or local taxes. 
B)  funds allocated to the account cannot be rolled over into the next year. 
C)  funds are available to pay for out-of-pocket expenses. 
D)  it allows you to budget for uncovered medical expenses. 
A)  the amount is not subject to federal, state or local taxes. 
B)  funds allocated to the account cannot be rolled over into the next year. 
C)  funds are available to pay for out-of-pocket expenses. 
D)  it allows you to budget for uncovered medical expenses.

Question 10

Compared to indemnity plans,what is an advantage of managed health care plans?

Accepted Answer

A)  You will have lower insurance premiums. 
B)  There are no out-of-pocket expenses required. 
C)  You have greater choices of health care providers. 
D)  They are very efficient in their handling of paperwork. 
A)  You will have lower insurance premiums. 
B)  There are no out-of-pocket expenses required. 
C)  You have greater choices of health care providers. 
D)  They are very efficient in their handling of paperwork.

Question 11

Which one of the following benefits is most often available through an employer?

Accepted Answer

A)  Disability insurance 
B)  Health insurance 
C)  Dental insurance 
D)  Vision insurance 
A)  Disability insurance 
B)  Health insurance 
C)  Dental insurance 
D)  Vision insurance

Question 12

Which of the following is not true as it relates to the cost of health care?

Accepted Answer

A)  Fraudulent claims by patients and health care providers add to the cost. 
B)  People are living longer and their health care costs are higher. 
C)  Better claim handling and processing has helped reduce the cost of health care. 
D)  Technology used in medicine is very expensive and has added to the cost. 
A)  Fraudulent claims by patients and health care providers add to the cost. 
B)  People are living longer and their health care costs are higher. 
C)  Better claim handling and processing has helped reduce the cost of health care. 
D)  Technology used in medicine is very expensive and has added to the cost.

Question 13

How much of a $2,000 medical bill would you pay if your policy contains a $400 deductible and a 10% coinsurance clause?

Accepted Answer

A)  $200 
B)  $400 
C)  $160 
D)  $560 
A)  $200 
B)  $400 
C)  $160 
D)  $560

Question 14

Use the following two columns of items to answer the matching questions below:
-indemnity plan

Accepted Answer

A) a health care plan where individuals pay the provider and then seek reimbursement for expenses 
B) a prepaid health care plan using a limited number of health care providers 
C) a managed plan that allows a greater choice of health care providers 
A) a health care plan where individuals pay the provider and then seek reimbursement for expenses 
B) a prepaid health care plan using a limited number of health care providers 
C) a managed plan that allows a greater choice of health care providers

Question 15

Use the following two columns of items to answer the matching questions below:
-Medicare

Accepted Answer

A) federal program that provides health care to those over 65 who qualify for Social Security benefits 
B) a government program providing health care for those with low incomes or in need of public assistance 
A) federal program that provides health care to those over 65 who qualify for Social Security benefits 
B) a government program providing health care for those with low incomes or in need of public assistance

Question 16

Which of the following statements about an HMO is not true?

Accepted Answer

A)  You will pay the same monthly premium whether you use the plan or not. 
B)  You need to be referred to see a specialist or the HMO may not pay. 
C)  Individuals usually pay a small fee for a visit to a physician or for a prescription. 
D)  The health care providers are compensated on the basis of each visit by a patient. 
A)  You will pay the same monthly premium whether you use the plan or not. 
B)  You need to be referred to see a specialist or the HMO may not pay. 
C)  Individuals usually pay a small fee for a visit to a physician or for a prescription. 
D)  The health care providers are compensated on the basis of each visit by a patient.

Question 17

Basic health insurance policies and Medicare will not cover stays in nursing homes or assisted living centers for very long.

Accepted Answer

A) True 
 B)False

Question 18

An account that allows employees to use pre-tax income to pay for medical expenses is a

Accepted Answer

A)  HMO. 
B)  PPO. 
C)  flexible spending account. 
D)  medical savings account. 
A)  HMO. 
B)  PPO. 
C)  flexible spending account. 
D)  medical savings account.

Question 19

Use the following two columns of items to answer the matching questions below:
-PPO

Accepted Answer

A) a health care plan where individuals pay the provider and then seek reimbursement for expenses 
B) a prepaid health care plan using a limited number of health care providers 
C) a managed plan that allows a greater choice of health care providers 
A) a health care plan where individuals pay the provider and then seek reimbursement for expenses 
B) a prepaid health care plan using a limited number of health care providers 
C) a managed plan that allows a greater choice of health care providers

Question 20

Disability insurance would probably cost the most for which of the following people?

Accepted Answer

A)  A certified public accountant (CP
A)  
B)  An office worker 
C)  A construction worker 
D)  A telemarketer 
A)  A certified public accountant (CP
A)  
B)  An office worker 
C)  A construction worker 
D)  A telemarketer

Exam 12: Health and Disability Insurance

In addition to social security tax withholding,wage earners also pay a 1.45% withholding tax on all gross salary and wages for

Which of the following is an advantage of a PPO compared to an HMO?

Buying health insurance through employer-sponsored plans is somewhat more expensive than buying your own policy individually.

Disability insurance policies usually cover

Which statement regarding COBRA is true?

Usually plans such as dental insurance and vision insurance are good deals if they are offered through employers.

Which of the following is not true regarding employer disability insurance?

All of the following will lower the premium of long-term care insurance,except

One disadvantage of a flexible spending account is

Compared to indemnity plans,what is an advantage of managed health care plans?

Which one of the following benefits is most often available through an employer?

Which of the following is not true as it relates to the cost of health care?

How much of a $2,000 medical bill would you pay if your policy contains a $400 deductible and a 10% coinsurance clause?

Use the following two columns of items to answer the matching questions below: -indemnity plan

Use the following two columns of items to answer the matching questions below: -Medicare

Which of the following statements about an HMO is not true?

Basic health insurance policies and Medicare will not cover stays in nursing homes or assisted living centers for very long.

An account that allows employees to use pre-tax income to pay for medical expenses is a

Use the following two columns of items to answer the matching questions below: -PPO

Disability insurance would probably cost the most for which of the following people?

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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