Deck 5: Employer-Sponsored Health-Care Plans

Question 1

Network model HMOs primarily use contracts with established practices of physicians that cover multiple specialties,but do not directly employ physicians.(Prepaid Group Practice Model)

Answer 1

False

Question 2

Preexisting condition clauses require physicians receive approval from a registered nurse or medical doctor employed by an insurance company before admitting patients to the hospital on a nonemergency basis.(Preexisting Condition Clauses)

Answer 2

False

Question 3

The National Association of Insurance Commissioners deals with state level issues relating to supervision of insurance.(State Regulations)

Answer 3

True

Question 4

Physicians that work in individual practice associations work out of their own facilities and work on HMO patients as well as the ones in their private practice.(Individual Practice Associations)

Question 5

In 2015,half of the private-sector workers in opposite-sex partnerships had access to health-care benefits.(Health-Care Coverage and Costs)

Question 6

Morbidity tables express annual probabilities of the occurrence of health problems.(Defining and Exploring Health-Care Plans)

Question 7

Exclusive provider organizations are similar to PPOs in that they offer reimbursement for services provided outside the established network.(Preferred Provider Organizations)

Question 8

Preadmission testing is offered under the inpatient hospitalization benefit of a health-care plan.(Hospitalization Benefits)

Question 9

Employers can offer health-care plans using fully insured or self-funded plans.(Defining and Exploring Health-Care Plans)

Question 10

A point-of-service plan requires the selection of a primary care physician,similar to HMOs.(Point-of-Service Plans)

Question 11

Individual health insurance coverage can also cover the employee's dependents.(Defining and Exploring Health-Care Plans)

Question 12

Most plans specify the maximum amount a policyholder must pay per calendar year or plan year,known as the out-of-pocket maximum provision.(Out-of-Pocket Maximum)

Question 13

Title XVIII of the Social Security Act established the Medicaid program.(Origins of Health-Care Benefits)

Question 14

Generally,health plans pay expenses according to a schedule of usual,customary and reasonable charges.(Surgical Benefits)

Question 15

Staff model HMOs own the medical facilities and employ the medical and support staffs that work on the premises.(Prepaid Group Practice Model)

Question 16

Coinsurance rates are generally higher in HMOs than in fee-for-service plans.(Features of Health-Care Plans)

Question 17

Health-care plans generally offer hospital expense,surgical expense and physician expense benefits.(Types of Medical Expense Benefits)

Question 18

There has been much controversy over the Patient Protection and Affordable Care Act with arguments focused on the individual mandate.(Patient Protection and Affordable Care Act of 2010)

Question 19

Formularies are lists of drugs proven to be clinically appropriate and cost effective.(Prescription Drug Benefits)

Question 20

Single employees pay a larger percentage of their health care premium than employees with family coverage pay.(Health-Care Coverage and Costs)

Question 21

IRC does not allow deductions for providing national health coverage.(Tax Regulations)

Question 22

Health insurance became part of the Social Security Act of 1935 during the Great Depression of the 1930s.(Origins of Health-Care Benefits)

Question 23

The Mental Health Parity Act,which plays a prominent role in establishing parity requirements for mental health plans,was enacted in 2003.(Regulation of Mental Health and Substance Abuse Plans)

Question 24

The network model compensates physicians using a fee schedule.(Prepaid Group Practice Model)

Question 25

Fee-for-service plans pay benefits on a reimbursement basis and they generally do not rely on networks of health-care providers.(Fee-For-Service Plans)

Question 26

The Patient Protection and Affordable Care Act distinguishes between health plans that existed prior to the enactment date (grandfathered plans)and those that come into existence afterward (non-grandfathered plans).(Patient Protection and Affordable Care Act of 2010)

Question 27

The Cadillac tax is due to take effect in 2020 but only applies to health-care plans within certain states.(Patient Protection and Affordable Care Act of 2010)

Question 28

Canada,as opposed to the US,has a single-payer health-care system.(Defining and Exploring Health-Care Plans)

Question 29

Plan providers use mortality tables and morbidity tables to determine the terms and premium amount,a decision-making process known as experience ratings.(Defining and Exploring Health-Care Plans)

Question 30

Under the employer mandate of the Patient Protection and Affordable Care Act,companies with at least 10 employees are required to offer affordable health insurance to its full-time employees.(Patient Protection and Affordable Care Act of 2010)

Question 31

In consumer-driven health care plans,the third tier is the difference between the amount of money in the individual's pretax account and the insurance plan's deductible amount.(Consumer-Driven Health Care)

Question 32

Flexible spending accounts permit employees to pay for health costs covered by an employer's insurance plan.(Consumer-Driven Health Care)

Question 33

A premium is the amount an employer pays to establish and maintain a health-care plans.(Defining and Exploring Health-Care Plans)
29.Company-sponsored care benefits appeared in the late 1800s for mining and railroad workers when companies hired doctors to provide medical services to employees.(Origins of Health-Care Benefits)

Question 34

Oftentimes,consumer-driven health care plans are referred to as two-tier payment systems.(Consumer-Driven Health Care)

Question 35

In consumer-driven health care plans,the first tier is a pretax account that allows employees to pay for services using pretax dollars.(Consumer-Driven Health Care)

Question 36

FAS 106 does not affect the amount of net profit companies list on balance sheets.(Retiree Health-Care Benefits)

Question 37

These indicate yearly probabilities of death based on such factors as age and sex.(Defining and Exploring Health-Care Plans)

A)Experience ratings
B)Formulary ratings
C)Mortality tables
D)Morbidity tables

Question 38

Most dental insurance covers cosmetic improvements.(Dental Insurance)

Question 39

Under the Patient Protection and Affordable Care Act,only employers are subject to monetary penalties for failure to provide or carry insurance coverage.(Patient Protection and Affordable Care Act of 2010)

Question 40

There is a variety of health-care plan design alternatives.The U.S.Bureau of Labor Statistics provides four questions to help distinguish among them.The first question to ask is: Does the plan have a designated network? (Health Plan Design Alternatives)

Question 41

This law sets minimum standards for the length of hospital stays for mothers and newborns.(Maternity Care)

A)Family and Medical Leave Act
B)Newborns' and Mothers' Health Protection Act
C)Pregnancy Discrimination Act
D)Newborns' and Mothers' Discrimination Act

Question 42

What are the three common forms of managed care plans? (Managed Care Plans)

A)Individual practice organizations,point-of-service plans,health maintenance organizations
B)Health maintenance organizations,preferred provider organizations,point-of-service plans
C)Preferred provider organizations,point-of-service plans,individual practice organizations
D)Preferred provider organizations,health maintenance organizations,individual practice organizations

Question 43

This type of group insurance plan is an arrangement made for employers with relatively small workforces.A single master trust holds each employer's contributions,and premiums are paid from the trust.(Exhibit 5.1,Types of Group Plans)

A)Voluntary employee beneficiary associations
B)Multiemployer plans
C)Pooled coverage
D)Multiple employer trust

Question 44

This federal law requires group health plans to provide medical and surgical benefits for mastectomies.(The Employee Retirement Income Security Act of 1974 (ERISA))

A)Women's Health and Cancer Rights Act
B)Health Insurance Portability and Accountability Act
C)Pregnancy Discrimination Act
D)Women with Disabilities Act

Question 45

What is coinsurance? (Coinsurance)

A)When both parents have employer-sponsored insurance coverage for their children
B)Two insurance companies combine to offer a group policy to an employer
C)The amount an employee has to pay out-of-pocket before the insurance kicks in
D)The percentage of covered expenses paid by the insured

Question 46

This prescription drug plan is usually associated with indemnity plans,pays benefits after the employee has met the deductible and tends to charge the most for filling the prescriptions.(Prescription Drug Benefits)

A)Drug prescription plan
B)Mail order prescription drug program
C)Medical reimbursement plan
D)Prescription card program

Question 47

These are the three main types of dental plans.(Types of Dental Plans)

A)Dental fee-for-service,dental savings accounts,dental maintenance organizations
B)Dental savings accounts,dental maintenance organizations,dental service plans
C)Dental preferred provider organizations,dental maintenance organizations,dental service corporations
D)Dental fee-for-service,dental service corporations,dental maintenance organizations

Question 48

These types of insurance plans are set up to cover things like dental care,vision care and prescription drugs (Other Health-Care-Related Benefits)

A)Flexible savings plans
B)Flexible services accounts
C)Carve-out plans
D)Health services accounts

Question 49

Medical care has risen about how much since 1984? (Health Insurance Coverage and Costs)

A)1224%
B)450%
C)220%
D)860%

Question 50

_____ pay medical service providers a fixed amount based on the number of people enrolled,regardless of services received.(Health Plan Design Alternatives)

A)Indemnity plans
B)Fee-for-service plans
C)Self-funded plans
D)Prepaid plans

Question 51

These types of insurance plans provide protection against health care expenses in the form of cash benefits paid to the insured or directly to the provider after the services are rendered.(Fee-For-Service Plans)

A)Point-of-service plans
B)Managed care plans
C)Fee-for-service plans
D)Health savings accounts

Question 52

Which of the following statements is true of health care costs? (Health-Care Coverage and Costs)

A)Many private-sector companies require employees to contribute a portion of health-care premiums because of their considerable cost.
B)The premiums for fully insured plans is likely to decrease.
C)The highest paid workers contribute the most towards the cost of their health insurance.
D)Employees contributed 42% of the cost for single coverage and 62% for family coverage.

Question 53

Which of the following does not fall within the scope of the role of a primary care physician? (Exhibit 5.4,Role of Primary Care Physicians)

A)Making initial diagnosis and evaluation of patient's condition
B)Identifying applicable treatment protocols and practice guidelines
C)Providing specialist diagnosis
D)Deciding what treatment is warranted

Question 54

This consumer-driven health care option contains contributions made by employers and the balance can be carried-over to the next year.(Consumer-Driven Health Care)

A)Flexible spending accounts
B)Health reimbursement arrangements
C)Health savings accounts
D)Flexible savings accounts

Question 55

State health instructor laws address all BUT which of the following (State Regulations)

A)Extending coverage to particular services,treatments or health conditions
B)Reimbursing recognized health-care providers for health care services
C)Employer's self-funded plans
D)Length of time coverage must be available to employees who terminate employment

Question 56

Health care premiums are quite high,often amounting to as much as ______ of annual benefits costs.(Health-Care Coverage and Costs)

A)one-quarter
B)one-third
C)one-half
D)three-quarters

Question 57

Which of the following is not true for medical reimbursement plans? (Prescription Drug Benefits)

A)Reimburses employees totally or partially
B)Usually associated with self-funded or independent indemnity plans
C)Deductibles must be met
D)Coinsurance usually 70%

Question 58

What are the three specific forms of prepaid group practices? (Prepaid Group Practice Model)

A)Universal model HMOs,group model HMOs,staff model HMOs
B)Group model HMOs,network model HMOs,universal model HMOs
C)Staff model HMOs,group model HMOs,network model HMOs
D)Network model HMOs universal model HMOs,staff model HMOs

Question 59

Companies can choose from which of the following ways to provide health-care coverage? (Defining and Exploring Health-Care Plans)

A)Fee-for-service plans,alternative managed care plans,consumer-driven health care plans
B)Indemnity plans,health savings accounts,fee-for-service plans
C)Point-of-service plans,fee-for-service plans,managed care plans
D)Self-funded plans,managed care plans,point-of-service plans

Question 60

This consumer-driven health care option allows employees to contribute pre-tax wages annually to pay for qualified medical expenses,but they will lose the balance not used at year's end.(Consumer-Driven Health Care)

A)Flexible spending accounts
B)Health reimbursement arrangements
C)Health savings accounts
D)Flexible savings accounts

Question 61

Discuss and compare multiple-payer versus single-payer systems.(Defining and Exploring Health-Care Plans)

Question 62

Discuss consumer-driven health-care plans briefly.(Consumer-Driven Health Care)

Question 63

Discuss the various FASB rulings associated with retiree health insurance.(Retiree Health Care Benefits)

Question 64

FAS 106 does not do which of the following? (Retiree Health-Care Benefits)

A)requires that companies disclose substantial information about the economic value and costs of retiree health-care plans.
B)Reduces the amount of net profit companies list on balance sheets
C)Benefits such as health care coverage establish an exchange between the employer and employee
D)Post-retirement benefits are part of employee's compensation package
Essay Questions

Question 65

The prices for medical care services overall have increased more than 450% since 1984 (compared to a 237% increase for all goods and services purchased by consumers during the same period).Describe the factors which account for this much higher rate of increases in medical service costs.(Health-Care Coverage and Costs)

Question 66

Briefly discuss how insurers determine premiums.(Defining and Exploring Health-Care Plans)