Question 1

Maternity benefits are available as a rider, or optional coverage, in group insurance, but they cannot be optional in individual policies.

Accepted Answer

Maternity benefits can be available as an optional rider in both group and individual insurance policies, depending on the insurance provider and the policy structure. Insurers may offer maternity benefits as an add-on or included coverage in individual policies as well.

Question 2

Health maintenance organizations are cheaper than preferred provider organizations and health maintenance organizations with open access.

Accepted Answer

False

Question 3

A major criticism of health maintenance organizations is the limited choice of providers for subscribers.

Accepted Answer

Health Maintenance Organizations (HMOs) typically require members to choose healthcare providers from within a defined network, limiting the choice of providers available to subscribers.

Question 4

Maternity coverage is excluded in group medical expense insurance policies.

Accepted Answer

Group medical expense insurance policies typically include maternity coverage as part of the benefits provided to members, often due to regulatory requirements.

Question 5

If the health maintenance organization providers overtreat subscribers, they receive extra money.

Accepted Answer

Health Maintenance Organizations (HMOs) typically receive a fixed payment for each subscriber, incentivizing cost-effective care rather than overtreatment, as payments are not based on the quantity of services provided.

Question 6

A group plan that does not include a coordination of benefits provision is considered the secondary insurer by all insurers that have such provisions.

Accepted Answer

A coordination of benefits provision is used to determine the order in which multiple insurance plans pay. Without this provision, there's no automatic assumption that the plan is secondary; the determination depends on the specific rules of the other insurers involved.

Question 7

In group insurance, the benefit period is usually a calendar year.

Accepted Answer

In group insurance, the benefit period often aligns with the calendar year, resetting benefits and deductibles on January 1st.

Question 8

Like most preferred provider organizations, health maintenance organizations give employees and their dependents a broad choice of providers.

Accepted Answer

Health Maintenance Organizations (HMOs) typically restrict choices to a list of preferred providers and facilities, unlike Preferred Provider Organizations (PPOs) which offer a broader choice of providers.

Question 9

Unlike sick leave, short-term disability income plans do not have the restriction of elimination period to pay benefits to employees.

Accepted Answer

Short-term disability income plans often have an elimination period, which is a waiting period from the onset of disability before benefits begin to be paid, unlike some sick leave policies that may pay out immediately.

Question 10

The consumer-driven health plans and high-deductible health plans intend to transform the defined contribution plans approach to health insurance into defined benefits as part of an ownership society paradigm.

Accepted Answer

Consumer-driven health plans and high-deductible health plans aim to shift more financial responsibility to consumers, encouraging them to make more informed health care decisions. This approach maintains a defined contribution model rather than transforming it into a defined benefits model.

Question 11

With major medical policies, the insured pays most of the cost for medical services.

Accepted Answer

With major medical policies, the insurance company pays a significant portion of the cost for medical services after the insured meets the deductible, with the insured typically responsible for co-payments or coinsurance.

Question 12

Medical savings accounts were used for individuals and large employers only and were not available to small employers or the self-employed.

Accepted Answer

Medical savings accounts, which evolved into Health Savings Accounts (HSAs), were designed to help individuals, including the self-employed and employees of small employers, save for medical expenses on a tax-advantaged basis.

Question 13

Second surgical opinions require that two surgeons agree that surgery needs to be done before the insurer will pay for the procedure.

Accepted Answer

Second surgical opinions are often encouraged or required by insurers to confirm the necessity of a procedure, but they do not always require both surgeons to agree on the need for surgery before agreeing to pay for the procedure.

Question 14

When a child is insured under both parents' plans, the policy of the parent whose birthday falls first in the year is the primary policy.

Accepted Answer

This is known as the "birthday rule" in insurance coordination of benefits, where the health plan of the parent whose birthday (month and day, not year) comes first in the calendar year is considered the primary plan for the children.

Question 15

Contribution to a health savings account can be made by the employer or the individual, or both.If made by the employer, the contribution is not taxable to the employee.If it is made by the individual, it is a before-tax contribution.

Accepted Answer

Employer contributions to a Health Savings Account (HSA) are not included in the employee's income, making them non-taxable. Contributions made by an individual can be deducted from their gross income, effectively making them before-tax contributions.

Question 16

In managed care, capitation is a set amount paid to each health care provider based on the number of subscribers in the provider's plan.

Accepted Answer

Capitation is a payment arrangement in managed care systems where health care providers are paid a set amount for each enrolled person assigned to them, regardless of whether that person seeks care.

Question 17

Dental policies not only cover routine care but also protect insureds against more expensive procedures such as restorative services.

Accepted Answer

Dental policies typically cover a range of services from routine care like cleanings and exams to more expensive procedures such as fillings, crowns, and other restorative services, helping to mitigate the financial burden of dental health maintenance and unexpected dental issues.

Question 18

The doctors in an individual practice association can see both health maintenance organization and non- health maintenance organization patients.

Accepted Answer

Doctors in an Individual Practice Association (IPA) can see both HMO (Health Maintenance Organization) patients and non-HMO patients because they operate in a network model that allows them to maintain their own practices and see a broader range of patients.

Question 19

Health maintenance organizations cover routine checkups even when the employee is not ill.

Accepted Answer

Health Maintenance Organizations (HMOs) typically cover preventive services like routine checkups to promote overall health and prevent diseases, even if the individual is not currently ill.

Question 20

Extended care facilities provide basic medical care needed during some recoveries, rather than the intensive and more expensive medical service of a hospital.

Accepted Answer

Extended care facilities are designed to offer medical care and support for individuals who are recovering from illness, injury, or surgery but do not require the intensive and costly services provided by hospitals.

Quiz 22: Employment and Individual Health Risk Management