State: Ohio | Category: Health Insurance | All tests in this Category:
Practice Test 1 Practice Test 21. Which is a primary responsibility of a gatekeeper in a managed care plan?
Gatekeepers coordinate care by approving referrals and ensuring appropriate utilization. The other options describe roles outside the gatekeeper function.
2. What is moral hazard in health insurance?
Moral hazard occurs when being protected by insurance leads to riskier behavior or higher usage of services.
3. If a critical illness policy lapses and is later reinstated, what is commonly required?
Lapsed policies may be reinstated, but typical terms require evidence of insurability and payment of any back premiums; a new waiting period may apply.
4. Which statement best describes the tax treatment of benefits paid under a qualified long-term care (LTC) insurance contract when they are used to pay for qualified LTC services?
Qualified LTC benefits used for qualified LTC services are generally excluded from gross income, meaning they are tax-free for the recipient.
5. If LTC benefits are used to pay for both qualified and non-qualified expenses, how are the benefits taxed?
Benefits used for qualified LTC services are generally tax-free, while amounts used for non-qualified expenses are taxable.
6. What does the parol evidence rule generally prohibit when interpreting a health insurance policy?
The parol evidence rule bars extrinsic oral or written statements that would modify or contradict the written contract.
7. Which concept describes the insurer's right to contest or void a policy for misstatements or concealment during the policy's early years?
Contestability allows the insurer to challenge or void the contract for misstatements or concealment within a specified period, typically the first two years.
8. Do most hospital indemnity policies require proof of confinement to trigger benefits?
Benefits are typically triggered by verifiable confinement, supported by hospital records.
9. Which document is primarily considered to govern the insurer-insured relationship in a health insurance contract?
The policy and attached riders constitute the primary governing document, along with any endorsements, that define coverage and obligations.
10. Who is responsible for providing and delivering the COBRA election and general rights notices to qualified beneficiaries?
The plan administrator is typically responsible for distributing COBRA notices, including the election notice and general rights notice.
11. A plan that includes both per-claim stop-loss and per-year stop-loss limits is describing:
Stop-loss protections limit out-of-pocket costs either per claim (per-claim) or for the policy year (per-year).
12. For group health plans, Ohio requires notice of which federal rights to beneficiaries?
COBRA rights must be provided to eligible employees and dependents to ensure continuity of coverage after qualifying events.
13. Which of the following is most commonly excluded or limited in many critical illness policies?
A common exclusion is coverage for pre-existing conditions during an initial waiting period. Some policies also exclude non-listed conditions or apply limits on certain illnesses.
14. How does a critical illness policy define covered illnesses?
CI policies define coverage by listing specific illnesses on the policy. If an illness is not listed, it is typically not covered unless the policy states otherwise.
15. During open enrollment, enrollment in a major medical policy typically occurs without:
Open enrollment typically allows enrollment without individual medical underwriting, though some plans may still apply guaranteed issue rules in certain markets.
16. For a premium paid for a long-term care insurance policy to be deductible as a medical expense, which condition must be met?
Only premiums paid for a qualified LTC insurance contract may be deductible as medical expenses, subject to the medical expense deduction threshold.
17. True or False: Ohio requires a Certificate of Creditable Coverage to facilitate HIPAA portability when an individual transitions between health plans.
A Certificate of Creditable Coverage (or equivalent prior coverage statement) helps avoid pre-existing condition exclusions when moving to a new plan, consistent with HIPAA portability requirements.
18. Which statement correctly describes a copayment?
A copayment is a fixed amount due at the time of service (e.g., $20 for a doctor visit). Coinsurance, by contrast, is a percentage of the allowed charge after any applicable deductible.
19. If an Ohio health insurer discovers a material misrepresentation on an application, what right does the insurer typically retain?
Material misrepresentations can be grounds for rescission or denial of coverage because they affect the insurer’s risk assessment.
20. What distinguishes a Health Maintenance Organization (HMO) from a Preferred Provider Organization (PPO) regarding gatekeeping?
HMOs typically require a gatekeeper (PCP) and referrals for specialty care, while PPOs generally offer more open access to specialists without mandatory referrals. The other options misstate the typical gatekeeping practices.
21. Open enrollment is important because
Open enrollment allows selection of coverage without underwriting and enables changes due to life events that affect needs and costs.
22. Ohio forms used in health insurance must include which producer-related information on the policy or related disclosures?
Disclosures should include the producer’s name, agency, and license number to ensure accountability and traceability of the sale.
23. Which provision provides vocational rehabilitation or retraining to help the insured return to work?
Rehabilitation benefits cover retraining or other services to help the insured re-enter the workforce.
24. If a health insurance policy lapses, what is required for reinstatement according to typical policy provisions?
Reinstatement usually requires a new application, evidence of insurability, and payment of overdue premiums (often with interest) within a defined reinstatement period (commonly up to 3 years).