Finance CH. 9 Quiz

Which of the following is true of the workers’ compensation insurance?a. Workers’ compensation insurance includes only rehabilitation expenses.b. Self-employed people pay lower premium to their employees for workers’ compensation insurance as compared to corporate employees.c. Workers’ compensation insurance compensates workers who are injured on the job or become ill through work-related causes.d. Compensation received from the insurance coverage is based on historical usage; employees who file the least claims pay the lowest premiums on the insurance coverage.e. Employers are required to bear half of the entire cost of workers’ compensation insurance. c. Workers’ compensation insurance compensates workers who are injured on the job or become ill through work-related causes.
Which of the following is true of long-term care insurance?a. There is no waiting period to receive the benefits.b. Many policies offer inflation protection riders for an additional premium.c. Most long-term-care insurance policies are non-renewable in nature.d. Long-term-care policies do not reimburse the insured for the cost of services incurred on a day-to-day basis.e. The maximum duration of benefits is only one year. b. Many policies offer inflation protection riders for an additional premium.
Disability income policies usually have a(n) _____, which is a time delay from the date of the issuance of the policy until benefit privileges are activated. probationary period waiting period internal limit period outer limit period elimination period probationary period
Which of the following statements is true of the health reimbursement account (HRA)?a. The employer’s contribution to the health reimbursement account is taxable.b. The amount of unused money in the health reimbursement account can be rolled over annually.c. The health reimbursement account balance is replenished by the insurance company when the account balance is used up.d. The premium amount for the insurance policy of dependents is reimbursed and deposited in a health reimbursement account by employer.e. The entire health care cost of employees is reimbursed and deposited in a health reimbursement account by the employer. b. The amount of unused money in the health reimbursement account can be rolled over annually.
Patrick’s monthly take-home pay is $5,000. His net worth is $125,000. He estimated that he would receive Social Security benefits worth $1,000 and company disability benefits $2,000 if he becomes disabled. The additional disability benefits that he needs to arrange for equals _____. $6,000 $5,000 $3,000 $7,000 $2,000 $2,000
One of the key goals of the Affordable Health Care Act of 2010 is:a. to tax workers for job-related illness or injury.b. to increase the amount of Social Security taxes.c. to underwrite the employee health care coverage on behalf of employers.d. to provide health care coverage to the employers employing less than 50 full-time employees.e. to reduce the number of uninsured citizens in the country. e. to reduce the number of uninsured citizens in the country.
You would have a better chance of choosing your own doctor with a preferred provider organizations (PPO) plan than with a health maintenance organizations (HMO) plan. true false True
When purchasing a long-term-care policy,a. the optional renewability provision is recommended b. the guaranteed renewability provision is recommended c. the non-renewability provision is recommended d. the automatic renewability at reduced premium is recommended b. the guaranteed renewability provision is recommended
A _____ is standard in disability income policies. deflation protection home insurance coverage noncancelable agreement long-term-care insurance waiver of premium waiver of premium
A good health insurance plan embodies more than financing medical expenses, lost income, replacement services; it incorporates a. flexibility in insurance premium payment on the lapse of the insurance policy b. means of risk reduction such as risk avoidance c. Social Security benefits d. lifetime limited dollar insurance coverage on pre-existing conditions b. means of risk reduction such as risk avoidance
Health Maintenance Organizations (HMOs) provide health care to participants without requiring them to file insurance claims. true false true
Michael’s estimated current monthly take-home pay is $4,500. His total existing monthly benefits is $2,950. Michael’s estimated monthly disability benefits is _____. $4,500 $7,450 $2,950 $550 $1,550 $1,550
Employees should consider risk assumption for certain health risks because:a. they would rather pay small amounts from savings than higher premiums to cover them.b. these are covered by Social Security.c. they need not look for ways to avoid exposure to risks before they occur.d. they are required to pay health care costs when their insurance coverage lapses.e. they will eliminate some or all of the factors from their lifestyle and reduce their chances of becoming ill. a. they would rather pay small amounts from savings than higher premiums to cover them.
A ________________ is a hybrid form of health maintenance organization (HMO) that allows members to go outside of the HMO network for care.a. Blue Cross/Blue Shield plan b. point-of-service (POS) plan c. traditional indemnity plan d. fee-for-service plan b. point-of-service (POS) plan
Disability income insurance will provide income to a disabled or ill persona. with unlimited funds for years b. without a waiting period c. with payments made to the recipient up to age 70 d. with a waiting period before income is received d. with a waiting period before income is received
Long-term care is a term used to describe _____.a. the coverage for a serious illness or accident that prevents an insured person from working for an extended periodb. an extended period of hospital stay due to a serious illness or accidentc. the inflation protection riders in the insurance policyd. compensation provided to the workers who are injured on the job or become ill through work-related causes.e. the delivery of medical care to persons with chronic medical conditions in a nursing home e. the delivery of medical care to persons with chronic medical conditions in a nursing home
Medicare and Medicaid covera. the balance between the actual medical cost and the coverage amount b. all the costs related to long-term care c. more than half of the total cost of long-term care d. less than half of the total cost of long-term care d. less than half of the total cost of long-term care
The Affordable Care Act (ACA) requires insurance companies to adhere to:a. the adjusted community rating approach for individuals and small businesses.b. the unadjusted community rating approach for SEC registered corporations.c. the modified community rating approach for SEC registered corporations.d. the cost-of-living adjustment (COLA) for individuals and small businesses.e. the pure community rating approach for individuals and small businesses. a. the adjusted community rating approach for individuals and small businesses.
_____________________ a health care plan that emphasizes cost control and preventive treatment.a. A supplementary medical insurance b. An indemnity plan c. A fee-for-service plan d. A managed care plan d. A managed care plan
In the pure community rating approach to health insurance premium pricing, all policyholders in an area pay:a. the premium as a contribution to a community pool of funds and utilize it on a need basis.b. a premium equal to the premium payable to the federal or state insurance exchange for a similar insurance policy.c. premiums at varied rates based on their health status or claims history.d. premiums based on their family size, where they live, whether they use tobacco, and their age.e. the same premium without regard to their personal health, age, or gender. e. the same premium without regard to their personal health, age, or gender.
In order to qualify for disability insurance under Social Security, a person must be:a. unable to carry out the duties of the current job.b. unable to carry out the duties of any job.c. unable to pay health insurance premium for more than 6 months.d. willing to undergo rehabilitation.e. ill for at least two years. b. unable to carry out the duties of any job.
Under the adjusted (modified) community rating approach to health insurance premium pricing, all policyholders in an area pay the same premium without regard to their personal health, age, gender, or other factors. false true false
An elimination period is the number of days that must pass before disability policies pay the benefits. true false true
Employers set up a salary reduction agreement with the employees if:a. employees are injured on the job or become ill through work-related causes.b. employees pay health care costs due to lapse of insurance coverage.c. employees do not look for ways to avoid exposure to health care loss before it occurs.d. employees need additional insurance benefits.e. employees pay hospitalization charges for the pre-existing conditions. d. employees need additional insurance benefits.
Funds for Medicare benefits come from:a. Social Security taxes paid by covered workers and their employers.b. the co-payment for health care services by the insured.c. the health care service organization.d. monthly payments by users directly to the health care service organization.e. the premiums paid by the employers for the employees. a. Social Security taxes paid by covered workers and their employers.
Medicare is a government-sponsored health care plan composed of Part A and Part B. Part B covers a. inpatient hospital services b. post-hospital medical services c. therapy, rehabilitation, and home health care d. imaging, laboratory tests, and prosthetic devices d. imaging, laboratory tests, and prosthetic devices
An insured individual’s right to continue a health insurance policy if he or she chooses is known as: co-insurance. benefits duration renewability. co-payment. policy exclusion. renewability.
Which of the following statements is true of the Affordable Health Care Act (ACA)?a. The ACA provides major medical insurance with low deductibles to protect against catastrophic illnesses.b. The ACA requires employers to reimburse the cost of hospital stay of the insured.c. The ACA eliminates lifetime limits on total health care insurance payments by insurers.d. The ACA decides the insurance payments for dependents.e. The ACA limits the total number of surgeries for the insurers. c. The ACA eliminates lifetime limits on total health care insurance payments by insurers.
A coordination of benefits provision in a health care policy ________________ by collecting benefits in multiple payments for health care.a. allows the collection of only 50 percent of covered charges b. prohibits collecting more than 100 percent of covered charges c. allows the collection of only 75 percent of covered charges d. prohibits collecting more than 80 percent of covered charges b. prohibits collecting more than 100 percent of covered charges
The average age of the American populationa. is increasing b. has been constant over the last three decades c. is decreasing d. is projected to be constant for the next three decades a. is increasing
Workers’ compensation insurance will make compensation payments to an injured worker _____.a. only if the worker has a take-home salary of $5,000 or moreb. only if his or her spouse is unemployedc. only if he cannot prove negligence on the part of his employerd. only if the worker has a minimum of four dependentse. only if he has been hurt on the job e. only if he has been hurt on the job
Living a healthy lifestyle is an example of loss prevention and control. true false True
Which of the following statements is true of medical insurance costs in the U.S.?a. Advances in medical technology have decreased the medical insurance costs.b. Increased regulation and decreased administrative costs have reduced the medical insurance costs in the U.S.c. A poor demand-and-supply distribution of health care facilities and services has increased the health care costs.d. The average annual premium for the aging U.S. population has increased by about 20% from 1999 to 2015.e. Due to the financial importance of health insurance, nearly 50 percent of the U.S. population has health insurance. c. A poor demand-and-supply distribution of health care facilities and services has increased the health care costs.
Some employers providing health insurance as an employee benefit offer only one plan and pay _____.a. either all or part of the health care insurance premiumsb. the entire cost of the additional insurance benefit desired by employeesc. the entire health care premium only for dependents of employeesd. the entire health care cost for employeese. the entire health care cost for dependents of employees a. either all or part of the health care insurance premiums
A _____________ covers the cost of visits to a doctor’s office or for a doctor’s hospital visits, including consultation with a specialist.a. regular medical expense insurance b. surgical expense insurance c. hospitalization insurance policy d. elective surgery insurance a. regular medical expense insurance

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