EXAMFX Health Insurance 2 — Questions and Answers
Question 1: Under HIPAA, a pre-existing condition exclusion period for a new group health plan is limited to a maximum of how many months?
- 6 months
- 12 months (Correct answer)
- 18 months
- 24 months
Correct answer: 12 months
HIPAA limits pre-existing condition exclusion periods to 12 months (18 months for late enrollees) for group health plans.
Question 2: A health insurance policy that pays a fixed dollar amount per day of hospitalization, regardless of actual expenses, is called a:
- Major medical policy
- Hospital indemnity policy (Correct answer)
- Comprehensive policy
- Basic surgical policy
Correct answer: Hospital indemnity policy
A hospital indemnity policy pays a predetermined flat daily benefit regardless of actual hospital charges.
Question 3: Which provision in a health insurance policy allows the insured to continue coverage after leaving a group plan by converting to an individual policy without proving insurability?
- Waiver of premium provision
- Conversion privilege (Correct answer)
- Continuation provision
- Reinstatement clause
Correct answer: Conversion privilege
The conversion privilege allows a departing group member to obtain individual coverage without a medical exam or evidence of insurability.
Question 4: An HMO that employs physicians directly and provides services at HMO-owned facilities uses which model?
- IPA model
- Group model
- Staff model (Correct answer)
- Network model
Correct answer: Staff model
The staff model HMO employs physicians as salaried staff who work exclusively at HMO-owned facilities.
Question 5: The 'free-look' period required for individual health insurance policies in most states is typically:
- 5 days
- 10 days (Correct answer)
- 20 days
- 30 days
Correct answer: 10 days
Most states require a 10-day free-look period allowing the insured to return the policy for a full premium refund.
Question 6: A UCR (Usual, Customary, and Reasonable) charge limit in a health insurance plan is used to:
- Set the insured's annual deductible
- Cap the benefit paid for a service based on prevailing area rates (Correct answer)
- Define the out-of-pocket maximum
- Determine coinsurance percentages
Correct answer: Cap the benefit paid for a service based on prevailing area rates
UCR limits restrict reimbursement to the standard charge for a service in a geographic area, and the insured pays any amount above that.
Question 7: Under a group health plan, the COBRA continuation period for a covered employee who is laid off is generally:
- 6 months
- 12 months
- 18 months (Correct answer)
- 36 months
Correct answer: 18 months
Involuntary termination of employment or reduction in hours triggers an 18-month COBRA continuation period.
EXAMFX Health Insurance 2
Under HIPAA, a pre-existing condition exclusion period for a new group health plan is limited to a maximum of how many months?