FIN 428 WEEK 4 Week 4 Quiz

FIN 428 WEEK 4 Week 4 Quiz Buy Solutions: https://goo.gl/W1pKS2 FIN 428 WEEK 4 Week 4 Quiz FIN 428 WEEK 4 Week 4 Quiz FIN 428 WEEK 4 Week 4 Quiz FIN 428 Week 4 Quiz The group that pays the largest share of health care costs in the United States is • • private insurance companies. • • private employers. In attempting to deal with the problem of over-insurance, companies writing disability income insurance • may charge documentation higher fees than other providers in the area. • may include a non-cancellation provision. • may include a facility of payment clause. • may restrict the amount of coverage offered to individuals Which of the following is a characteristic of Medicare Supplement policies? • Coverage for Medicare cost-sharing features will not automatically change with Medicare deductibles and coinsurance. • Policies cannot be guaranteed a renewal. • Policies may not impose a waiting period on preexisting conditions. • Policies cannot exclude preexisting conditions. Although Social Security provides benefits in the event of a worker’s disability • coverage qualification requirements are demanding. • coverage is provided for disabilities that are short-term only. • coverage is subject to a one-week waiting period. • coverage decreases based on the number of work-related claims. Which of the following types of pension plans are employers required to insure with the Pension Benefit Guarantee Corporation? • Defined benefit plans • Defined benefit and defined contribution plans • Single employer plans • Defined contribution plans A business valued at $600,000 has four partners. If each partner buys $50,000 of life insurance on each of the other partners, this arrangement is known as • a shared interest plan. • an insurable interest plan. • an entity plan. • a cross-purchase plan. The beneficiary under key person life insurance normally is the • the employer. • estate of the insured. • key person. • key person’s spouse. The change of occupation provision used in individual health insurance contracts • is one of the mandatory uniform provisions. • forbids the changing of occupations. • provides for a return of premium if a new occupation is less hazardous and an adjustment of benefits if it is more hazardous. • forbids the changing of occupations. When a deposit administration plan is used to fund a qualified retirement plan • a single premium annuity is purchased for each worker at retirement. • the insurer guarantees the adequacy of funds to meet accrued liabilities. • the insurer guarantees the benefits to retired workers for whom annuities have been purchased. • contributions are not allocated to specific workers until they retire. Medicare Advantage • is intended to increase Medicare costs and coverage. • is an attempt reduce Medicaid market competition. • brought uniformity to Medicare prescription drug coverage plans and coverage. • has been referred to as the “privatization of Medicare”. A preferred provider organization • is a group of health care providers designated by an employer or insurer. • usually charges higher fees than other providers in the area. • is a health insurer selected by a group of physicians. • is an insurer approved by the state commissioner of insurance. Fee-for-service health insurance coverage • is not subject to regulation. • is of increasing in importance. • is being replaced by managed care plans. • has been in beneficial outcomes such as the overutilization of health care. From the perspective of the subscriber, a major disadvantage of health maintenance organizations is • the absence of a gatekeeper. • the inability to use providers outside the system except in emergencies. • the absence of coverage for outpatient services. • are not subject to regulation. As a result of the U.S. Supreme Court decision in John Hancock Mutual Life Insurance Company v. Harris Trust & Savings Bank (Harris Trust) • the court ruled all funds held by Hancock in connection with the general account group policy issued to Harris Trust should be treated as assets for ERISA purposes. • insurer pension funding products were not redesigned. • insurer pension funding arrangements are all exempt from ERISA fiduciary requirements. • general account assets of insurers can sometimes be treated as pension assets. Consumer-driven health care • encourages preventive care. • limits out-of-pocket costs to relatively low levels. • is evident in the design of high deductible health plans and health savings accounts. • relies on insurers to control utilization and costs. The beneficiary under a split-dollar life insurance policy normally is the • the estate of the insured. • the key employee’s spouse. • the employer. • the key employee’s beneficiary and the employer to the extent of their interests. The elimination period in disability income contracts performs the same function as • a facility of payment clause. • a waiver of premium clause. • an incontestable clause. • a deductible. An approach an employer could use to de-risk its pension plan includes • continuing to offering traditional pension plans to employees. • an increase in exposure to risky equities in pension portfolios. • a refusal to consider pension buy-out offers. • a longevity swap. The group that pays the largest share of health care costs in the United States is • • • private employers. • private insurance companies. Disability income insurance • is sold only on a group basis. • should be purchased with as short a waiting period as possible. • is less important than life insurance because the probability of death at most ages is greater. • is often overlooked in income protection planning. The major difference between noncancelable health insurance contracts and guaranteed renewable contracts is that • noncancelable policies cannot be cancelled in mid-term. • noncancelable policies are not guaranteed renewable. • total disability benefits are more liberal. • the premium for noncancelable policies cannot be changed. Long-term care partnership programs • allow individuals to protect some of their assets from Medicaid spend-down requirements. • must provide more generous benefits than TQ-LTCI. • have demonstrated an ability to reduce Medicaid costs over the long-term. • must include inflation protection in all policies. Under a basic split dollar insurance plan the employer pays: • the part of the premium equal to the increase in cash value during the policy year. • • one half of all premiums due. • the portion of the premium equal to the cost of the decreasing term insurance for the policy year. The capitation approach to charging for health care benefits is characteristic of • preferred provider organizations. • Blue Cross and Blue Shield organizations. • point of service plans. • health maintenance organization. Which of the following is true with respect to State Children’s Health Insurance Programs? • States receive federal funding to support the programs. • They were created to insure children that qualify for Medicaid. • Coverage also extends to the guardians of the insured child. • Eligibility requirements vary by state. The Medicaid program • has uniform national eligibility requirements established by the federal government. • is completely funded by the federal government. • is completely funded by the state government. • is a federal-state program that provides medical assistance to low-income individuals. The Social Insurance Supplement Benefit • permits one to coordinate disability insurance with social security benefits. • is a mandatory provision under most state laws. • is designed for those occupations not covered by OASDI. • is designed to cover the five-month waiting period under Social Security. When a physician refuses to accept assignment under Medicare • the beneficiary may have additional out-of-pocket expenses. • he or she is barred from participating in Medicare for two years. • neither the physician nor the beneficiary can collect from Medicare. • there is no limit on the amount the physician may charge a Medicare beneficiary. Which of the following is true with respect to Medicare Prescription Drug Coverage? • It brought uniformity to Medicare prescription drug coverage plans and coverage. • It offered only as a stand-alone Prescription Drug Plan. • It is offered as part of a Medicare Advantage Plan only. • It may be offered as part of a Medicare Advantage Plan or through a stand-alone Prescription Drug Plan. The part of Medicare that is designed to pay for hospital expenses, but excludes physician’s charges is • Medicare Part B. • Medicare Part A. • Medicare Part D. • Medicare Part C. Under a health savings account • contributions by individuals are tax deductible up to a limit. • distributions for medical expenses are nontaxable to the extent they exceed contributions. • investment income is taxable on an annual basis. • distributions to pay qualified medical expenses are taxable as income, but deductible as medical expenses to the extent that they exceed 7.5% of adjusted gross income. The Pension Protection Act of 2006 • was enacted in response to concerns about the funding status of defined benefit pension plans and PBGC losses. • decreased PBGC premiums. • requires employers to amortize their unfunded liabilities over a longer period than before. • disallows direct deposit of income tax refunds from the IRS into an IRA. A disability income insurance policy on which premiums are paid weekly must have a grace period of at least • ten days. • thirty-one days. • there is no grace period on weekly premium policies. • seven days. Health Maintenance Organizations differ from commercial insurers in that they • also provide health care. • operate in the same manner as Blue Cross Organizations. • are not subject to regulation. • are owned by the participating subscribers. Benefits paid under tax-qualified long-term care insurance • are taxable as income unless paid by as part of an employee benefit plan. • are exempt from federal income tax. • are taxable as income, but deductible as medical expenses. • are excludable from taxable income up to a specified daily limit or up to the costs actually incurred for long-term care. The chance of being disabled is • less than the chance of death at any age. • less than the chance of death during middle ages. • greater than the chance of death during working years. • about the same as the chance of death. Which of the following is an option under Medicare Advantage? • Long-term care coverage • Private free-for-service plans • Short-term care coverage • Nonpreferred provider organizations An arrangement under which an employee and employer share the premium cost of an insurance policy on the life of the employee is called a • deferred compensation plan. • split-dollar plan. • shared interest agreement. • cross-purchase agreement. When home care benefits are included in a long-term care insurance policy • home care benefits are usually subject to a requirement that the insured was previously confined in a skilled nursing facility. • coverage may also include personal care services like bathing, dressing, and grooming. • coverage applies only to home care workers certified by Medicare. • home care benefits are provided only if the insured has been hospitalized. The Residual Disability Benefit used in some disability income contracts • typically pays benefits for a six-month period. • provides a monthly indemnity equal to one-half the total disability benefit. • determines indemnity based on the percentage of income lost. • typically pays benefits for a six-month period. V031618 FIN 428 WEEK 4 Week 4 Quiz