Life & Health Insurance Health Insurance Fundamentals Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance Health Insurance Fundamentals flashcards as text
Which type of health savings account can only be used with a High Deductible Health Plan (HDHP)?
Answer: HSA
An HSA (Health Savings Account) is only available to individuals enrolled in a qualified HDHP and offers triple tax advantages.
What is the term for the list of prescription drugs covered by a health insurance plan?
Answer: Formulary
A formulary is the plan's list of covered prescription drugs, typically organized into tiers that determine the member's cost-sharing level.
An insured receives a bill for $1,000 after the deductible is met. The policy has an 80/20 coinsurance clause with a $2,000 out-of-pocket max already half-met. How much does the insured owe?
Answer: $200
With an 80/20 coinsurance split, the insured pays 20% of $1,000, which equals $200, assuming the out-of-pocket max has not yet been fully reached.
Which health insurance provision prevents an insurer from reducing or denying a claim on the grounds that an application contained a misstatement after the policy has been in force for two years?
Answer: Incontestability clause
The incontestability clause bars the insurer from contesting the policy based on misstatements in the application after the policy has been in force for a specified period, typically two years.
What distinguishes an Exclusive Provider Organization (EPO) from a PPO?
Answer: EPOs do not cover out-of-network care except in emergencies; PPOs do at higher cost
An EPO restricts coverage to in-network providers (except emergencies), while a PPO allows out-of-network use with higher cost-sharing.
A blanket health policy is most commonly used to cover:
Answer: Members of a group whose composition changes frequently, such as students or sports teams
Blanket policies cover a group of people exposed to the same risk without naming individuals, commonly used for school athletic teams, airline passengers, or camp participants.
Under the mental health parity law (MHPAEA), employer group health plans must ensure that mental health benefits are:
Answer: Equal to or more generous than medical/surgical benefits in financial requirements and treatment limits
MHPAEA requires that financial requirements and treatment limitations for mental health/substance use disorder benefits be no more restrictive than those applied to medical and surgical benefits.