Caveat Emptor Services, Inc., is a consulting firm that offers a service to employers that examines all medical work and charges. Caveat reviews the procedures done and the charges for the procedures. As necessary, Caveat obtains a second opinion about the medical procedures performed. Caveat is performing
c.a utilization review.
d.a medical services audit.
52.A system in which the employer makes contributions to each employee and the employee decides how to use this to cover his/her health-related expenses is called a/an ____ plan.
b.contributory health insurance
53.Which of the following statements is TRUE?
a.Mini-medical plans are most appealing to large companies with a high proportion of women employees.
b.These plans are popular with retirees who are working part-time because it supplements their Medicare coverage.
c.Mini-medical plans are inexpensive for the employer because the services provided are minimal and capped at a low level.
d.Mini-medical plans are becoming more popular because although they do not cover minor medical expenses, they do cover catastrophic illnesses or injuries.
54.Mark has four children under the age of 15. His wife has had a serious health problem that will keep her from working for the next few years. Mark’s employer, Megatherium Industries, has moved to a new health insurance plan which involves Megatherium making contributions to an account to which Mark can also make pre-tax contributions. Mark can spend the money in this account on health insurance. The insurance has an $11,600 deductible for Mark’s family, so he will be out of pocket over $11,000 before his health insurance coverage starts paying for his family’s care. Mark’s annual pre-tax salary is $80,000. Which of the following statements is TRUE?
a.This plan is illegal under federal laws requiring family health insurance be no more than 10% of the employee’s annual salary.
b.This is a typical Health Savings Account which is an effective way for Megatherium to reduce its overall health insurance expenditures.
c.This is a flexible spending account under Section 125 of the Internal Revenue Code..
d.Megatherium is using an HMO.
55.Which of the following statements is FALSE about Health Savings Accounts?
a.HSAs require participants to “use it or lose it” in that unused funds cannot be rolled over to the next year.
b.Individual employees can set aside pre-tax dollars for medical care thus reducing the cost of healthcare by their tax rate.
c.Both employers and employees can make contributions to HSAs.
d.HSAs have high annual deductibles which must be paid by the employee participants..
56.For employers, the cost advantages of defined-contribution health plans include all of the following EXCEPT
a.increases in health-care costs are shifted to employees.
b.employees must control their own health-care usage.
c.employer’s contributions are limited to a set amount.
d.unused funds in employee accounts roll back to the employer at the end of the year.
57.The main difference between health savings accounts (HSAs) and health reimbursement accounts (HRAs) is that
a.unused funds in HSAs cannot be rolled over to the next year by the employee.
b.all funds in HRAs are contributed by employers.
c.there are no deductibles under HSA plans, whereas HRA plans have high deductibles.
d.HSA funds can only be applied to certain “qualified medical expenses,” whereas there are fewer restrictions in HRAs.
58.As director of HR you are discussing cost pressures on the company with the CEO and the CFO. Two possible options are suggested: (1) eliminating raises for employees next year or (2) reducing the health benefits for employees. The CEO and CFO ask you which reduction will cause the most dissatisfaction among employees. You say that research has implied that
a.employees will be just as upset with either loss of raises or reduced health benefits.
b.employees will be more upset with loss of raises because cash raises can be spent in any manner, whereas health benefits may not even be used during the year.
c.employees will be more upset with reduced health benefits than by the loss of pay raises.
d.employees are so unaware of their health benefits, they won’t even notice reductions, whereas elimination of raises is a “high-visibility” change.
59.Which of the following individuals would NOT qualify for COBRA? All of these employers have more than 20 employees.
a.the 16-year old daughter of an employee of a medical products company who died of a massive stroke while on company business
b.the husband of an employee of a museum who has just taken early retirement
c.the secretary of a church congregation who has been laid off because of declining church income
d.an employee who quit a job with a movie theater chain
60.What are the requirements of the Consolidated Omnibus Budget Reconciliation Act (COBRA) with respect to health care?
a.Employers with more than 50 employees must provide medical insurance for all full-time employees.
b.Most employers with 20 or more employees must offer extended health-care coverage to employees after they leave the organization.
c.Employees on COBRA pay 2% more for health insurance than they paid before going on the COBRA plan.
d.Employers offering medical insurance cannot exclude pre-existing conditions from coverage.
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