Employee Benefits 5th Edition by Martocchio - Test Bank

Employee Benefits 5th Edition by Martocchio – Test Bank

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Sample Questions Are Posted Below

5
Student: ___________________________________________________________________________
1. Comprehensive major medical plans usually apply a single deductible for all covered services. (Major
Medical Insurance Plans: Supplemental and Comprehensive)
True False
2. Staff model HMOs own the medical facilities and employ the medical and support staffs that work on the
premises. (Prepaid Group Practice Model)
True False
3. Formularies are lists of drugs proven to be clinically appropriate and cost effective. (Prescription Drug
Benefits)
True False
4. Morbidity tables express annual probabilities of the occurrence of health problems. (Individual versus
Group Insurance Coverage)
True False
5. Individual health insurance coverage can also cover the employee’s dependents. (Individual Versus Group
Insurance Coverage)
True False
6. Exclusive provider organizations are similar to PPOs in that they offer reimbursement for services
provided outside the established network. (Preferred Provider Organizations)
True False
7. Fee-for-service plans pay expenses according to a schedule of usual, customary and reasonable charges.
(Surgical Benefits)
True False
8. Fee-for-service plans generally offer hospital expense, surgical expense and physician expense benefits.
(Types of Medical Expense Benefits)
True False
9. Physicians that work in individual practice associations work out of their own facilities and work on
HMO patients as well as the ones in their private practice. (Individual Practice Associations)
True False
10. In 2011, half of the private sector workers in opposite sex partnerships had access to health care benefits.
(Health Insurance Coverage)
True False
11. Single employees pay a larger percentage of their health care premium than employees with family
coverage pay. (Health Insurance Coverage and Costs)
True False
12. Preexisting condition clauses usually span between one and two years. (Preexisting Condition Clauses)
True False
13. Title XVIII of the Social Security Act established the Medicaid program. (Origins of Health Insurance
Benefits)
True False
14. The assets of health savings accounts must be held in trust and cannot be subject to forfeiture.
(Consumer-Driven Health Care)
True False
15. Preadmission testing is offered under the in-patient hospitalization benefit of a fee-for-service.
(Hospitalization Benefits)
True False
16. Coinsurance rates are generally higher in HMOs than in fee-for-service plans. (Features of Health
Maintenance Organizations)
True False
17. Companies must offer HMOs if they are subject to the minimum wage provisions of FSLA. (The Health
Maintenance Organization Act of 1973)
True False
18. Network model HMOs primarily use contracts with established practices of physicians that cover
multiple specialties, but do not directly employ physicians. (Prepaid Group Practice Model)
True False
19. The National Association of Insurance Commissioners deals with state level issues relating to supervision
of insurance. (State Regulations)
True False
20. Some of the major impacts of the PPACA provisions include changes to health plan provisions such as
the elimination of lifetime dollar limits on insurance coverage and designating a set of essential benefits.
(Patient Protection and Affordable Care Act of 2010)
True False
21. President Bush has advanced a plan to place the burden of health insurance costs with the government.
(Consumer-Driven Health Care)
True False
22. Canada, as opposed to the US, has a single-payer health care system. (Defining and Exploring Health
Insurance Programs)
True False
23. Health insurance became part of the Social Security Act of 1935 during the Great depression of the
1930s. (Origins of Health Insurance Benefits)
True False
24. Employee costs for health care services tend to be least with managed care plans, higher costs are
associated with the consumer driven health plans and even higher costs are associated with fee-for-
service plans. (State Regulations)
True False
25. The network model compensates physicians using a fee schedule. (Prepaid Group Practice Model)
True False
26. Most dental insurance covers cosmetic improvements. (Dental Insurance)
True False
27. Flexible spending accounts permit employees to pay for health costs covered by an employer’s insurance
plan. (Consumer-Driven Health Care)
True False
28. A premium is the amount an employer pays to establish and maintain a health insurance policy. (Defining
and Exploring Health Insurance Programs)
True False
29. Company-sponsored insurance benefits appeared in the late 1800s for mining and railroad workers when
companies hired doctors to provide medical services to employees. (Origins of Health Insurance Benefits)
True False
30. Union presence does not affect access to health insurance. (Origins of Health Insurance Benefits)
True False
31. IRC does not allow deductions for providing national health coverage. (Tax Regulations)
True False
32. FASB 106 does not affect the amount of net profit companies list on balance sheets. (Retiree Health Care
Benefits)
True False
33. Oftentimes, consumer-driven health care plans are referred to as two-tier payment systems. (Consumer-
Driven Health Care)
True False
34. In consumer-driven health care plans, the first tier is a pretax account that allows employees to pay for
services using pretax dollars. (Consumer-Driven Health Care)
True False
35. In consumer-driven health care plans, the third tier is the difference between the amount of money in the
individual’s pretax account and the insurance plan’s deductible amount. (Consumer-Driven Health Care)
True False
36. The Mental Health Parity Act, which plays a prominent role in establishing parity requirements for
mental health plans, was enacted in 2003. (Regulation of Mental Health and Substance Abuse Plans)
True False
37. These indicate yearly probabilities of death based on such factors as age and sex. (Individual Versus
Group Insurance Coverage)
A. Experience ratings
B. Formulary ratings
C. Mortality tables
D. Morbidity tables
38. What are the three common forms of managed care plans? (Managed Care Plans)
A. Individual practice organizations, point-of-service plans, health maintenance organizations
B. Health maintenance organizations, preferred provider organizations, point-of-service plans
C. Preferred provider organizations, point-of-service plans, individual practice organizations
D. Preferred provider organizations, health maintenance organizations, individual practice organizations
39. This federal law requires group health plans to provide medical and surgical benefits for mastectomies.
(The Employee Retirement Income Security Act of 1974 (ERISA))
A. Women’s Health and Cancer Rights Act
B. Health Insurance Portability and Accountability Act
C. Pregnancy Discrimination Act
D. Women with Disabilities Act
40. This consumer-driven health care option allows employees to contribute pre-tax wages annually to pay
for qualified medical expenses, but they will lose the balance not used at year’s end. (Consumer-Driven
Health Care)
A. Flexible spending accounts
B. Health reimbursement arrangements
C. Health savings accounts
D. Flexible savings accounts
41. These types of insurance plans provide protection against health care expenses in the form of cash
benefits paid to the insured or directly to the provider after the services are rendered. (Fee-For-Service
Plans)
A. Point-of-service plans
B. Managed care plans
C. Fee-for-service plans
D. Health savings accounts
42. This prescription drug plan is usually associated with indemnity plans, pays benefits after the employee
has met the deductible and tends to charge the most for filling the prescriptions. (Prescription Drug
Benefits)
A. Drug prescription plan
B. Mail order prescription drug program
C. Medical reimbursement plan
D. Prescription card program
43. Which of the following is not one of the ways PPACA is expected to extend coverage to more people?
(Patient Protection and Affordable Care Act of 2010)
A. By providing incentives to businesses to offer health insurance
B. By imposing penalties on businesses that do not provide coverage
C. By requiring individuals without health insurance to reasonably priced policies
D. By giving tax incentives to insurance companies
44. This law sets minimum standards for the length of hospital stays for mothers and newborns. (Maternity
Care)
A. Family and Medical Leave Act
B. Newborns’ and Mothers’ Health Protection Act
C. Pregnancy Discrimination Act
D. Newborns’ and Mothers’ Discrimination Act
45. What is coinsurance? (Features of Fee-For-Service Plans)
A. When both parents have employer-sponsored insurance coverage for their children
B. Two insurance companies combine to offer a group policy to an employer
C. The amount an employee has to pay out-of-pocket before the insurance kicks in
D. The percentage of covered expenses paid by the insured
46. Companies can choose from which four classes of health insurance programs? (Defining and Exploring
Health Insurance Programs)
A. Fee-for-service, managed care, point-of-service, consumer-driven health care
B. Indemnity, health savings accounts, managed care, fee-for-service
C. Point-of-service, fee-for-service, indemnity, managed care
D. Self-funded, managed care, fee-for-service, point-of-service
47. These types of insurance plans are set up to cover things like dental care, vision care and prescription
drugs. (Specialized Insurance Benefits)
A. Flexible savings plans
B. Flexible services accounts
C. Carve-out plans
D. Health services accounts
48. These are the most popular approaches used by employers to offer consumer-driven health care.
(Consumer-Driven Health Care)
A. Flexible savings accounts, health reimbursement arrangements
B. Health spending accounts, health reimbursement arrangements
C. Flexible spending accounts, health reimbursement arrangements
D. Health savings accounts, flexible spending accounts
49. What are the two types of fee-for-service plans? (Fee-For-Service Plans)
A. Health savings accounts, indemnity plans
B. Health savings accounts, health reimbursement plans
C. Health reimbursement plans, indemnity plans
D. Indemnity plans, self-funded plans
50. These are the three main types of dental plans. (Types of Dental Plans)
A. Dental fee-for-service, dental savings accounts, dental maintenance organizations
B. Dental savings accounts, dental maintenance organizations, dental service plans
C. Dental preferred provider organizations, dental maintenance organizations, dental service corporations
D. Dental fee-for-service, dental service corporations, dental maintenance organizations
51. This type of group insurance plan offers health insurance and other benefits to the employees of two
or more unaffiliated employers, except for any arrangements established by a collective bargaining
agreement. (Exhibit 5.2, Types of Group Plans)
A. Voluntary employee beneficiary associations
B. Multiple employer trusts
C. Pooled coverage
D. Multiple employer welfare arrangement
52. This consumer-driven health care option contains contributions made by employers and the balance can
be carried-over to the next year. (Consumer-Driven Health Care)
A. Flexible spending accounts
B. Health reimbursement arrangements
C. Health savings accounts
D. Flexible savings accounts
53. This type of medical plan acts as a backup to basic insurance by covering expenses that exceed maximum
benefit limits. (Major Medical Insurance Plans: Supplemental and Comprehensive)
A. Supplemental major medical plan
B. Comprehensive major medical plan
C. Network major medical plan
D. Uniform major medical plan
54. What are the three specific forms of prepaid group practices? (Prepaid Group Practice Model)
A. Universal model HMOs, group model HMOs, staff model HMOs
B. Group model HMOs, network model HMOs, universal model HMOs
C. Staff model HMOs, group model HMOs, network model HMOs
D. Network model HMOs universal model HMOs, staff model HMOs
55. State health instructor laws address all BUT which of the following. (State Regulations)
A. Extending coverage to particular services, treatments or health conditions
B. Reimbursing recognized health care providers for health care services
C. Employer’s self-funded plans
D. Length of time coverage
56. Medical care has risen about how much since 1984? (Health Insurance Coverage and Costs)
A. 1224%
B. 433%
C. 220%
D. 860%
57. Which of the following is not true for medical reimbursement plans? (Prescription Drug Benefits)
A. Reimburses employees totally or partially
B. Usually associated with self-funded or independent indemnity plans
C. Deductibles must be met
D. Coinsurance usually 70%
58. Which of the following does not fall within the scope of the role of a primary care physician? (Exhibit
5.6, Role of Primary Care Physicians)
A. Making initial diagnosis and evaluation of patient’s condition
B. Identifying applicable treatment protocols and practice guidelines
C. Providing specialist diagnosis
D. Deciding what treatment is warranted
59. FASB 106 does not do which of the following? (Retiree Health Care Benefits)
A
.
Held firm the method for how companies recognize the costs of non pension retirement benefits,
including health insurance, on financial balance sheets
B. Reduces the amount of net profit companies list on balance sheets
C. Benefits such as health care coverage establish an exchange between the employer and employee
D. Post-retirement benefits are part of employee’s compensation package
60. Discuss and compare multiple-payer versus single-payer systems the US. (Defining and Exploring Health
Insurance Programs)
61. Discuss consumer driven health care plans briefly. (Consumer-Driven Health Care)
62. Discuss the various FASB rulings associated with retiree health insurance. (Retiree Health Care Benefits)
5 Key
1. Comprehensive major medical plans usually apply a single deductible for all covered services. (Major
Medical Insurance Plans: Supplemental and Comprehensive)
TRUE
Martocchio – Chapter 05 #1
2. Staff model HMOs own the medical facilities and employ the medical and support staffs that work on
the premises. (Prepaid Group Practice Model)
TRUE
Martocchio – Chapter 05 #2
3. Formularies are lists of drugs proven to be clinically appropriate and cost effective. (Prescription Drug
Benefits)
TRUE
Martocchio – Chapter 05 #3
4. Morbidity tables express annual probabilities of the occurrence of health problems. (Individual versus
Group Insurance Coverage)
TRUE
Martocchio – Chapter 05 #4
5. Individual health insurance coverage can also cover the employee’s dependents. (Individual Versus
Group Insurance Coverage)
TRUE
Martocchio – Chapter 05 #5
6. Exclusive provider organizations are similar to PPOs in that they offer reimbursement for services
provided outside the established network. (Preferred Provider Organizations)
FALSE
Martocchio – Chapter 05 #6
7. Fee-for-service plans pay expenses according to a schedule of usual, customary and reasonable
charges. (Surgical Benefits)
TRUE
Martocchio – Chapter 05 #7
8. Fee-for-service plans generally offer hospital expense, surgical expense and physician expense
benefits. (Types of Medical Expense Benefits)
TRUE
Martocchio – Chapter 05 #8
9. Physicians that work in individual practice associations work out of their own facilities and work on
HMO patients as well as the ones in their private practice. (Individual Practice Associations)
TRUE
Martocchio – Chapter 05 #9
10. In 2011, half of the private sector workers in opposite sex partnerships had access to health care
benefits. (Health Insurance Coverage)
FALSE
Martocchio – Chapter 05 #10
11. Single employees pay a larger percentage of their health care premium than employees with family
coverage pay. (Health Insurance Coverage and Costs)
FALSE
Martocchio – Chapter 05 #11
12. Preexisting condition clauses usually span between one and two years. (Preexisting Condition
Clauses)
FALSE
Martocchio – Chapter 05 #12
13. Title XVIII of the Social Security Act established the Medicaid program. (Origins of Health Insurance
Benefits)
FALSE
Martocchio – Chapter 05 #13
14. The assets of health savings accounts must be held in trust and cannot be subject to forfeiture.
(Consumer-Driven Health Care)
TRUE
Martocchio – Chapter 05 #14
15. Preadmission testing is offered under the in-patient hospitalization benefit of a fee-for-service.
(Hospitalization Benefits)
FALSE
Martocchio – Chapter 05 #15
16. Coinsurance rates are generally higher in HMOs than in fee-for-service plans. (Features of Health
Maintenance Organizations)
FALSE
Martocchio – Chapter 05 #16
17. Companies must offer HMOs if they are subject to the minimum wage provisions of FSLA. (The
Health Maintenance Organization Act of 1973)
TRUE
Martocchio – Chapter 05 #17
18. Network model HMOs primarily use contracts with established practices of physicians that cover
multiple specialties, but do not directly employ physicians. (Prepaid Group Practice Model)
FALSE
Martocchio – Chapter 05 #18
19. The National Association of Insurance Commissioners deals with state level issues relating to
supervision of insurance. (State Regulations)
TRUE
Martocchio – Chapter 05 #19
20. Some of the major impacts of the PPACA provisions include changes to health plan provisions such
as the elimination of lifetime dollar limits on insurance coverage and designating a set of essential
benefits. (Patient Protection and Affordable Care Act of 2010)
TRUE
Martocchio – Chapter 05 #20
21. President Bush has advanced a plan to place the burden of health insurance costs with the government.
(Consumer-Driven Health Care)
FALSE
Martocchio – Chapter 05 #21
22. Canada, as opposed to the US, has a single-payer health care system. (Defining and Exploring Health
Insurance Programs)
TRUE
Martocchio – Chapter 05 #22
23. Health insurance became part of the Social Security Act of 1935 during the Great depression of the
1930s. (Origins of Health Insurance Benefits)
FALSE
Martocchio – Chapter 05 #23
24. Employee costs for health care services tend to be least with managed care plans, higher costs are
associated with the consumer driven health plans and even higher costs are associated with fee-for-
service plans. (State Regulations)
FALSE
Martocchio – Chapter 05 #24
25. The network model compensates physicians using a fee schedule. (Prepaid Group Practice Model)
TRUE
Martocchio – Chapter 05 #25
26. Most dental insurance covers cosmetic improvements. (Dental Insurance)
FALSE
Martocchio – Chapter 05 #26
27. Flexible spending accounts permit employees to pay for health costs covered by an employer’s
insurance plan. (Consumer-Driven Health Care)
FALSE
Martocchio – Chapter 05 #27
28. A premium is the amount an employer pays to establish and maintain a health insurance policy.
(Defining and Exploring Health Insurance Programs)
TRUE
Martocchio – Chapter 05 #28
29. Company-sponsored insurance benefits appeared in the late 1800s for mining and railroad workers
when companies hired doctors to provide medical services to employees. (Origins of Health Insurance
Benefits)
TRUE
Martocchio – Chapter 05 #29
30. Union presence does not affect access to health insurance. (Origins of Health Insurance Benefits)
FALSE
Martocchio – Chapter 05 #30
31. IRC does not allow deductions for providing national health coverage. (Tax Regulations)
FALSE
Martocchio – Chapter 05 #31
32. FASB 106 does not affect the amount of net profit companies list on balance sheets. (Retiree Health
Care Benefits)
FALSE
Martocchio – Chapter 05 #32
33. Oftentimes, consumer-driven health care plans are referred to as two-tier payment systems.
(Consumer-Driven Health Care)
FALSE
Martocchio – Chapter 05 #33
34. In consumer-driven health care plans, the first tier is a pretax account that allows employees to pay for
services using pretax dollars. (Consumer-Driven Health Care)
TRUE
Martocchio – Chapter 05 #34
35. In consumer-driven health care plans, the third tier is the difference between the amount of money in
the individual’s pretax account and the insurance plan’s deductible amount. (Consumer-Driven Health
Care)
FALSE
Martocchio – Chapter 05 #35
36. The Mental Health Parity Act, which plays a prominent role in establishing parity requirements for
mental health plans, was enacted in 2003. (Regulation of Mental Health and Substance Abuse Plans)
FALSE
Martocchio – Chapter 05 #36
37. These indicate yearly probabilities of death based on such factors as age and sex. (Individual Versus
Group Insurance Coverage)
A. Experience ratings
B. Formulary ratings
C. Mortality tables
D. Morbidity tables
Martocchio – Chapter 05 #37
38. What are the three common forms of managed care plans? (Managed Care Plans)
A. Individual practice organizations, point-of-service plans, health maintenance organizations
B. Health maintenance organizations, preferred provider organizations, point-of-service plans
C. Preferred provider organizations, point-of-service plans, individual practice organizations
D. Preferred provider organizations, health maintenance organizations, individual practice
organizations
Martocchio – Chapter 05 #38
39. This federal law requires group health plans to provide medical and surgical benefits for
mastectomies. (The Employee Retirement Income Security Act of 1974 (ERISA))
A. Women’s Health and Cancer Rights Act
B. Health Insurance Portability and Accountability Act
C. Pregnancy Discrimination Act
D. Women with Disabilities Act
Martocchio – Chapter 05 #39
40. This consumer-driven health care option allows employees to contribute pre-tax wages annually to
pay for qualified medical expenses, but they will lose the balance not used at year’s end. (Consumer-
Driven Health Care)
A. Flexible spending accounts
B. Health reimbursement arrangements
C. Health savings accounts
D. Flexible savings accounts
Martocchio – Chapter 05 #40
41. These types of insurance plans provide protection against health care expenses in the form of cash
benefits paid to the insured or directly to the provider after the services are rendered. (Fee-For-Service
Plans)
A. Point-of-service plans
B. Managed care plans
C. Fee-for-service plans
D. Health savings accounts
Martocchio – Chapter 05 #41
42. This prescription drug plan is usually associated with indemnity plans, pays benefits after the
employee has met the deductible and tends to charge the most for filling the prescriptions.
(Prescription Drug Benefits)
A. Drug prescription plan
B. Mail order prescription drug program
C. Medical reimbursement plan
D. Prescription card program
Martocchio – Chapter 05 #42
43. Which of the following is not one of the ways PPACA is expected to extend coverage to more people?
(Patient Protection and Affordable Care Act of 2010)
A. By providing incentives to businesses to offer health insurance
B. By imposing penalties on businesses that do not provide coverage
C. By requiring individuals without health insurance to reasonably priced policies
D. By giving tax incentives to insurance companies
Martocchio – Chapter 05 #43
44. This law sets minimum standards for the length of hospital stays for mothers and newborns.
(Maternity Care)
A. Family and Medical Leave Act
B. Newborns’ and Mothers’ Health Protection Act
C. Pregnancy Discrimination Act
D. Newborns’ and Mothers’ Discrimination Act
Martocchio – Chapter 05 #44
45. What is coinsurance? (Features of Fee-For-Service Plans)
A. When both parents have employer-sponsored insurance coverage for their children
B. Two insurance companies combine to offer a group policy to an employer
C. The amount an employee has to pay out-of-pocket before the insurance kicks in
D. The percentage of covered expenses paid by the insured
Martocchio – Chapter 05 #45
46. Companies can choose from which four classes of health insurance programs? (Defining and
Exploring Health Insurance Programs)
A. Fee-for-service, managed care, point-of-service, consumer-driven health care
B. Indemnity, health savings accounts, managed care, fee-for-service
C. Point-of-service, fee-for-service, indemnity, managed care
D. Self-funded, managed care, fee-for-service, point-of-service
Martocchio – Chapter 05 #46
47. These types of insurance plans are set up to cover things like dental care, vision care and prescription
drugs. (Specialized Insurance Benefits)
A. Flexible savings plans
B. Flexible services accounts
C. Carve-out plans
D. Health services accounts
Martocchio – Chapter 05 #47
48. These are the most popular approaches used by employers to offer consumer-driven health care.
(Consumer-Driven Health Care)
A. Flexible savings accounts, health reimbursement arrangements
B. Health spending accounts, health reimbursement arrangements
C. Flexible spending accounts, health reimbursement arrangements
D. Health savings accounts, flexible spending accounts
Martocchio – Chapter 05 #48
49. What are the two types of fee-for-service plans? (Fee-For-Service Plans)
A. Health savings accounts, indemnity plans
B. Health savings accounts, health reimbursement plans
C. Health reimbursement plans, indemnity plans
D. Indemnity plans, self-funded plans
Martocchio – Chapter 05 #49
50. These are the three main types of dental plans. (Types of Dental Plans)
A. Dental fee-for-service, dental savings accounts, dental maintenance organizations
B. Dental savings accounts, dental maintenance organizations, dental service plans
C. Dental preferred provider organizations, dental maintenance organizations, dental service
corporations
D. Dental fee-for-service, dental service corporations, dental maintenance organizations
Martocchio – Chapter 05 #50
51. This type of group insurance plan offers health insurance and other benefits to the employees of two
or more unaffiliated employers, except for any arrangements established by a collective bargaining
agreement. (Exhibit 5.2, Types of Group Plans)
A. Voluntary employee beneficiary associations
B. Multiple employer trusts
C. Pooled coverage
D. Multiple employer welfare arrangement
Martocchio – Chapter 05 #51
52. This consumer-driven health care option contains contributions made by employers and the balance
can be carried-over to the next year. (Consumer-Driven Health Care)
A. Flexible spending accounts
B. Health reimbursement arrangements
C. Health savings accounts
D. Flexible savings accounts
Martocchio – Chapter 05 #52
53. This type of medical plan acts as a backup to basic insurance by covering expenses that exceed
maximum benefit limits. (Major Medical Insurance Plans: Supplemental and Comprehensive)
A. Supplemental major medical plan
B. Comprehensive major medical plan
C. Network major medical plan
D. Uniform major medical plan
Martocchio – Chapter 05 #53
54. What are the three specific forms of prepaid group practices? (Prepaid Group Practice Model)
A. Universal model HMOs, group model HMOs, staff model HMOs
B. Group model HMOs, network model HMOs, universal model HMOs
C. Staff model HMOs, group model HMOs, network model HMOs
D. Network model HMOs universal model HMOs, staff model HMOs
Martocchio – Chapter 05 #54
55. State health instructor laws address all BUT which of the following. (State Regulations)
A. Extending coverage to particular services, treatments or health conditions
B. Reimbursing recognized health care providers for health care services
C. Employer’s self-funded plans
D. Length of time coverage
Martocchio – Chapter 05 #55
56. Medical care has risen about how much since 1984? (Health Insurance Coverage and Costs)
A. 1224%
B. 433%
C. 220%
D. 860%
Martocchio – Chapter 05 #56
57. Which of the following is not true for medical reimbursement plans? (Prescription Drug Benefits)
A. Reimburses employees totally or partially
B. Usually associated with self-funded or independent indemnity plans
C. Deductibles must be met
D. Coinsurance usually 70%
Martocchio – Chapter 05 #57
58. Which of the following does not fall within the scope of the role of a primary care physician? (Exhibit
5.6, Role of Primary Care Physicians)
A. Making initial diagnosis and evaluation of patient’s condition
B. Identifying applicable treatment protocols and practice guidelines
C. Providing specialist diagnosis
D. Deciding what treatment is warranted
Martocchio – Chapter 05 #58
59. FASB 106 does not do which of the following? (Retiree Health Care Benefits)
A
.
Held firm the method for how companies recognize the costs of non pension retirement benefits,
including health insurance, on financial balance sheets
B. Reduces the amount of net profit companies list on balance sheets
C. Benefits such as health care coverage establish an exchange between the employer and employee
D. Post-retirement benefits are part of employee’s compensation package
Martocchio – Chapter 05 #59
60. Discuss and compare multiple-payer versus single-payer systems the US. (Defining and Exploring
Health Insurance Programs)
Main Points
● A multiple-payer system is predominant in the US.
● In a multiple-payer system, more than one party is responsible for covering the cost of health care,
including the government, employers, labor unions, employees, or individuals not currently employed.
● A variety of forces have contributed to the existence of a multiple-payer health care system in the
US.
● In a single-payer system, the government regulates the health care system and uses taxpayer dollars
to fund health care, as in Canada and some other countries.
● Single-payer systems are often referred to as universal health care systems because the government
ensures that all of its citizens have access to quality health care regardless of their ability to pay.
● These approaches to health care coverage have been at the heart of political and social debate for
years.
Martocchio – Chapter 05 #60
61. Discuss consumer driven health care plans briefly. (Consumer-Driven Health Care)
Main Points
● Refers to the objective of helping companies maintain control over costs while also enabling
employees to make greater choices about health care.
● Consumer-driven health care plans (CDHPs) combine a pretax payment account with a high-
deductible health plan.
● High-deductible health insurance plans require substantially higher deductibles and low out-of-
pocket maximums compared to managed care plans.
● Oftentimes, CDHPs are referred to as three-tier payment systems.
● A pretax account that allows employees to pay for services using pretax dollars.
● The difference between the amount of money in the individual’s pretax account and the insurance
plan’s deductible amount.
● Insurance plan covers the cost of medical care amounts greater than insurance plan deductible
amount.
● High-deductible health insurance plans.
● Flexible spending accounts (FSAs).
● Health reimbursement accounts (HRAs).
● Health saving accounts (HSAs).
● Flexible Spending Accounts permit employees to pay for specified health care costs that are NOT
covered by an employer’s insurance plan.
● HRAs are different to FSAs.
● Employers make the contributions to each employee’s HRA.
● HRAs permit employees to carry over unused account balances from year to year.
● HSAs advantages over FSAs & HRAs.
● HSAs are portable.
● HSAs are subject to inflation-adjusted funding limits.
● Employees may receive medical services of their choice.
● HSAs assets must be held in trust and cannot be subject to forfeiture.
○ Can be rolled-over annually.
○ Can accumulate tax-free until the participant’s death.
Martocchio – Chapter 05 #61
62. Discuss the various FASB rulings associated with retiree health insurance. (Retiree Health Care
Benefits)
Main Points
● The Financial Accounting Standards Board (FASB) is a non profit company responsibility for
improving standards of financial accounting and reporting in companies and implemented FASB 106
in 1990, implemented FASB 158 in 2005.
● FASB 106.
● Changed the method for how companies recognize the costs of non pension retirement benefits,
including health insurance, on financial balance sheets.
● Reduces the amount of net profit companies list on balance sheets by listing the costs of these
benefits as an expense.
● Benefits such as health care coverage establish an exchange between the employer and employee.
● Post-retirement benefits are part of employee’s compensation package.
● In 2003, FASB 132 was instituted.
● Requires companies to disclose substantial information about the economic value and costs of
retiree health care programs.
● Companies without sufficient current assets are unlikely to offer retiree benefits.
Martocchio – Chapter 05 #62
5 Summary
Category # of Question
s
Martocchio – Chapter 05 62