PSI Exam Study Guide Questions with
Complete Solutions27
Coinsurance - ANSWERS-refers to a co-sharing agreement that is between an insured and an
insures which provides that the insured will pay for a certain percentage of the covered
expenses incurred.
Non-Contributory - ANSWERS-In a non-contributory plan, the employer pays the entire amount
of the premium. Therefore, all eligible employees in the group must enroll in the group
insurance plan. Employee Retirement Income Security Act (ERISA) The acronym ERISA stands for
the Employee Retirement Income Security Act of 1974. This act protects the retirement assets
of Americans by implementing rules that qualified retirement plans must follow in order to
ensure that plan fiduciaries do not misuse plan assets. This act is the more important federal
standard in place for employee benefits. Although ERISA does not
COBRA - ANSWERS-As previously discussed, COBRA stands for the Consolidated Omnibus
Reconciliation Act. This act, passed in 1986, provides continuing coverage of group health
insurance benefits to employees and their qualifying dependents upon the occurrence of
certain qualifying events where the coverage would otherwise be terminated.
Americans with Disabilities Act (ADA) - ANSWERS-The Americans with Disabilities Act was
passed in 1990. This act prohibits discrimination against people who have disabilities. Under the
ADA, discrimination against a disabled person is illegal in employment, public accommodations,
transportation, communications, and government activities.
Patient Protect and Affordable Care Act (PPACA) - ANSWERS-AKA THE ACT - also referred to
simply as the Affordable Care Act - was enacted on March 23, 2010. This Act is now a federal
law with a focus on ensuring that all Americans have access to quality and affordable health
care. Along with its focus on access to quality and affordable care, the Patient Protection and
Affordable Care Act helps in containing the overall cost of health care for both individuals and
the health care system alike.
,Eligibility for Medi-Cal - ANSWERS-includes individuals age 19 through 64 qualifying with
household income up to 138 percent of the Federal Poverty Level (FPL). Children under age 19
qualify if household income is up to 266 percent FPL
MAGI - ANSWERS-Modified Adjusted Gross Income.
MAGI eligibility for CSR - ANSWERS-consumers qualify for varying CSRs between 138 and 250
percent FPL
Guaranteed Issue - ANSWERS-The guaranteed issue laws require insurance companies to issue a
health plan to any applicant - regardless of the applicant's health status or other factors. In the
small group market, HIPAA (the Health Insurance Portability and Accountability Act) requires all
health plans for small groups - employers with 2 to 50 employees - to be guaranteed issue.
Cost Sharing Reductions - ANSWERS-Eligible Californians who buy health care coverage through
an exchange will have a cap on their total out-of-pocket spending, including deductibles, co-
payments, and coinsurance. These limits are based on the out-of-pocket limits that apply to high
deductible plans used with Health Savings Accounts. People with incomes under 400% of the
Federal Poverty Level (FPL) will get subsidies to lower those caps based on their incomes.
Define Health Plan Metal Tiers - ANSWERS-The metal plans are distinguished from one another
by their "actuarial value." Actuarial value refers to the average amount of insurance expenses
that would be paid for by the plan. The higher the actuarial value of a plan, the lower the out-
of- pocket costs for the plan member. With respect to the plan names, the most expensive the
metal, the higher the actuarial value. For example, the Platinum Plan covers 90% of covered
medical expenses, while a Bronze Plan only covers 60%.
Bronze Plan - ANSWERS-The Bronze Plan is intended to have the lowest premium, and charge
the highest out-of-pocket costs for health care services. With this plan, insurance companies will
typically pay 60% of covered health care expenses, with the remaining 40% to be paid by
consumers.
, Silver Plan - ANSWERS-The Silver Plan has the insurance company pay 70% of covered health
care expenses, and the remaining 30% of expenses are paid out-of-pocket by the policy holder
Gold Plan - ANSWERS-The Gold Plan has the insurance company pay 80% of covered health care
expenses, and the remaining 20% of expenses are paid out-of-pocket by the policy holder.
Platinum Plan - ANSWERS-The Platinum Plan has the insurance company pay 90% of the
covered health care expenses, and the remaining 10% will be paid by the policy holder out-of-
pocket.
MLR - ANSWERS-Medical Loss Ratio requires that health insurers in the group or individual
market - including plans that are grandfathered - provide an annual rebate to enrollees if the
insurer's "medical loss ratio" fails to meet minimum requirements of 85% in group and 80% in
individual markets.
Benefits - ANSWERS-Plans a - coinsurance for hospital days and cost of 365 more hospital days
in lifetime. Pan B - 20% of doctor bills and 50% mental health services, first three pints of blood.
Plans A-L offer basic benefits along with various additions depending on the medigap plan. M
and N just added.
Which part of Medicare covers prescription drugs? - ANSWERS-Part D
Which part of Medicare helps to pay for doctors' services? - ANSWERS-Part B
Medicare Part C - ANSWERS-combines Part A and Part B. Private insurance companies approved
by Medicare provide this coverage. Generally, an insured must see doctors in the plan, however,
their costs may be lower than in Medicare Parts A and B, and they may get extra benefits.
Complete Solutions27
Coinsurance - ANSWERS-refers to a co-sharing agreement that is between an insured and an
insures which provides that the insured will pay for a certain percentage of the covered
expenses incurred.
Non-Contributory - ANSWERS-In a non-contributory plan, the employer pays the entire amount
of the premium. Therefore, all eligible employees in the group must enroll in the group
insurance plan. Employee Retirement Income Security Act (ERISA) The acronym ERISA stands for
the Employee Retirement Income Security Act of 1974. This act protects the retirement assets
of Americans by implementing rules that qualified retirement plans must follow in order to
ensure that plan fiduciaries do not misuse plan assets. This act is the more important federal
standard in place for employee benefits. Although ERISA does not
COBRA - ANSWERS-As previously discussed, COBRA stands for the Consolidated Omnibus
Reconciliation Act. This act, passed in 1986, provides continuing coverage of group health
insurance benefits to employees and their qualifying dependents upon the occurrence of
certain qualifying events where the coverage would otherwise be terminated.
Americans with Disabilities Act (ADA) - ANSWERS-The Americans with Disabilities Act was
passed in 1990. This act prohibits discrimination against people who have disabilities. Under the
ADA, discrimination against a disabled person is illegal in employment, public accommodations,
transportation, communications, and government activities.
Patient Protect and Affordable Care Act (PPACA) - ANSWERS-AKA THE ACT - also referred to
simply as the Affordable Care Act - was enacted on March 23, 2010. This Act is now a federal
law with a focus on ensuring that all Americans have access to quality and affordable health
care. Along with its focus on access to quality and affordable care, the Patient Protection and
Affordable Care Act helps in containing the overall cost of health care for both individuals and
the health care system alike.
,Eligibility for Medi-Cal - ANSWERS-includes individuals age 19 through 64 qualifying with
household income up to 138 percent of the Federal Poverty Level (FPL). Children under age 19
qualify if household income is up to 266 percent FPL
MAGI - ANSWERS-Modified Adjusted Gross Income.
MAGI eligibility for CSR - ANSWERS-consumers qualify for varying CSRs between 138 and 250
percent FPL
Guaranteed Issue - ANSWERS-The guaranteed issue laws require insurance companies to issue a
health plan to any applicant - regardless of the applicant's health status or other factors. In the
small group market, HIPAA (the Health Insurance Portability and Accountability Act) requires all
health plans for small groups - employers with 2 to 50 employees - to be guaranteed issue.
Cost Sharing Reductions - ANSWERS-Eligible Californians who buy health care coverage through
an exchange will have a cap on their total out-of-pocket spending, including deductibles, co-
payments, and coinsurance. These limits are based on the out-of-pocket limits that apply to high
deductible plans used with Health Savings Accounts. People with incomes under 400% of the
Federal Poverty Level (FPL) will get subsidies to lower those caps based on their incomes.
Define Health Plan Metal Tiers - ANSWERS-The metal plans are distinguished from one another
by their "actuarial value." Actuarial value refers to the average amount of insurance expenses
that would be paid for by the plan. The higher the actuarial value of a plan, the lower the out-
of- pocket costs for the plan member. With respect to the plan names, the most expensive the
metal, the higher the actuarial value. For example, the Platinum Plan covers 90% of covered
medical expenses, while a Bronze Plan only covers 60%.
Bronze Plan - ANSWERS-The Bronze Plan is intended to have the lowest premium, and charge
the highest out-of-pocket costs for health care services. With this plan, insurance companies will
typically pay 60% of covered health care expenses, with the remaining 40% to be paid by
consumers.
, Silver Plan - ANSWERS-The Silver Plan has the insurance company pay 70% of covered health
care expenses, and the remaining 30% of expenses are paid out-of-pocket by the policy holder
Gold Plan - ANSWERS-The Gold Plan has the insurance company pay 80% of covered health care
expenses, and the remaining 20% of expenses are paid out-of-pocket by the policy holder.
Platinum Plan - ANSWERS-The Platinum Plan has the insurance company pay 90% of the
covered health care expenses, and the remaining 10% will be paid by the policy holder out-of-
pocket.
MLR - ANSWERS-Medical Loss Ratio requires that health insurers in the group or individual
market - including plans that are grandfathered - provide an annual rebate to enrollees if the
insurer's "medical loss ratio" fails to meet minimum requirements of 85% in group and 80% in
individual markets.
Benefits - ANSWERS-Plans a - coinsurance for hospital days and cost of 365 more hospital days
in lifetime. Pan B - 20% of doctor bills and 50% mental health services, first three pints of blood.
Plans A-L offer basic benefits along with various additions depending on the medigap plan. M
and N just added.
Which part of Medicare covers prescription drugs? - ANSWERS-Part D
Which part of Medicare helps to pay for doctors' services? - ANSWERS-Part B
Medicare Part C - ANSWERS-combines Part A and Part B. Private insurance companies approved
by Medicare provide this coverage. Generally, an insured must see doctors in the plan, however,
their costs may be lower than in Medicare Parts A and B, and they may get extra benefits.
