TOOLS & TECHNIQUES OF LIFE INSURANCE PLANNING



TOOLS & TECHNIQUES OF EMPLOYEE BENEFIT AND RETIREMENT PLANNING

11th Edition

College Course Materials

Deanna L. Sharpe, Ph.D., CFP®, CRPC®, CRPS®

Associate Professor

CFP® Program Director

Personal Financial Planning Department

University of Missouri-Columbia

Please Note: Correct answers for each question are indicated in bold type. After each question, the number of the page containing information relevant to answering the question is given. When a calculation is necessary or the reasoning behind a given answer may be unclear, a brief rationale for the correct answer is also given.

Part B: Employee Benefit Planning

Overview

Chapter 30: Designing the Right Health Benefit Plan

True/False

30.1 Traditional health insurance plans are “postpaid” plans.

30.2 “Defined contribution” health plans shift payment and selection features of health insurance from employers to employees.

30.3 A Health Savings Account (HSA) uses a savings account and insurance to cover health care needs.

Answers:

30.1 True [p. 267]

30.2 True [p. 269]

30.3 True [p. 269]

Multiple Choice

30.4 In health insurance plan design, which of the following are vitally important aspects of that design

a. efficient delivery of benefits

b. meeting employer’s cost constraints

c. having employees see the plan in a positive light

d. all of the above

e. only a and b

Answer: D [p. 267]

30.5 Which of the following is not a managed health care tool or technique?

a. reimbursement for out-of-pocket costs

b. negotiated discounts with health care service providers

c. quality review

d. cost sharing with employees

e. lifestyle management

Answer: A [pp. 268-269]

30.6 Which of the following is true regarding health care costs?

a. health care costs have risen faster than the rate of inflation

b. employers face increasing cost pressures relative to health care costs

c. traditional health care plans allow employers fewer methods of cost control than managed health care.

d. all of the above

e. only a and b

Answer: D [p. 267]

Application

30.7 The owner of Hearth Home Bakery wants to install a health plan that will place greater responsibility for maintaining low health care costs directly on employees. The best way of doing this is for Hearth Home to offer employees

a. traditional health care insurance

b. a managed care health plan

c. a Health Reimbursement Arrangement

d. a Health Savings Account

e. prospective pricing on health care

Answer: D [p. 269]

30.8 The owner of Pinnacle Management Services, Inc. wants to provide health benefits for the executive staff that is over and above the benefits provided for the rank and file employees. The best way of doing this is for Pinnacle to utililize

a. traditional health care insurance

b. a managed care health plan

c. a Health Reimbursement Arrangement

d. a Health Savings Account

e. prospective pricing on health care

Answer: C [p. 269]

30.9 In selecting a managed care plan, Tipton Enterprises wanted to be certain that decisions to perform a medical or surgical procedure are reviewed by qualified medical providers and approved before being completed. The health care management tool(s) that Tipton should be sure is (are) included in a managed care contract is:

a. peer review

b. utilization review

c. quality review

d. only a or b

e. only a or c

Answer: D [p. 269]

30.10 The owner of Sierra Sporting Goods encourages her employees to stay healthy. An employee benefit is an annual membership to the local athletic club. Every year, the store sponsors a mini-triathlon for area sports enthusiasts and awards a $100 bonus to each employee who participates and finishes the mini-triathlon and a $250 bonus to any employee who places in the top three on any race in the mini-triathlon. The health care management tool(s) that Sierra’s owner is using is (are):

a. peer review

b. lifestyle management

c. cost sharing

d. a and b

e. b and c

Answer: B [p. 269]

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