Chapter 13/4: Special Savings – Flashcards

Withdrawals from a flexible spending account (FSA) can be made through an FSA debit card. Funds in an FSA are subject to the use-it or lose-it rule, where all the funds must be used in the plan year. The correct answer is: Flexible spending account funds are not subject to the use-it or lose-it rule.

The amount of hospital income benefits is not based on the insured's income earnings. The correct answer is: The benefit amount is based on the insured's income earnings.

Coverage provided by an HMO is not limited. The correct answer is: HMO

Vision plans may exclude eye surgery. The correct answer is: Eye surgery

AD&D policies cover accident only. The correct answer is: Accident

AD&D policies pay for accidental death and dismemberment. The correct answer is: AD&D

There are two types of FSAs available: qualified medical expense account and dependent care expense account. The correct answer is: Qualified medical expense account and dependent care expense account

Funds in an HSA can be rolled over from year to year. The correct answer is: HSA

The savings account of a CDHP can be an HSA or a HRA. The correct answer is: HRA or HSA

Funds in an HSA can be rolled over from year to year. The correct answer is: HSA

FSA funds are available on a use-it or lose-it basis, and must be used in the plan year they are contributed to the FSA, or they will be forfeited. The correct answer is: FSA

Credit health insurance is intended to insure a debt. If a debtor becomes disabled, payments to a creditor are made for the disabled insured until the insured can resume work. Credit health insurance can be sold individually or through a group plan. Credit health insurance is most commonly sold through a group plan. The correct answer is: Credit health

Hospital income policies pay a dollar benefit for each day the insured is confined to a hospital. The amount is not based on the insured's income earnings. The insured is not restricted to using the hospital income benefit for medical purposes, and may use it for whatever purpose desired. Once the insured is discharged from the hospital, the benefits cease. The correct answer is: The insured must use the benefit to pay medical expenses.

Funds in an HSA can be used tax-free (no tax on principal or interest) for qualified health expenses. If funds are used for non-health purchases, a 10% penalty plus tax is assessed. The correct answer is: Funds in an HSA used for qualified medical expenses are taxed upon withdrawal.

The proceeds will go to the contingent beneficiary _ Julie. The correct answer is: Julie

Vision plans may exclude eye surgery. The correct answer is: Eye surgery

Travel accident policies cover accidents and death to fare-paying passengers on regularly-scheduled commercial carriers. Since death is covered for the duration of the trip, the insured must name a beneficiary. The correct answer is: Travel accident

FSA funds are available on a use-it or lose-it basis, and must be used in the plan year they are contributed to the FSA, or they will be forfeited. The correct answer is: FSA

Rachel's AD&D policy will pay the face amount, $200,000, because she lost both legs. The correct answer is: $200,000

Withdrawals made after the age of 65 for non-health purchases are taxed, but not penalized. The correct answer is: 65

In the maximum out-of-pocket spending for an HSA is $6,450 for a single individual. The correct answer is: $6,450

Jeanine's AD&D policy will pay the face amount because she lost both arms. The correct answer is: $30,000

Dread disease policies are limited policies that pay for a specific disease or medical condition. The correct answer is: Dread disease

The principal sum is paid for loss of two principal body parts. The correct answer is: $50,000

AD&D policies cover accident only. The correct answer is: Accidental injury

Prescription plans are not required to be provided. Prescription plans may require a copay, may have a dispensing limit, and may exclude coverage for fertility drugs, experimental drugs or vitamins. The correct answer is: Coverage for fertility drugs must be provided.

The savings account of a CDHP can be an HSA or an HRA. The correct answer is: HRA or HAS

The capital sum of an AD&D policy is paid for accidental dismemberment of one or more limbs. The correct answer is: The lump-sum payment for accidental dismemberment

The amount of hospital income benefits is not based on the insured's income earnings. The correct answer is: Benefit amount is based on the insured's income earnings.

Flexible spending accounts (FSAs) are tax-advantaged savings accounts in which funds are used for qualified medical expenses and dependent care. Eligibility: FSA plans are established and offered through an employer for the benefit of its employees. FSA funds are not subject to federal income or Social Security taxes. Employees contribute a portion of their income earnings to the savings account pre-tax, which lowers their taxable income. The correct answer is: Annual contribution limits