Acronyms Flashcards
FCRA
Fair Credit Reporting Act
MIB
Medical Information Bureau
PLMA
Producer Licensing Model Act - A uniform set of insurance regulations
HIPAA
Health Insurance Portability & Accountability Act
SSDI
Social Security Disability Income
SSI
Supplemental Security Income
ERISA
Employee Retirement Income Security Act of 1974
HICAP
Health Insurance Counseling Advocacy Program
CPI
Consumer Price Index
COBRA
Consolidated Omnibus Reconciliation Act of 1985
IME
Independent Medical Examination
HSA
Health Savings account (HSA) is owned by the insured and is part of a high deductible health plan
HRA
Health Reimbursement Arrangements (HRAs) are not owned by the insured. Employer-funded group health plans. Provides payments for medical expenses that are not covered by the employee’s health insurance plan.
FSA
Flexible Spending Account (FSA, also called a “flexible spending arrangement”) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.
BOE
Business Overhead Expense (BOE) - policy provides a business coverage for typical business overhead costs in case the business owner becomes disabled.
HMO
Health Maintenance Organizations (HMO) - providers contract with the health insurance company and receive a “capitated” (fixed payment arrangement) upfront monthly payment
POS
Point Of Service plan (POS) - combines characteristics of a health maintenance organization (HMO) and the preferred provider organization (PPO).
PPO
Preferred Provider Organization (PPO) - (a/k/a participating provider organization or preferred provider option) is a managed care group of doctors, hospitals, pharmacies and other health care providers, who have contracted with an insurance company or third-party administrator to provide health care at reduced cost. Typically reimbursed 90-100% of the cost versus
PHI
Protected Health Information (PHI)
PPACA
Patient Protection and Affordable Care Act (PPACA)
Donut Hole
“donut hole” is a temporary limit on the amount that the Medicare Part D plan will pay for prescription drugs. ENDS 2020
Rehabilitation
Rehabilitation refers to regaining skills, abilities or knowledge that a person had but lost or has a limitation in, rather than improving or attaining new skills, etc.
Habilitation
Habilitation services are health care services that are designed to assist a person keep, learn or improve skills and functioning for daily living
Medicare Part A
Medicare Part A covers hospital care, hospice, certain skilled nursing and nursing home care and home health services.
Medicare Part B
Medicare Part B covers two main categories of healthcare services. Those are preventive and medically necessary services provided by a physician.
Medicare Part D
Medicare Part D is a voluntary program that provides prescription drug coverage.
MAP
Medicare Advantage Plan (MAP) is a Medicare health insurance plan that is provided by a private company.
Medigap
Medigap policy only supplements the Original Medicare benefits.
MEC
modified endowment contract - is a type of tax qualified life insurance policy that received too much funding.
Non-qualified life insurance plan
No tax-deferred benefits available
Tax-qualified life insurance policies
Premiums, plan contributions and ratings applied are tax-deductible. Assets are protected from claims of judgment creditors. Prevent breaches in coverage, since the plan’s assets and contributions are used to pay the policy premium.
Supreme Court case of U.S. v. South-Eastern Underwriters Association
Determined that an entity based in one state is involved in interstate commerce
U.S. v. South-Eastern Underwriters Association
Supreme Court overturned Paul vs. Virginia.
Paul vs. Virginia
Established that selling insurance from one state to another state did not constitute interstate commerce.
STOLI
Stranger Originated Life Insurance - refers to the sale of a life insurance policy to a third party. The owner of the life insurance policy sells the policy to a stranger for an immediate cash benefit.
Viatical Settlement
Process whereby a policyholder sells a policy for less than the amount of the death benefit to a private individual.
SPDA
Single premium deferred annuity - one lump-sum premium payment is made by the insured and the insured can access a specific amount of income when the insured retires.
Cash value life insurance policy
Absence of any taxes owed for any earnings until the policy is cashed out.
Non-contributory insurance
Provide the benefit of automatic approval, since they are automatic-issue policies with no need for a medical examination to obtain coverage.
Contributory group life insurance
Require both the employer and employees to contribute to the plan.
Adjustable life policies
More flexible compared to other types of policies. Allow changes to the main features of the policy, such as the premiums paid and the face value.
Actuarial Table
A table containing the odds of whether a person will live until their next birthday is called an.
3 primary types of whole life (a/k/a permanent life)
Traditional whole life, universal life and variable universal life.
Traditional whole life insurance
Pays a guaranteed death benefit, it is in effect for the insured’s lifetime and it has stable premiums.
Variable universal life insurance
Provides a death benefit similar to whole life coverage and it also allows a policyholder to direct part of the premium paid to a separate investment account.
Universal life policies
Combination of term and whole life insurance policies, which provide some more flexibility than ordinary life policies. Typically have low-cost premiums with a savings component
Non-qualified plan
Not subject to the anti-discrimination restrictions associated with qualified tax plans
PIA
Primary Insurance Amount (PIA) - a complex formula for determining a person’s Social Security benefit is the
Whole life premiums
Fixed and based on the age of the insured at the time that the policy is issued.
Ordinary life insurance
May also be referred to as whole life insurance or straight life insurance.
Convertible term life policie
Changes in the health of a policyholder does not prevent a conversion. Since any changes to the insured’s health are not considered when converting from a term to a permanent policy.
AWI
Average Wage Indexing - social security calculations, an individual’s earnings is determined by analyzing the entirety of the earnings level of society for the year that the person turns sixty years old, in conjunction AWI.
Optional renewability
A policy provision allowing the insurer to terminate the policy on the policy’s ANNIVERSARY DATE
Conditionally renewable
A policy permits the insurance company to terminate coverage if an event mentioned in the policy occurs, such as the insured reaching a SPECIFIC AGE.
BOE - Business Overhead Expense
The benefit period is shorter than a personal disability policy. The benefit period for a BOE is approximately one to two years.
Primary care PROVIDER (not Physician)
Is a physician, such as a medical doctor (M.D.) or doctor of osteopathic medicine (D.O.), or nurse practitioner, clinical nurse specialist or physician assistant, who is authorized to provide, coordinate or help a patient access a range of health care services, pursuant to state law.
Primary care PHYSICIAN (not Provider)
A physician is a medical doctor or doctor of osteopathic medicine, who provides or coordinates a range of health care services for a patient directly.
HDHP
High Deductible Health Plan - is a health insurance plan that meets federal regulations in three separate benefit areas: deductible, out-of-pocket maximum and first-dollar coverage. The amounts are adjusted every year by the IRS.
COI
Certificate Of Insurance - is issued by an insurance company to provide proof that insurance coverage is in effect. Provides the insured with proof that a certain medical procedure is covered.
Birthday Rule
The health plan of the parent whose birthday comes first in the calendar year is designated as the primary plan for a dependent child.
Late Enrollee
Is an eligible employee or dependent who does not enroll in a group health plan during the initial enrollment period. Rather, the employee enrolls at a later date or on a special enrollment date.
ACO
Accountable Care Organization - is a program of the Patient Protection and Affordable Care Act (PPACA) that reduces health care costs by encouraging health care providers to improve member care coordination. 15% of the US population is covered.
Coordination of Benefits Clause
Is a provision in a typical insurance policy that is designed to prevent the insured from profiting by having too many health insurance policies.
“Own occupation”
Means that the disability policy will pay benefits if the insured cannot return to work in their usual field of work.
“Any occupation”
A disability policy that refers to the insured’s ability to work in an occupation other than the insured’s usual occupation. A policy with an “any occupation” provision is the most strict, since it will only pay benefits if the insured cannot work in any job,
Subrogation
Is the name of the legal process used when an insurance company seeks reimbursement of money paid out on a health insurance claim from another person’s insurance company.
Extension of COBRA continuation coverage for 18 additional months
Once the initial 18 months ends, a second qualifying event needs to occur or the qualified beneficiary must be found to be disabled by Social Security.
A person can open an HSA only if that person is
Only if that person is enrolled in an HDHP and is not enrolled in any other low-deductible health insurance plan.
Medigap policy
Only supplements the Original Medicare benefits.
Medicare Advantage Plan (MAP)
Is a Medicare health insurance plan that is provided by a private company. The company enters into a contract with Medicare to provide all Part A and Part B benefits. Medicare Advantage Plans include Accountable Care Organizations, Health Maintenance Organizations, Preferred Provider Organizations and Private Fee for-Service Plans.
Deductible
Is the amount of money that an insured has to pay before the insurance company is required to pay.
Advantages for employees in a group health insurance plan include
Contribution that most employers make towards the cost of the health coverage premium, more comprehensive benefits are available and the cost paid to medical providers is usually less than under an individual health insurance policy.
Basic Hospital Plan
A policy that provides financial protection against significant healthcare costs.
Co-payment
A fixed amount paid by the insured for a covered health care service. It is usually paid at the time of treatment.
Co-insurance
Is the share of the costs of a covered health care service paid by the insured.
Out-of-Pocket Limit
Is the most money that an insured will pay during a policy period,
Balance Billing
Occurs when a health care provider bills the insured for the difference between the medical provider’s charge and the allowed amount.
Critical Illness Insurance Policy
Usually paid out in a lump sum, but there could also be a structured payment schedule. Critical illness insurance provides coverage when the insured is diagnosed with a critical illness that is specified in the policy.
Defined contribution health plans
Are usually a more affordable option for employers.
“Defined Benefit” Health Plan
Typical group health insurance is offered to employees on a “defined benefit” basis and the employer pays the costs for the group health plan.
Specific stop-loss insurance
A covered person experiences very high losses due to medical treatment costs. The coverage begins when the medical costs exceed the previously set amount stated in the policy.
Aggregate stop-loss insurance
Provides protection to employers when the total amount of claims of the entire covered group (e.g., all of the employees) exceed the level set forth in the policy.
Accountable Care Organizations (ACO’s)
A program of the Patient Protection and Affordable Care Act (PPACA) that reduces health care costs by encouraging health care providers to improve member care coordination. The program provides bonuses to providers who improve efficiency and patient’s healthcare results.
Worksite Insurance Plan
An insurance policy that is available as an individual or group policy and may have no cost to the employer. The employee chooses the desired coverage.
Readability
Reading proficiency level used to write insurance policies
What reading grade level are insurance documents generally written
States typically mandate that the readability of the document be at a high school graduate reading level or better.
After the first 18 months of COBRA coverage expires
There is a 90-day COBRA continuation option for employees that are part of a group policy,
Which of the following represents who must execute the application for insurance?
Named insured only
Mortality Table
shows the probability of death at specified ages.
Unearned Income
is a person’s income that continues even if the person cannot work
Gender should not be considered
when determining a health insurance policy premium.
A voluntary benefit program
is one option that an employer can use to offer health insurance coverage, including supplemental coverage, to its employees. However, the employee pays the costs of the coverage.
Employee pays the premium in a(n) ___________________ plan.
voluntary benefit program
Fee-for-service payments
are reimbursements to medical treatment providers by the insurance company for every patient visit, including office visits, surgical procedures and laboratory testing.
Disability buy-out (a/k/a buy-sell policy)
If an owner of a business becomes disabled, a disability buy-out (a/k/a buy-sell policy) insurance policy enables the remaining owners of the business entity itself to purchase the disabled business owner’s portion of the business.
Cash or accrual method
can be used as accounting methods for an insured to determine lost monthly earnings for purposes of obtaining benefits for a partial disability policy under the residual provision.
Participating providers
have a contract with the health insurance company, but the discount may be less than for a preferred provider, so the insured may have to pay more for health care services.
Morbidity rate
is the ratio that measures occurrences of sickness to the number of healthy individuals within a specific group of people over a certain period of time.
Morbidity table
shows occurrences of sickness to the number of healthy individuals within a specific group of people over a certain period of time. A mortality table shows the probability of death at specified ages.
Section 105 plan (a/k/a salary continuation plan)
permits an employer to pay full or partially deductible wage payments to a disabled employee.
Workplace modification (a/k/a workplace accommodation) provision
provides a benefit to an employer in order to help the employer provide any necessary medical devices or other equipment that will enable a disabled employee to return to work.
Annual statement
is a detailed financial report sent to state regulators by an insurance company in the states in which it operates.
Physician care requirement provision
requires an insured to receive regular care with a doctor to be eligible for coverage.
Carry-over account
is used with business overhead expense policies. The carry-over account holds any unused benefits. Those benefits carry-over, so the insured could use them at a later date.
Five most important insurance industry ratings services are
A.M. Best: A++
Standard and Poor’s: AAA
Moody’s: Aaa
Duff and Phelps: AAA
Weiss: A+
Health Insurance is
a contract that requires an insured to pay a premium to a health insurance company in exchange for the payment of an insured’s health care costs.
Programming is
a method used to calculate the amount of disability coverage that an individual requires.
Legal reserve refers to
an insurance company’s ability to meet its financial obligation to pay claims. It is calculated with an accounting formula.
Personnel replacement expense provision
is an optional provision that provides reimbursement of costs associated with finding an employee to replace an employee or key personnel who became disabled and unable to work.
Non-preferred provider is
a medical provider who does not have a contract with the insured’s health insurance company to provide health care services.
UCR
Usual, Customary and Reasonable. UCR is the amount paid for a medical service in a certain geographic area based on what other medical providers in that geographical area typically charge for the same or similar medical service. The UC
Implied authority is
not stated in the insurance contract, but an insurance agent assumes that they have it in order to perform their duty as a fiduciary for their client (the principal).
Reinsurance describes
the risk management device where one insurance company (the reinsurer) insures a second insurance company’s liabilities. It is essentially insurance for insurance companies.
Basic type(s) of term insurance?
“Level” and “decreasing” relate to the death benefit payout while the policy is active.
Level term
same death benefit is paid, regardless of whether the insured dies on the hundredth day or the thousandth day of the active policy period.
Decreasing term
death benefit payout decreases as the insured gets older, so it is larger when the insured is younger.
Payer benefit provision
is typically a provision in a children’s life insurance policy that results in the suspension of premiums if the individual responsible for paying the policy premiums dies or becomes disabled before the child becomes an adult.
ADB
accelerated death benefit - receive cash advances against the death benefit
A.M. Best
an independent insurance rating firm that ranks firms, according to their financial strength, operating performance and market profile.
Credit ratings for stocks, bonds, and commodities.
Moody’s Investors Service (a/k/a Moody’s), Standard & Poor’s and Fitch
Annuity
contract requiring periodic payments to the insured by an insurer.
“Current assumption” whole life
also known as excess interest or Interest sensitive whole life, provides traditional whole life features with universal life elements. Interest is earned based on the performance of the stock market and the cash value changes with changes in the stock market.
Interest sensitive whole life,
also known as excess interest or current assumption whole life, provides traditional whole life features with universal life elements. Death benefits remain the same for the life of the policy, but there may be variations in premium payments,
Return of premium policy
costs more than a standard policy, since there is a guaranteed return
Insurance charges are also known as
mortality and expense (M&E) fees and administrative fees,
AML
anti-money laundering (AML) - US Patriot Act requires insurance companies, which issue or underwrite covered insurance products, to create and implement a written anti-money laundering program. The law does not require independent insurance agents and brokers to implement their own anti-money laundering (AML)
PCIP
Pre Existing Condition Program - CA has transferred the program to Federal run
Reinsurance
device used by insurers to transfer/share risk with a third party…makes insurance affordable
Independent Agent
person who enters into an agency agreement with more than one insurer
Exclusive Agency
Captive Agent - under agreement to represent only one insurer
Broker
person acting as an intermediary between an insurer and purchaser
Law of Agency
defines the relationship between an insurance company (principal) and a producer operating as its agent
Insurance Agent
person who transacts insurance other than: life, disability or health
Life Agent
person who transacts insurance: life, disability or health
Express Authority
written into the producers agency contract
Implied Authority
not stated in contract
Producer
agent, broker or solicitor who submits applications to insurer
Insurance Broker
behalf of another person transact insurance
Solicitor
employed by property and casualty agent of broker to assist with transactions
Surplus Line Broker
person licensed to write insurance coverage with non-admitted insurers
IIPPA
Insurance Information & Privacy Protection Act: establishes standards for use, preservation, disclosure info
Cal-GLBA
California Financial Information Privacy Act: consumer safeguards provided by Federal Law
Risk
is the uncertainty concerning a loss: two types = Speculative and Pure Risk
Speculative Risk
a possibility of loss, no loss, or gain
Pure Risk
possibility of loss or no loss. THERE IS NO POSSIBILITY OF GAIN
Loss
Reduction, decrease or disappearance of value
Hazard
is something that increases the risk or severity of a loss
Physical Hazard
physical condition that increases the probability of loss
Moral Hazard
disposition to be DISHONEST which increases the chance of loss. Takes action resulting in loss
Morale Hazard
indifference to loss or the failure to take proper care, Fail to take action
Adverse Selection
the principle that those more likely to experience a possible loss tend to seek insurance to greater extent
Risk Management
analyzing exposures that create risk and designing programs to minimize possible loss
Law of Large Numbers
combining of a large number of homogeneous units helps insurers to predict a possible loss by statistics
Insurance
is a contract permitting one party to indemnify another against loss, damage or liability
Indemnity
to make one whole or restore a person to the same financial condition as before
Contract Law
pertains to the formation and enforcement of contracts
Tort Law
pertains to injuries suffered by one party as a result of another party’s actions or negligence
Elements of Legal Contract
Competent Party, Legal Purpose, Agreement, Consideration
Contract of Adhesion
one party writes the contract without input from the other “take it or leave it”
Aleatory Contract
the exchange of value is unequal
Indemnity Contract
agreement to pay on behalf of another party under specified circumstances
Personal Contract
follows the person
Unilateral Contract
only one party is legally bound to the obligations
Conditional Contract
both parties must perform certain duties
Express Warranty
considered fact
Express Warranty
a guarantee that is not written down or explicitly spoken
Profitable Distribution of Exposures
balancing adverse risks with preferred risks creates “Profitable Distribution of Exposures”
Physician care requirement provision
requires an insured to receive regular care with a doctor, regular physicals to be eligible for coverage.
Programming
is a method used to calculate the amount of disability coverage that an individual requires.
Personnel replacement expense provision
in an insurance policy is an optional provision that provides reimbursement of costs associated with finding an employee to replace an employee
“Capitated”
(fixed payment arrangement) upfront monthly payment for providing health care to the HMO’s enrolled members
