AD&D and Medical Expense Flashcards
What types of policies can AD&D be written on
- Individual health
- Group health
- Rider
Under a life insurance policy, what happens to your benefit if you die due to an accident
Your benefit could double
What type of policy is AD&D
It is a valued policy
Define valued policy
Policy that will pay a specified amount of money (instead of paying the insured the actual amount of the loss)
What is the policies face amount called
Principal sum
Define principal sum
Amount paid if there is an accident that causes the insured to die within a specified period of time after the accident
Define capital sum for single dismemberment
If you lose sight in one eye, then you will receive one half of the principal sum
What if I have multiple dismemberment (loss of two limbs loss of sight in both eyes)
Then you will receive the entire principal sum
Define dismemberment
Total loss of sight or severance of a limb at or above a major joint connecting it to the body (if you lose an arm from the wrist up or if you loose a leg from the ankle up) (hand and foot don’t count)
What if dismemberment was caused by a disease or illness, would it still be covered
No, death or dismemberment is only covered if it is accidental
Define accidental bodily injury
When an injury results from an accident as an unintended occurrence
Is it still an accident if the insured engages in hazardous acts or doesn’t take reasonable precautions
No, it is not an accident
Define the primary beneficiary
The first in line to receive death benefits when the insured dies
Define contingent beneficiary
Next in line to receive death benefits if the primary beneficiary dies before the insured
What if a beneficiary is irrevocable
This means that the policy owner cannot change the beneficiary without the beneficiary’s consent
What are 3 classifications of health insurance
- Individual/group
- Private or government
- Limited or comprehensive
Under what type of policy could a physical exam be required
Under an individual policy, not a group policy
What are three examples of private insurance entities
- Commercial health insurance companies
- Health care service contractors/HMOs
- PPOs
Define CHAMPUS
The government provides medical expense benefits to the dependents of military personnel
Define comprehensive policies
They cover most exposures (cover income lost and pay medical expenses)
Define fee-for-service
The insured pays premiums for insurance and the insurer pays providers for services performed
Define plans operating on a prepaid basis (HMOs)
Charge the subscriber for services in advance and then cover the services if they are performed
Define benefit schedule
There is a schedule that lists the amounts to be paid for each treatment either as a dollar amount or as a unit value
Define usual, customary and reasonable charges
It does not specify an amount, it provides benefits up to the reasonable and customary charge for service in that area
In HMOs do you have to see their providers
Yes, you have to see providers in the HMOs (Keiser)
What do commercial insurance policies cover
Insureds
What do HMOs, PPOs and health care service contractors refer to their participants as
Subscribers
What are two ways that basic expense policies reimburse for services
- Reimburse the insured for expenses (reimbursement policy)
- Pay the health care provider directly (if coverage is on a service basis)
What are three things that basic expense policies cover
- Hospital expense
- Medical expense
- Surgical expense
What are 3 characteristics of basic expense policies
- Low limits of coverage
- No coinsurance
- Little to no deductible
What is said to provide first dollar coverage
Basic expense policies, because they pay for medical expenses from the first day of hospitalization
What are 6 things that are not covered under basic medical expense policies
- Regular exams
- Custodial care
- Intentional injuries
- Prescription drugs
- Dental
- Treatment for drug and alcohol abuse
What does the daily hospital expense benefit cover
Room and board
Define when coverage is applied on a reimbursement (expense-incurred) basis
Covers actual expenses up to a fixed max or percentage of the actual or UCR cost
Define ancillary (or miscellaneous) hospital expense benefits
They cover the costs of other basic hospital services besides room and board (dressings, drugs, therapy, lab work)
Define an absolute value schedule
Shows the maximum dollar amount for each procedure
Define a relative value schedule
Assigns a relative unit value to each procedure based on its cost relative to the other procedures
How do you determine the actual dollar benefit amount in relative value
You multiply the number of value units by a conversion factor
How is the conversion factor determine
It is based on a geographic area and premiums paid
What do medical expense benefits not cover
They exclude coverage for routine exams and services that would be covered under hospital and surgical expense benefits
What do medical expense benefits generally limit
The number of visits and the dollar amount per visit
Besides physician charges, what other 5 things does medical expense benefits cover
- Private nursing duty
- Drugs
- Vision
- Home Health
- Maternity
For private nursing duty covered under medical expense benefit, what are limitations
Can be in the hospital or out of the hospital at a reduced level
For drugs covered under medical expense benefit, what are limitations
- Usually a limit on the amount of drugs or the length of period per prescription
- Deductible
For vision covered under medical expense benefit, what is covered
Cost of the eye exam and lenses per year
For vision covered under medical expense benefit, what are limitations
Excludes sunglasses, safety glasses, loss of lenses due to breakage and medical or surgical treatment
For home health covered under medical expense benefit, what is covered
Covers the cost of part-time home health care following hospitalization
What does the benefit of home health care include under medical expense
- Home health aide
- Therapy
- Medical supplies and equipment
- Nursing
- Social services
What are limitations of home health under medical expense
- Coverage limits are often related to a percent of UCR charges
- Max number of visits
- Length of time
Does home health care under medical expense apply to custodial care
No
How is maternity benefits payable under the medical expense benefit
- Fixed amount
- Multiple of the daily hospital room and board
- As other eligible expenses
What is the waiting period for maternity under medical expense
10 months
When is maternity care required to be provided by group policies
When the group has 15 or more employees (maternity has to be treated as any other allowable medical expense)
Define limited coverage policies
They will either cover specific perils, such as accident, drug or they will only provide a limited amount of coverage, such as credit disability and hospital indemnity
What is required on policies that cover limited perils
That the first page on the policy include a warning stating that “this is a limited policy” and advise the policyowner to read the policy carefully
What do accident policies cover
- Death
- Dismemberment
- Disability
- Hospital/medical care
But only if it is caused by an accident
Provide two examples of accident-only policies
- AD&D
- Travel accident
What does travel accident policies cover
Injuries or death
What is different about blanket insurance from all other coverages
Because the persons covered are not identified or given any evidence of coverage, since membership in the group is temporary and always changing
Define specified (dread) disease policies
They provide high limits of coverage for low-frequency, high-severity disease (i.e. cancer)
Define critical illness insurance
Provides supplemental coverage for multiple specified major illnesses (ie cancer)
How does critical illness insurance pay
It pays the policy face amount in a lump sum (ie 200,000 if you’re diagnosed with cancer)
Provide two examples of limited coverage policies
- Credit disability
- Hospital income
Define work site insurance plans (4)
- Group or individual plans that can include one or more insurance products
- Voluntary
- Offered through salary reduction
- Premiums can be paid by the employer and/or employee
Work site insurance plans can include the following 10 products
- Dental
- Vision
- Term
- Hospital indemnity
- Universal life
- AD&D
- Short/long term disability
- Critical illness
- LTC
- Retirement plans
What are examples of diagnostic procedures
Oral exams and x-rays
What are examples of preventive
Teeth cleaning and fluoride
What are examples of restorative care
- Fillings
- Inlays
- Crowns
- Other procedures to restore the functional use of teeth
What is included in oral surgery
Extraction of teeth and other surgical treatment of diseases, injuries and defects of the jaw
What is included in endodontics
Treatment for diseases of the dental pulp within the teeth (root canals)
What is included in periodontics
Treatment of gums and other supporting structures
What is included in prosthodontics
Replacement of missing teeth and structures of artificial devices (bridgework and dentures)
What do indemnity plans allow the insured to do
They allow the insured to choose from a wide selection of providers
What are the three most common types of indemnity dental plans
- Scheduled plans
- Nonscheduled (comprehensive) plans
- Combination plans
Define scheduled (basic) plans
They have a list of all covered services and specify a maximum amount to be paid for each service (ie $50 for a cleaning)
What is the positives about scheduled plans
They do not have a deductible or coinsurance
What are the negatives about scheduled plans
Besides diagnostic and preventive, their max benefit amounts are usually less than usual and customary costs so the insured has to pay more for those costs
How do nonscheduled plans cover expenses
On a reasonable and customary basis
As opposed to scheduled plans, do nonscheduled plans have deductibles and coinsurance
Yes they have deductibles and coinsurance
How do nonscheduled plans divide their coverage levels
Into 3 categories;
- Diagnostic and preventive
- Basic services
- Major services
What types of services fall under basic (3)
- Fillings
- Periodontics
- Oral surgery
What types of services fall under major (3)
- Inlays
- Crowns
- Dentures
Define combination plans
Combine features of scheduled plans and unscheduled plans
How do combination plans generally cover services
They usually cover diagnostic and preventive services on a USR basis and other services on a scheduled basis
What are two ways that dental plans can be written
They can be standalone or integrated with medical (major medical plan)
How could the dental deductible work with an integrated medical plan
The dental deductible could be satisfied with medical expenses
What are three things that group dental plans do to minimize adverse selection
- They have probationary periods
- Limitations on benefits for late enrollees
- No conversion privilege
Provide an example of having probationary periods for group dental plans
Because there is a higher than average number a claims after a person first gets coverage, some plans will limit major services to a 12 month probationary period
For a late enrollee, how can the group dental plan limit benefits (3)
- Reducing all benefits for one year to 50%
- Reducing the maximum benefit amount for a year
- Excluding all dental expenses or some dental expenses for a period of time
Will COBRA dental allow a conversion privilege
No
What are two things that are combined in consumer driven health plans (CDHPs)?
Combines high-deductible health plan (HDHP) with a tax-advantaged health reimbursement arrangement (HRA), (HSA) or a medical savings account (MSA)
Does an enrolllee in a CDHP make a copayment or pay coinsurance at the time that they receive care
No, the provider will send the claim to the carrier, who then processes it and tells the correct amounts owed.
How does an enrollee in CDHP pay
They will receive a bill from the provider (after it has been sent to the carrier) and then they will pay from their HRA or HSA by check, debit card or ACH.
Do you have to pay taxes on a health savings account
No, it is a tax-free savings account
Do you have to pay taxes on a flexible spending account
No, it is a tax-free savings account
Can you carry over funds in an HSA
Yes you can accumulate funds without a limit year after year
Can you carry over funds in an FSA
No, it is based on yearly savings (you cannot carry over funds year after year)
Is there a limit on how much you can put in your HSA
Yes, you can make tax deductible contributions into it up to the lesser of a max annual contribution or the HDHP deductible
What are qualified medical expenses that you can use your HSA for (6)
- Deductible
- Copays
- Prescriptions
- Over the counter drugs
- Long term care insurance
- Premiums during a period of unemployment
What is the penalty if you use your HSA distributions for non qualified medical expenses
The money is subject to taxes and you pay a 20% penalty
What is the age you have to be if you want to use HSA funds for non qualified medical expenses without paying the penalty, do you still have to pay taxes?
You have to be 59 1/2 and taxes will still apply
Is an HSA portable
yes you can take your hsa wherever you go
What if I select an HDHP, but I am not eligible for an HSA
Then you can have a health reimbursement account (HRA)
Can an employee contribute to an HRA
No, the HRA is owned by the employer and only the employer can contribute to it
Is there a maximum limit that an employer can contribute to an HRA
No, there is no limit
Do you have to pay taxes on withdrawals from HRAs
No, they are tax free
Can you carry over dollars from year to year in an HRA
yes
Can your HRA earn interest
No
Is your HRA portable
No, it will expire if you change health plans
Who administers the HRA
The health plan or the employer
Who contributes to FSA
Both employees (with tax-deductible payroll deductions) and employers
What are the two types of FSAs
- Health care FSAs (for medical)
- Dependent care FSAs (paying for childcare)
Is there a max on what you can contribute to an FSA
No there is not max, you just have to designate how much you are going to put into your account during the open enrollment period
Define worksite insurance plans
Voluntary plans offered by group or individual that are available to employees through salary reduction and premiums can be paid by employer and/or employee
What income do you need in order to qualify for subsidies
Have an income between 100% to 400% of the poverty level
Under the PPACA, what does an employer with 50 or more employees have to offer to their full-time employees
They have to provide minimum essential coverage under a group plan or pay a fine of up to $2,000 for each FTE
Under the PPACA, are FTE employees automatically enrolled in coverage
Yes, they are automatically enrolled and have to opt out of coverage if they do not want it
Define guaranteed issue
Your employer cannot deny you insurance based on a pre-existing condition
Define pure community rating
Insurance rates within a given territory cannot be based on demographic characteristics such as pre-existing conditions, age, gender, occupation or industry
Define partial community rating
Allows variations on demographic characteristics
How long is open enrollment under the PPACA
3 months
When does a person need to make changes based on special enrollment
They have 60 days to enroll or make changes due to special enrollment
Define essential health benefits
You cannot put an annual or lifetime cap on essential coverages such as emergency, hospital, maternity, etc.
Define the employer mandate
If a business has 50 or more employees they have to offer health insurance to FTEs or they will pay a tax penalty if FTEs receive health subsidies
How do the 4 individual plans stack up percentage wise
- Platinum 90%
- Gold 80%
- Silver 70%
- Bronze 60%
Define a per-cause limit under major medical policies
Limits the amount the insurer will pay for any one injury or illness
Can major medical policies have annual and lifetime limits
Yes
Define restoration of benefits
Provision that will restore or reinstate a specified dollar amount or percentage of benefits annually up the max lifetime limit
Define cumulative deductible
Applies to all claims during a calendar year
Define the carry-over provision for deductibles
Amount paid toward your deductible in the last quarter of the year may be carried over and applied to the next year’s deductible (if the deductible has been been satisfied for the year - you can’t keep carrying over your full deductible)
Define a per-cause deductible
Deductible that has to be satisfied for each separate illness or injury before any claims for those illnesses or injuries are covered
How long could a deductible period for a per-cause deductible last
It could last up to two to three years
Define common accident/common sickness provision
If more than one insured member of a family is injured in the same accident or has the same illness, then only one deductible needs to be satisfied
What are the three types of deductibles
- Flat
- Corridor
- Integrated
Define a flat deductible
An initial amount that must be satisfied before benefits are payable
Define corridor deductible
Found in supplemental major medical policies, the deductible must be satisfied after basic coverage is used up before major medical benefits are applied
Define integrated deductible
Deductible is one equal to the greater of the limits of the basic plan benefits or a specified deductible amount
Define stop-loss
The amount that the insured has to pay up to in order for the Plan to pay 100% of the remaining covered charges
What are the two types of major medical plans
- Comprehensive (what we have)
- Supplemental
Define supplemental plans
It is attached to a basic plan, the basic plan is paid up to $5000 with no deductible and then the supplemental policy can add more coverage with a corridor or integrated deducible subject to coinsurance and stop-loss
What are required to have with an HSA
HDHP
What would be paid to an insured that lost total eyesight or dismemberment
Capital sum
Is a heart attack accidental?
No, it is an illness
Is an HSA open to all individuals covered by a HDHP
Yes
Will AD&D cover the loss of use of an arm that is still attached
No, the arm has to be completely severed
Is an all-causes deductible subject to a carry over provision
Yes
