Book 2 Pages 102 - End Flashcards
a federal law that eliminates previously detrimental aspects of changing jobs and enrolling in a new employer’s group health plan
HIPAA (health insurance portability and accountability act)
limits the application of preexisting condition exclusions when enrolling in a new employer health plan
HIPAA
provides additional opportunities to enroll in a group plan if an employee loses other coverage or experiences certain life events
HIPAA
guarantees that certain individuals will have access to and can renew individual health insurance policies
HIPAA
prohibits discrimination against employees and dependents based on health factors such as prior medical conditions and health history
HIPAA
what does HIPAA define as a pre existing condition?
any health event that caused the need for medical advice, treatment, or diagnosis within 6 months prior to enrollment in new plan
when does the catch up limit kick in for HSA?
age 55
can individuals who have medicare at age 65 still contribute to a HSA?
no
what is the last month rule under HSA’s?
states that if you are covered by a high deductible plan and have access to a HSA by on Decemeber 1st, you can make a full year contribution in December without penalty
what is the maximum monthly contribution allowed under HSA’s?
1/12 of the annual contribution limit
True or False?
Archer Medical Savings Accounts allow funding from the employee and employer in the same year
False
Do HSA’s allow funding from employee and employer in the same year?
Yes
True or False?
MSA’s were limited to self employed individuals or small employers with 50 or less employees
True
what was the maximum contribution under a MSA?
65% of the deductible for individuals and 75% of the deductible for families
penalty for excess contributions to a HSA
6% excise tax
True or False?
if moving funds from a FSA or HRA to a HSA the transfer can exceed the annual contribution limit to a HSA
True
Estimate the health care cost of a married couple who has a life expectancy of 20 years by using a needs analysis based off the below info:
estimated health insurance premiums = $6k annually
estimated out of pocket costs = $2k annually
retirement age = 62 years
life expectancy = 20 years
quality of health = good to excellent
inflation = 3%
pmt = 8k n= 20 i = 3 fv = 0 pv ?
pv = $119,019
medicare covers only a maximum of ____ days of skilled nursing care, and only the first ____ days are covered at 100%
100 ; 20
how long is the look back period for Medicaid?
60 months ( 5 years)
if an asset was transferred within 60 months of applying/receiving medicaid how do you determine the length of time the client remains ineligible?
take the amount of asset that was transferred and divide it by the average monthly cost of nursing home care for the region ( i.e. if the asset transferred was $10k and the nursing home cost for the region was $1k per month then the client would be ineligible for another 10 months)
long term care approach where coverage lasts for a set time period and the maximum period is usually 2 - 5 years
Defined period approach
long term care approach where coverage lasts until a specified dollar amount is reached
pool of money concept
what are the activities of daily living?
eating, bathing, dressing, transferring from bed to chair, using the toilet, and continence
how many of the activities of daily living does an insured need to be unable to perform to receive long term care benefits?
2 out of the 6
true or false?
long term care premiums paid by a self-employed individual are a deduction for AGI (above the line)
True
true or false?
long term care premiums paid by an individual are deductible as medical expenses for itemized deduction purposes
True
true or false?
employer payments for group long term care are tax deductible for the employer and are not included in taxable income for the employee
True
can long term care benefits be included in a cafeteria plan or flexible spending account?
no
type of long term care insurance that provides a specific dollar amount of assets which would be protected if the client used up all of the long-term care insurance benefit and had to apply for Medicaid
Partnership Long Term Care
what is the tax rate under social security for medicare hospital insurance?
2.9% split between the employee and employer evenly
people who have been receiving Social Security disability benefits for at least ____ months are also eligible for Medicare benefits
24
hospital care is covered under medicare part ___
A
skilled nursing care is covered under medicare part ___
A
hospice care is covered under medicare part __
A
home health care is covered under medicare part ___
A
physicians’ fees are covered under medicare part ___
B
outpatient services are covered under medicare part ___
B
if you are 65 and receiving Social Security are you automatically enrolled in medicare part A?
yes
true or false?
most people don’t pay a premium for medicare part A
True
how many quarters are needed of medicare covered employment to receive free medicare part A?
40
can you opt out of medicare part B coverage?
Yes
are there premiums associated with medicare part B coverage?
yes, change based on income
medicare pays for hospital services for up to ___ days in each benefit period
90
under medicare, a benefit period ends when the patient is out of the hospital for ____ consecutive days
60
in each benefit period under medicare, covered hospital expenses are paid in full for ___ days
60
in each benefit period under medicare, covered hospital expenses will have a coinsurance for days ___ through ___
61 ; 90
to receive skilled nursing care benefits, what must be proven?
the physician must certify that skilled nursing care or rehab services are needed for a condition that was treated in a hospital within the past 30 days
for days ___ through ___ there will be coinsurance under skilled nursing care benefits
21 ; 100
true or false?
no coverage is covered for custodial or long term care coverage under Medicare Part A
True
true or false?
a nursing home must be certified by Medicare for benefits to be payable
True
benefits that are designated for those who are terminally ill
hospice benefits
terminally ill means you have a life expectancy of ___ months or less
6
what is the maximum length of hospice care?
210 days, unless individual is re-certified as terminally ill
are oxygen tanks, hospital beds, dialysis machines covered under home health care benefits?
Yes
what is the coinsurance for oxygen tanks, dialysis machines, etc?
20%
does Medicare part A provide blood benefits (i.e. receiving new blood)? Does the insured have to pay any costs for this?
Yes and yes the insured is responsible for costs associated with first 3 pints of blood during a calendar year
is there a deductible you have to meet for Part B insurance?
yes
is there coinsurance after the deductible is met under Medicare Part B?
Yes, 80/20
Part B pays ___% of x-ray and pathology services
100
true or false?
medicare part C plans usually have lower premiums and lower coinsurance than the original medicare plans
true
does medicare part D cover generic and brand-name brands?
yes
can medicare part C plans include drug coverage?
yes
does medicare part D have a premium you have to pay?
yes
does medicare part D have a deductible you have to meet?
yes
service of physicians is covered under medicare part ___
B
service of surgeons is covered under medicare part __
B
to qualify for medicaid an individual may only have ___ to ___ liquid funds available
$2k to $3k
is your primary residence included when determining if you are eligible for medicaid?
no
how many motor vehicles can you exclude from medicaid qualification?
1
are household belongings included in medicaid qualification?
no
what is the maximum value of life insurance that can be excluded from medicaid?
$1,500
can an employee sue their employer if they are receiving workers’ comp
no
when an employee is unable to work because of an injury but will recover and return to work; benefits are a % of weekly earning
total temporary disability
when an employee cannot pursue his own occupation but can pursue other work ; benefits are a % of weekly earnings
Partially temporary disability
when in employee is unable to be gainfully employed because of an industrial injury ; benefits are payable for the entire period of disability
total permanent disability
an industrial injury resulting in the loss of a limb ; benefits are based on a schedule
partial permanent disability
is workers comp taxed at the federal level?
no
are unemployment benefits included in federal income for tax purposes?
yes
an insurance policy that combines two or more separate coverages into one policy (fire, theft, personal liability)
homeowners insurance
coverage designed to protect against all perils except those specifically excluded from coverage
opened perils coverage
true or false?
HO-3 policies contain open peril coverage for dwelling and other structures
true
true or false?
HO-5 policies contain open peril coverage for dwelling and other structures
True
how do you calculate actual cash value of a property?
replacement cost - depreciation
true or false?
opened perils coverage has lower premiums than other homeowners policies
false
provides the protection from perils that are specifically mentioned (listed) in the policy ; perils not listed are excluded
named perils coverage
True or False?
HO-3 policies can have open or named perils coverage
True
a named perils coverage that insures the dwelling, other structures, and personal property
HO-2 or broad form
insures the dwelling and other property on an open perils basis
HO-3 or special form
provides protection for personal property on an open perils basis
HO-15 or HO-5 comprehensive form
provides protection for personal property on a named perils basis
HO-4 or contents broad form
insures the personal property of a condominium on a named perils basis
HO-6 or unit owners form
provides protection for dwellings with a FMV that is less than their replacement value
HO-8 or modified coverage form
coverage for property and loss of use of property
Section 1 under a HO policy
coverage for liability and medical expenses
Section 2 under a HO policy
how many different categories are listed under homeowners insurance section 1?
5
what does coverage A under section 1 homeowners insurance cover?
the dwelling
is land included in coverage A under section 1 homeowners insurance?
no
does coverage A under section 1 of homeowners insurance cover materials and supplies to be used in construction?
yes
true or false?
financial planners should recommend at least 90% of the replacement cost value of the home with regard to homeowners insurance
false, they should recommend at least 100%
how much coverage should the financial planner recommend in the below scenario:
Phil has a home with a FMV of $340k. The home has a replacement cost of $325k. The home’s actual cash value is $285k and an assessed value of $310k.
$325k
how much coinsurance should a policy owner have to cover partial losses under a homeowners insurance policy?
at least 80%
Kelly is purchasing a home with a replacement cost of $300k and a value of $350k including the land. How much coverage will she need in order to protect her home in case of a partial loss?
$240k
300 * 80%
what coverage under section 1 of a homeowners policy covers detached structures such as a detached garage?
Coverage B
generally ___% of the amount of insurance on the dwelling applies as insurance on detached structures
10%
does coverage B under homeowners insurance apply to land?
no
does coverage B under homeowners insurance apply to structures that are used for business purposes?
No
does coverage B apply to structures that are rented to someone who is not a tenant of the dwelling?
no
what does coverage C under homeowners section 1 cover?
personal property and contents
generally the amount of insurance on personal property will be ___% of the insurance on the dwelling
50%
True or false?
coverage of personal property can be below 40% of the dwelling coverage if the insured does not have personal property equal to that amount
false, 40% is the lowest it can go
what coverage under homeowners insurance section 1 covers living expenses or loss of income?
coverage D
what is the maximum amount of coverage under coverage D?
20% of the amount of insurance on the dwelling for HO - 2,3,5 and 10% for HO - 1,8
what are the 3 types of benefits under coverage D of homeowners insurance?
living expenses, fair market rental value, and prohibited use
coverage under a homeowners policy that protects the insured from bodily injury and property damage
coverage E
what is the minimum amount of coverage under coverage E?
$100k per occurence
how much will the insurer pay under coverage E?
the lesser of the damages or the amount of coverage
if the insured has liability coverage of $100k and becomes legally liable for $125k, who pays and what amounts do they pay?
the insurer pays $100k and the insured pays the remaining $25k
what does coverage F cover under a homeowners policy?
medical payments to others resulting from when the insured is not liable for the injury
what is the typical amount of coverage for coverage F?
$1,000 per occurence
how much will the insurer cover under the following scenario:
Andrew has a homeowners policy that has an 80% coinsurance clause. His home has a replacement value of $280k and his current coverage is $175k. He experiences a loss of $40,250 and has deductible of $250.
insurance company will pay $31,195
175 / ($280 * 80%) = 78.125%
78.125% * $40,250 = $31, 445
$31,445 - 250 = $31,195
does coverage F cover injuries off the insured’s premises?
Yes
does the insured have to be liable for the injury for coverage F to take effect?
no
how many perils are covered under a HO-1 policy?
12
does a HO-1 policy cover named or open perils?
named
how many perils are covered under a HO-2 policy?
18
does a HO-2 policy cover named perils or open perils?
named
a special form of homeowners policy that provides coverage on dwellings and other structures, on an opened perils basis
HO-3 policy
true or false?
HO-3 policies provide coverage unless the cause of the loss is listed as excluded on the policy
true
true or false?
under a HO-3 policy, if a loss is caused by one peril that is covered and one peril that is not covered, the loss will be covered by the policy
True
the doctrine that states that if a loss is experienced from a covered peril and an excluded peril at the same , the policy will still cover the loss
doctrine of concurrent causation
HO-3 policies provide coverage equal to ___% of the dwelling for personal property
50%
homeowners policy that is designed for renters
HO-4 policy
a type of policy that covers personal property on an open-perils process
HO-5 policy
homeowners insurance that provides coverage for condos
HO-6
a HO-6 policy provides loss of use coverage equal to ___% of the amount of Coverage C (personal property)
40%
a HO-4 policy provides loss of use coverage equal to ___% of the amount of Coverage C (personal property)
30%
a homeowners policy that is used to cover a home who’s replacement cost is greater than it’s fair market value
HO-8 policy
what are the four classes of property that can be covered under replacement cost coverage?
antiques/fine art
obsolete articles that are not stored or being used
memorabilia/souvenirs
property not kept in good working condition
how many perils does a HO-8 policy cover?
12
how many perils does a HO-4 policy cover?
18
how many perils does a HO-6 policy cover?
18
how much loss of use coverage is provided under a HO-1 policy?
10% of insurance on the home
how much loss of use coverage is provided under a HO-2 policy?
20% of insurance on the home
how much loss of use coverage is provided under a HO-3 policy?
20% of insurance on the home
how much loss of use coverage is provided under a HO-5 policy?
20% of insurance on the home
how much loss of use coverage is provided under a HO-8 policy?
10% of insurance on the home
does personal property under a HO-3 policy have coverage for open perils, basic perils, or broad perils?
broad
is personal property under a HO-4 policy covered as open perils, basic perils, or broad perils?
broad
is personal property under a HO-5 policy covered as open perils, basic perils, or broad perils?
open
does personal property under a HO-1 policy have coverage for open perils, basic perils, or broad perils?
basic
does personal property under a HO-2 policy have coverage for open perils, basic perils, or broad perils?
broad
does personal property under a HO-6 policy have coverage for open perils, basic perils, or broad perils?
broad
does personal property under a HO-8 policy have coverage for open perils, basic perils, or broad perils?
basic
true or false?
HO-6 policies do not provide coverage for other structures
True
do other structures under a HO-8 policy have coverage for open perils, basic perils, or broad perils?
basic
do other structures under a HO-5 policy have coverage for open perils, basic perils, or broad perils?
open
do other structures under a HO-4 policy have coverage for open perils, basic perils, or broad perils?
none
do other structures under a HO-3 policy have coverage for open perils, basic perils, or broad perils?
open
do other structures under a HO-2 policy have coverage for open perils, basic perils, or broad perils?
broad
do other structures under a HO-1 policy have coverage for open perils, basic perils, or broad perils?
basic
true or false?
all dwellings are eligible for coverage through homeowners insurance
false
coverage that is based on actual cash value and insures the dwelling, any additions in contact with the dwelling, and any materials or supplies that will be used for construction
Dwelling Coverage A
coverage that is based on actual cash value and insures structures other than the dwelling, such as garagers
Dwelling Coverage B
coverage that provides payment for the amount of rental income the dwelling could have generated
Dwelling Coverage D
coverage D of dwelling coverage is limited to ___% of the policy value for the loss of rent for a year and 1/12 of ___% for each month of lost rents
10% ; 10%
dwelling coverage that is based on the replacement value of a dwelling
Dwelling Coverage 2 Broad Form
under dwelling coverage 2, the insured is required to carry insurance equal to ___% of the replacement cost
80%
dwelling coverage that is provided on an open perils basis
dwelling coverage 3 special form
under a mobile home insurance policy, coverage is for a maximum of __% of the replacement cost
80%
can mobile home insurance be based on actual cash value?
yes
under a mobile home insurance policy, personal property coverage is limited to ___% of the dwelling unit
40%
under a mobile home insurance policy, additional living expense coverage is limited to ___% of the dwelling unit?
20%
provides subsidized flood insurance to property owners in qualified areas
The National Flood Insurance Program
what are the two forms of the national flood insurance program?
- coverage on dwellings and contents
2. coverage on other types of eligible property
insurance on specific items of personal property (including automobiles, motor vehicles, boats) that is not covered under the homeowners policy
Inland Marine Coverage
is inland marine coverage covered on an open perils basis?
Yes
does inland marine coverage require an appraisal?
yes
protection that against legal obligations that arise from the negligent act of an individual
liability coverage
type of personal liability policy that provides asset protection, specifically for those who are high net worth
personal liability umbrella policy
provides coverage for the insured’s legal obligations resulting from bodily injury or property damage
Personal Liability insurance
provides coverage to professionals for injuries resulting from negligence in the exercise of their professional activities
professional liability insurance
covers professionals who’s negligence mostly causes physical harm
malpractice insurance
covers professionals who’s negligence mostly causes financial harm
errors and omissions insurance
provides coverage if the policy is in force when the claim is made, regardless of when the action causing the injury occured
claims made coverage
provides coverage only if the policy is in force when the action that caused injury took place
occurrence form coverage
True or false?
personal liability coverage is sold in increments of millions (1mil, 2mil, etc.)
True
true or false?
automobile insurance involves vicarious liability
true
a risk sharing pool that auto insurance companies use to write high-risk drivers
automobile insurance plan
under an auto insurance policy does comprehensive coverage include coverage for collisions?
No
true or false?
cities usually have lower premiums than rural areas in regards to auto insurance
false, they have higher premiums
true or false?
young males have the highest rates of autombile accidents
true
true or false?
farm use auto insurance is cheaper than busness use
True
what are some factors that go into determining an auto insurance policy’s premium?
age sex territory driving record credit record good student discount number and type of vehicle use of automobile
true or false?
earthquake insurance has a low deductible generally speaking
false
a package insurance policy that provides for losses that result from legal liability, injury to the insured or members of the insured’s family, and damage to or loss of the automobile
personal auto policy
true or false?
PAP (personal auto policy) coverage is only available to individuals not corporations or partnership autos
true
what are the 6 parts of PAP coverage?
liability medical uninsured motorists damage to your auto duties after an accident or loss General provisions
what does 100/300/50 coverage imply in regards to PAP policies?
100 = $100k in coverage for bodily injury per person 300 = $300k in coverage for total bodily injury per accident 50 = $50k in coverage for damage to to property
coverage under a PAP that covers necessary medical and funeral expenses for the insured and any family member
medical payments coverage
an agreement that pays an insured the amount the insured would have collected from an insurance company for a negligent driver if that driver had auto insurance
uninsured motorist coverage
what is the minimum amount of liability insurance in regards to PAP for most states?
$25k
coverage under a PAP that is on an open perils basis
Physical damage coverage
coverage for losses resulting from something other than collision such as breakage of glass, fire, theft, storm damage
comprehensive coverage
true or false?
collision coverage applies regardless of who is at fault
True
which type of endorsement is needed to cover motorcycles or motor scooters?
the miscellaneous type vehicle endorsement
provides coverage for parties who sustain bodily injury regardless of who’s at fault - can collect from own policy
no-fault insurance
type of policy that combines property and liability coverage into a single policy
multiline policy or commercial package policy
designed for the needs of small to medium sized businesses and covers buildings and business personal property
BOP (Business Owners Policy)
is workers’ comp usually covered under a commercial package policy?
no
business/professional use coverage that covers goods in transit, mobile equipment and property, property held by bailees, etc.
inland marine policies
provides coverage for the legal liability arising out of business activities
general liability business coverage
