CFP - Health Insurance

Question 1

For health plans issued after September 2010, what has been eliminated?

Answer 1

The lifetime limits cap on new health policies

Question 2

What does 80/20 coinsurance mean?

Answer 2

Insurer pays 80% of the expenses above the deductible and the insured pays 20% of expenses above the deductible

*typically a maximum of 3 deductibles per family

*Coinsurance portion applies to each family member

Question 3

Patient Protection and Affordable Care Act (PPACA) did what?

Answer 3

Requires most U.S. citizens and legal residents to have health insurance

*those w/o coverage pay a tax penalty of $695 - $2085
OR
2.5% of household income above the filing threshold,
WHICHEVER IS GREATER

EXCHANGE FOR: income 133-400% of the federal poverty level

Employer with 50+ assessed $2000/per FTE fee

Question 4

What is an HMO? (Health Maintenance Organization)

(also known as the NETWORK MODEL)

Answer 4

-Comprehensive health care in return for premium

-Disadvantage: No coverage outside HMO

Question 5

What is a PPO? (Preferred Provider Organization)

Answer 5

-Network of health care providers with who an employer or insurance company contracts

-Provider offers a discount on services

-Insured receives a high rate of reimbursement in network

-Ability to chose outside of network if desired

Question 6

What is Managed Care? (Primary Care Physician - PCP)

Answer 6

Physician provides referrals

Small copayment/deductible

Question 7

What is an HSA? (Health Savings Account)

Answer 7

Provide employees/individuals seeking a health care tax deduction for amounts contributed to their accounts as well as use of the money and

earnings tax-free for qualifying medical expenses

Employer/Employee can both make contributions

Individual must have a high deductible

Question 8

What disqualifies eligibility for an HSA?

Answer 8

-covered by a non HDHP

-FSA/HRAs can disqualify

-Medicare participation disqualifies

-Dependents are disqualified

Question 9

Age for catch-up contributions to an HSA?

Answer 9

55 and older

Question 10

HSA contribution limits

Answer 10

Single $3850

Family $7750

Question 11

Are HSA contributions deductible for the employee? Employer?

Answer 11

Yes and Yes

Question 12

Do OTC drugs qualify for HSA?

Answer 12

yes

Question 13

Do health insurance premiums qualify for HSA?

Answer 13

No unless:

LTC premium
COBRA premium
Health care coverage while receiving unemployment
Medicare and other health coverage if 65+
Dental care
Vision

Question 14

Penalty for non-qualified medical expenses

Answer 14

Subject to income tax

and

20% penalty if taken before 65

Question 15

Characteristics of a Guaranteed Renewable Policy?

Answer 15

Right to renew is guaranteed until a specific age

-Can’t cancel, but can raise premiums

ALL policies must be guaranteed renewable under PPACA

Question 16

Is group health insurance taxable to the employee?

Answer 16

NO

Question 17

Health Insurance Portability and Accountability Act

Answer 17

HIPAA - obtain health insurance when changing jobs, laid off

No restrictions on preexisting conditions if switching from one group plan to another group plan

12 month exclusion window

Question 18

COBRA coverage rules

Answer 18

Employer may charge 2% for administrative expenses

Applies to loss of coverage for covered employee (death, termination, covered employee separates from spouse, eligible for Medicare, dependent child no longer eligible)

COBRA applies 20+ employees

Question 19

COBRA coverage specific periods of time

Answer 19

18 months: reduction in hours / termination

36 months: death, divorce, Medicare eligibility, loss of dependency status

Up to 29 months if employee meets SS definition of disabled

Question 20

How many days do employees have to make a COBRA election?

Answer 20

60 days

Question 21

MEDICAID is for

Answer 21

Nation’s poor

state or federal or combo of the 2

ACA expanded Medicaid coverage

Question 22

MEDICAID penalty period

Answer 22

Based on the amount of gifted assets in the 5 years / 60 months prior to entering a nursing home

Question 23

Does Medicare pay of the patient is incapable of realizing an improvement in his/her condition?

Answer 23

NO

Question 24

Private Long-Term Care Policy

Answer 24

Provides coverage for nursing home stays and other types of care
1 Skilled Nursing
2 Intermediate Nursing
3 Custodial Care
4 Home Health Care
5 Assisted Living
6 Adult Day Care
7 Hospice Care

Question 25

Eligibility for benefits under LTC

Answer 25

Can’t perform 2/6 ADLs

OR

Substantial cognitive impairment

Question 26

Are LTC care premiums tax deductible?

Answer 26

Yes, LIMITED BASED ON AGE

Benefit is also tax-free as long as a policy is qualified

Qualified = Expected to need care for at least 90 days
OR
Substantive cognitive impairment

Question 27

How are LTC dividends used?

Answer 27

To reduce future premiums

does not pay for expenses covered under Medicare