Ch. 1 Health Flashcards
Health insurance
general way of describing insurance against loss through sickness or accidental bodily injury. It is also called accident and health, accident and sickness, sickness and accident, or disability insurance. It is important to remember the general term “health insurance” applies to many different types of insurance, not just the medical insurance that pays for doctor and hospital visits
Disability (income) insurance
a form of insurance that insures the beneficiary’s earned income against the risk that a disability creates a barrier for a worker to complete the core functions of their work
Medical expense insurance
pays benefits for nonsurgical doctors’ fees commonly rendered in a hospital; sometimes pays for home and office calls (standard health care insurance)
Interim coverage
a short-term policy purchased on an interim basis typically when in between jobs or waiting for a new policy to start
Renewability provisons
define the rights of the insurer to cancel the policy at different points during the life of the policy
What are the 5 principal renewability classifications
cancellable, optionally renewable, conditionally renewable, guaranteed renewable, and noncancellable
Cancellable policies
allows the insurer to cancel or terminate the policy at any time. This type of renewability is prohibited in most states
Optionally renewable policies
give the insurer the option to terminate the policy on a date specified in the contract. If the insurer decides to renew (not cancel) the policy, they also have the option (and usually choose to) increase the premiums on the anniversary date
Conditionally renewable
policies give the insurer the option to terminate the policy only in the event of one or more conditions stated in the contract. Typically, these conditions are age-related
Guaranteed renewable policies
specify that the policy MUST be renewed (usually until the insured reaches a specified age). However, the insurer still has the option (and usually choose to) increase the premiums on the anniversary date
Noncancellable policies
state the policy cannot be cancelled nor can its premium rates be increased under any circumstances. Disability policies are the most common noncancellable (noncan) policies
Nonrenewable policies
are for predetermined terms of a year or less (typically short-term health insurance) and are considered temporary
Cafeteria plans
a flexible benefits program offered by employers that allows employees to choose from a range of benefits to suit their individual needs. Employees are given a set amount of money or credits to allocate towards various benefits, such as health insurance, dental coverage, retirement plans, and other perks
Business continuation plans
provide a way to help a business continue in the event an owner or key employee dies or in the event of a disabling sickness or injury
Business overhead expense insurance
is a form of disability income coverage designed to pay necessary business overhead expenses, such as rent, should the insured business owner become disabled. Overhead expenses include such things as rent or mortgage payments, utilities, telephones, leased equipment, employees’ salaries, and the like
Disability buy-sell plans (disability buy-out agreement)
a financial arrangement designed to protect a business in the event that an owner or key employee becomes disabled and is unable to work. It involves purchasing disability insurance that provides funds to buy out the disabled individual’s share of the business. This ensures that the business can continue to operate smoothly, and the disabled owner or their estate receives fair compensation for their ownership stake
Coordination of benefits
designed to prevent duplication of group insurance benefits
Enrollment period
the limited period of time during which all members may sign up for a group plan
Enrollment card
must be completed and signed by a new employee during the open enrollment period to enroll in group insurance
Waiting period
a period of time (often 12 months) beginning with your effective date during which your health insurance plan does not provide benefits for pre-existing conditions. This period may be reduced or waived based on any prior health care coverage you had before applying for your new health insurance plan
Probationary period
a set time frame during which new employees or policyholders must wait before they can access certain benefits or coverage. often used to manage costs and ensure that coverage is provided to individuals who are likely to remain with the company for a longer term
Health insurance portability and accountability act (HIPPA)
provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs
Conversion privilege
allows policyholders to switch from a group health insurance plan to an individual policy without undergoing a new medical exam or proving insurability
Preexisting conditions
an illness or medical condition that existed before a policy’s effective date; usually excluded from coverage, through the policy’s standard provisions or by waiver
Creditable coverage
previous coverage under another insurance plan when there has not been a break in coverage of 63 days. An individual’s waiting period for pre-existing conditions is reduced or eliminated altogether when he or she has creditable coverage
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
federal legislation which extends group health coverage to terminated employees and/or their families at the individual’s expense, for up to 18 months. COBRA coverage may be extended beyond 18 months in certain circumstances. COBRA rules typically apply when an employee loses coverage through loss of employment (except in cases of gross misconduct) or due to a reduction in work hours
Nonoccupational coverage
refers to insurance that provides benefits for injuries or illnesses that are not related to work or occupational activities
Health savings accounts
a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit
Accidental means
coverage that provides benefits when an injury or illness results from an accident caused by unforeseen or unintended events. For example, if an individual sustains an injury while engaging in a risky activity like skydiving, the insurance would cover the injury only if it was caused by an accident and not by a pre-existing condition or negligence
Accidental results
coverage that provides benefits specifically for injuries or damages caused by accidents. This type of coverage is designed to address medical expenses, treatments, and other costs resulting from unexpected and unintentional injuries, such as those from falls, car accidents, or other unforeseen events
Limited risk policies
provides coverage for specific kinds of accidents or illnesses, such as injuries received as a result of travel accidents or medical expenses stemming from a specified disease
Special risk policy
covers unusual hazards normally not covered under ordinary accident and health insurance. An actress who insures her legs for $1 million or a pilot test-flying an experimental airplane who obtains a policy covering his life while flying that particular plane are both purchasing special risk policies
reimbursement plans
arrangements where the insured pays for medical expenses out of pocket and then submits a claim to the insurance company for reimbursement. Once the claim is approved, the insurer reimburses the insured for the covered expenses, up to the policy limits
What are the 3 basic categories of health coverage?
Medical expense insurance, disability income insurance, accidental death & dismemberment insurance
What are the 3 types of disability income policies used for business?
Disability buy-sell, business overhead expense insurance, disability buy-out
Maternity benefits
Any policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives, and services of licensed birth centers
Subrogation
The reimbursement of benefits for the treatment of a beneficiary’s injuries caused by a third party
