Ch 4 Flashcards
Disability policy that cannot be canceled by the insurance company and the company cannot make any changes to the policy.
Non-cancelable
Disability policy that cannot be canceled by the insurer but the insurer can raise premiums.
Guaranteed tenewable.
Disability policy that allows insurer to cancel the policy if renewal conditions are not met.
Conditionally renewable.
What percentage of income does individual disability insurance pay?
60-80%
Is individual disability insurance purchased pre-tax? What is the treatment of the benefit?
Not pretax. Benefit tax-free.
If an employer pays for group disability, who gets tax deduction. What is tax treatment of benefit?
Employer gets tax break. Employee’s benefit is taxes. If employee contributes some it is pro-rated.
Does coordination of benefits under a group policy consider individual disability?
Most often it does not.
Social security definition of disability?
Unable to engage in any substantial gainful activity because of a physical or mental impairment. The impairment must be expected to last at least 12 months or result in death.
What is the monthly benefit amount under social security disability?
It is generally equal to the primary insurance amount.
How long is the waiting period under SD disability?
5 months.
How does traditional health insurance work?
Chose own provider
Get reimbursed after deductible paid
Usually provide basic coverage and major medical coverage
What is the downside to managed care plans?
Flexibility is reduced
This health plan contracts with providers to offer various services. It has a gatekeeper physician. Providers get paid a monthly fee.
HMO
Type of managed care plan which charges insurers an access fee for use of the network. It negotiates with healthcare providers to set fees for guaranteed service levels. Providers only get paid for services rendered.
EPO
Percentage of USA covered under governments disability insurance?
75%
Difference in payment to physicians EPO vs PPO.
HMO paid a fee regardless of services provided.
EPO only pays for services rendered.
Health plan that gives more coverage if you go outside the network. Also one of the most expensive plans. No gatekeeper.
PPO
What are a few pluses of a consumer-directed health plan?
Low premiums
Pretax health savings account
When does Medicare begin?
65
How do you qualify for Medicare?
Must work 10 years
What are the 4 parts of Medicare?
A: hospital coverage (in-hospital services, hospice). Does NOT pay for custodial care.
B: medical insurance coverage (necessary non-hospital services
C: managed care version of Medicare (Medicare advantage)
D: prescription drug coverage
Who pays for Medicare A?
Payroll taxes
Who pays for Medicare part b?
Monthly premium paid by beneficiaries. Can get state assistance if the person has limited income or resources.
When does someone have to enroll in Medicare Part B?
3 months before turning 65. You have 7 months to enroll.
Who pays for part c?
Insured. You have to pay for part b AND part c.
Who pays for Medicare part B?
Beneficiaries pay monthly premium and part of prescription cost.
Which section of Medicare does medical supplement?
Parts a and b. C includes medigap so not necessary.
Who is largest recipient of Medicaid benefits?
Children
Can handicapped children be eligible for Medicaid of parents aren’t?
Yes.
This type of policy typically covers nursing home care, intermediate nursing care, and custodial care.
Long-term care.
What determines qualification for ltc benefit?
Unable to perform 2 ADLs or if the insurer is cognitively impaired.
What do you compare when shopping for LTC?
Benefit period
Daily benefit
Elimination period
What are exclusions to LTC?
Services provided by a family member.
Service for which no charge is made.
Services provided outside the US
Services resulting from a suicide attempt
Services for alcohol or drug addiction
Treatment provided in a government facility
Services for which benefits are available under Medicare
What are the nonforfeiture options of a LTC?
If canceled by insurer you can purchase same benefit for shorter period or reduce the benefit for the existing benefit period.
What is the waiver of premium provision of a LTC?
Don’t have to pay premium while receiving benefits.
What is the tax treatment of a qualified LTC policy?
Premiums deductible as medical expenses (but they are adjusted by 7.5% AGI phaseout. Benefits are tax-free though.
Group plans can be deducted pre-tax.
Percentage of disabling accidents that are work related?
10
What does the affordable health care act of 2010 do?
It requires insurers to spend set percentages of premiums received on direct medical care or improvements in the quality of care provided.
What can the definition of disability be based on?
Inability to perform duties or on the amount of earned income lost.
Can the family of a disabled worker also receive benefits under certain circumstances?
yes
pays percentage of benefit based on percentage reduction in income following period of total disability
residual disability coverage
managed-care plan which charges insurers an access fee for use of the network, negotiates with healthcare providers to set fee schedules for guaranteed service levels, and helps resolve issues between insurers and healthcare providers?
Exclusive provider organization
What is the compound rate used by most LTC policies to determine inflation protection?
5%
What percentage of SSDI benefits were approved in 2005?
39%
Are individual disability benefits taxable?
No. Purchased with after-tax earnings.
Disability rider that raises the benefit automatically to reflect increases in the cost of living.
AIR automatic increase rider
On a short-term group disability plan what is the usual elimination period and definition of disability?
1-7 days but maybe no wait for accidents; own occupation
On group LTD what is the elimination period and definition of disability?
3-6 months; tow-tier definition. Initial period own occupation. After that (3-5 years it changes to any occupation for which the worker is suited with their education and experience
What is a disadvantage of group disability?
Benefits are taxable.
With an EPO plan which doctors can an insured see?
Only doctors in the network.
What are the three parts of a consumer-directed health plan?
High deductible medical expense policy
Tax favored savings accounts by (HSA or HRA)
Access to informational tools
Advantages of consumer-directed plans.
Expenses of administering and paying small claims is eliminated.
Insureds are given incentive to control costs.
Criticism of CDHP.
Might avoid preventive care.
Favor healthy people and higher tax brackets.
Ignore problem of the uninsured.
How do you qualify for Medicare?
65 an eligible for social security retirement benefits, railroad benefits or SS survivor benefits.
Civilian Federal Government employees 65+
65+ who are dependent of fully-insurer workers age 62+
Disabled people who got SSDI for last 2 years
Fully or currently insurer workers, their spouses, and dependent children who need dialysis or kidney transplant.
How is Medicare part a funded?
Payroll tax from employer and employee.
How is Medicare b funded ?
Federal government and monthly premium pa f by insured
What does Medicare a cover?
Inpatient Critical access hospitals Skilled nursing facility to 100 days Hospice Some home healthcare
