Chapter 15 : Medical Expense Insurance

Question 1

Corridor Deductible

Answer 1

After the basic coverage is exhausted, when a major medical policy is supplementing basic coverage that contains no deductible.

Question 2

Integrated Deductible

Answer 2

Used when a major medical plan is supplementing basic coverages.

Question 3

Carryover Provision

Answer 3

Allows an insured to defer current health charges to the following year’s deductible instead of the current year’s deductible.

Question 4

Stop-loss

Answer 4

Designed to stop the company’s loss at a given point, as an aggregate payable under a policy, a maximum payable for any one disability or the like

Question 5

Medical Saving Accounts (MSA’s)

Answer 5

Self-employed + small businesses
Individual: $2400
Family: $4800
Catchup: n/a
HDHP Minimum Deductible for Individual: $2400
HDHP Minimum Deductible for Family: $4800
HDHP Maximum Out of Pocket for Individual: $4800
HDHP Maximum Out of Pocket for Family: $8750

Question 6

Flexible Savings Account/Flexible Spending Accounts

Answer 6

Tax-advantaged accounts that can be set up through a cafeteria plan of an employer.
Employees sets aside a portion of earnings to pay for qualified medical expenses

Question 7

Limited Risk Policies

Answer 7

AKA Dread Disease Policy
Specific diseases
Paid as a scheduled, fixed-dollar mount for specified perils or medical procedures

Question 8

Relative Value Approach

Answer 8

Specified set of units assigned to every surgical procedure to determine the benefit.

Question 9

Non-scheduled plans pay benefits based on ?

Answer 9

Usual customary and reasonable basis
Comprehensive contacts and major medical policies

Question 10

Surgical Schedule Approac

Answer 10

Every procedure has a dollar amount

Question 11

Major medial expense insurance

Answer 11

Offers high maximum benefits and broad coverage under one policy written for a one-year term

Question 12

Intergrated deductible

Answer 12

Used in comprehensive plans (basic + major medical plans)

Question 13

Individual Mandate

Answer 13

Shared responsibility on the part of most individuals to have minimum acceptable coverage or pay a tax penalty beginning in 2014.

Question 14

Open Enrollment

Answer 14

November 1 - December 15

Question 15

Special Enrollment (4)

Answer 15

1. Loss of job
2. Marriage
3. Birth of child
4. Divorce

Question 16

Medical Loss Ratios

Answer 16

Health insurers must spend a % of premium dollars on direct medical costs:

80% - individual market
85% - group market

Question 17

Bronze Plan

Answer 17

60% - insurer
40% - insured

Question 18

Silver Plan

Answer 18

70% - insurer
30% - insured

Question 19

Gold Plan

Answer 19

80% - insurer
20% - insured

Question 20

Platinum Plan

Answer 20

90% - insurer
10% - insured

Question 21

Out of pocket maximum

Answer 21

$8550 - yearly, individual
$18,100 - family

Question 22

HSA

Answer 22

Tax-deductible
Grows tax free; if used for medical expenses then comes out tax free
Penalty 20%
Max contribution: $3600
$7200 : family
55-65 y/os’ can contribute catch of 1000
rollover year after year

Question 23

Health Reimbursement Accounts (HRAS)

Answer 23

Funded and established by employer
No annual contribution limit
No funds to employees; based on reimbursement
Not portable

Question 24

Archer Medical Savings Account (3)

Answer 24

Small employers of no more than 50 employees
No contribution limit
Participants must be in a high-deductible plan

Question 25

Flexible Spending Arrangement

Answer 25

Tax-advantaged accounts setup through a cafeteria plan of an employer.
Cannot join if they have HSA or MSA
Does NOT rollover year to year
Does NOT require participants to have HDHP
Employers cannot reimburse employees
Limits: $2750 yearly

Question 26

Consumer Driven Health Plan (3 Parts)

Answer 26

1. Tax advantage savings
2. Corridor deductible
3. Qualifying high deductible insurance policy