Chapter 3: Health Insurance

Question 1

How long is the health insurance grace period, typically?

Answer 1

31 days

Question 2

What is an incontestability clause

Answer 2

Protects the insured by preventing the insurer from challenging their insurance contract after it has been in force for a specific period of time.

Question 3

Difference between managed care plans

HMO v. PPO v. POS

Answer 3

HMO: A group of physicians to provide covered comprehensive care and requires a primary care gatekeeper
PPO: An arrangement with health care providers for a discounted rate of care. No gatekeeping
POS: A hybrid which encourages in-network usage through lower deductibles, out-of-network has higher deductibles/copays

Question 4

What are the COBRA coverage periods based on qualifying events:
Reduction in hours/normal termination
Employee reaches Social Security definition of disabled
Death of a covered employee/divorce/employee becomes eligible for medicare

Answer 4

Reduction in hours/normal termination: 18 months
Employee reaches Social Security definition of disabled: 29 months
Death of a covered employee/divorce/employee becomes eligible for medicare: 36 months

Question 5

What is the minimum number of employees an employer needs for COBRA to be applicable?

Answer 5

20 employees