Chapter 6 - Types of Health Insurance Policies Flashcards
What is the deductible for basic hospital expense coverage?
None
What is the main focus of HMO coverage?
Preventative care
How does a gatekeeper control the cost of healthcare?
By only making the necessary referrals
In exchange for a higher premium, what do PPOs offer over HMOs?
More flexibility between in-network and out-network providers
What are FSAs and how can they be used?
Flexible Spending Accounts can be used to pay medical and dental expenses for employees and their dependents
What are HSAs and how can they be used?
Health Savings Accounts can be used to pay for qualified medical expenses and OTC medications
What are the HSA nonhealth withdrawal penalties for under and over age 65?
20% for under 65
Nothing for over 65
What is an elimination period?
The period of time during which disability coverage will be denied to eliminate short-term disability coverage and reduce excessive claims (usually 3-6 months)
What is a probationary period?
A waiting period, often 10 to 30 days, from the policy issue date during which benefits will not be paid for illness-related disabilities
Compare group vs individual disability plan benefits
Group plan benefits are based on a percentage of the employee’s income
Individual benefits are a flat amount
Compare AD&D principal vs capital sum
Principal sum is the total face amount
Capital sum is a percentage of the face amount
What must be guaranteed with LTC policies
Long-Term Care policies must be guarantee renewable
What type of care may be administered by nonmedical personnel?
Custodial care
What two types of care require medically licensed personnel?
- Skilled care
- Intermediate care
How long can coverage for dependents under COBRA be extended in the event of the employee’s divorce or death?
36 months
What do limited policies cover?
Specific sickness or accident only
What must health insurers offer as an essential health benefit under a health plan or as a stand-alone dental plan?
Pediatric dental coverage (for children 18 or younger)
What is a MET
Multiple Employer Trust - a group of small employers in the same line of work that get a group insurance policy together
Compare own vs any occupation disability coverage
Own Occupation - unable to do your specific occupation. More favorable to insured.
Any Occupation - unable to do any occupation. More favorable to insurer because you might still be able to do some other occupation than your own so you would get no insurance benefit.
What percent of the full benefit does partial disability pay?
50%
How long is the waiting period to receive Social Security Disability benefits?
5 months
What is the PIA?
Principal Insurance Amount (of Social Security) - a formula that determines the level of benefits
What is the purpose of respite care in long-term care insurance?
To provide relief for a major caregiver (usually a family member)
What does hospital indemnity insurance cover?
A fixed amount each day that the insured is in the hospital
What six types of injuries and services will be excluded from major medical coverage?
- Injuries caused by war
- Intentionally self-inflicted injuries
- Injuries covered by workers compensation
- Regular dental/vision/hearing care
- Custodial care
- Elective cosmetic surgery
Who are the parties in a group health contract?
The employer and the insurer
In group insurance, what is the name of the policy?
Master policy
In order to be eligible for coverage by an HSA, an individual must also be covered by what type of health plan?
High Deductible Health Plan (HDHP)
Can Alzheimer’s disease be excluded from coverage under a long-term care policy?
No, organic cognitive disorders, such as Alzheimer’s or Parkinson’s must be covered
In health insurance, what is considered a sickness?
An illness that first arises while the policy is in force
What are the three types of basic medical expense insurance?
Hospital, surgical and medical
What are the two types of Flexible Spending Accounts?
Health care accounts and dependent care accounts
In what type of health plans are providers paid for services in advance, regardless of the services provided?
Pre-paid plans
What two types of groups are eligible for group health insurance?
Employer-sponsored and association-sponsored groups
What size companies are eligible for Health Reimbursement Accounts (HRAs)?
All sizes
Who determines eligibility and contribution limits in HRAs?
The employer determines both
When an employee covered under an HRA changes employers, what happens to the HRA?
It stays with the employer
Do major-medical health plans charge a deductible?
Yes
An AD&D insured loses one limb in an accident. What, if any, benefit will she be paid?
The capital amount in a lump sum
Are short-term disability plans renewable?
No
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital
What are Point-of-Service (POS) plans a combination of?
HMOs and PPOs
Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within
90 days
COBRA applies to employers with at least how many employees?
20
Which long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?
Adult day-care
Compare a policy that uses the accidental means definition to a policy that uses the accidental bodily injury definition.
Accidental bodily injury only requires the resulting injury to be unexpected
Accidental means injury requires the cause of the injury itself to be accidental
As it pertains to group health insurance for terminated employees, COBRA stipulates that
Group coverage must be extended up to a certain period of time at the former employee’s expense
What are the penalty and tax implications for an HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense?
There will be a tax but no penalties
Which disability policy provision does full coverage for dismemberment or total and permanent blindnes describe?
Presumptive disability
When an insurer combines two periods of disability into one, the insured must have suffered a
Recurrent disability
What special policy covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage?
Special Risk Policy
How often must group plans pay short-term disability benefits?
Weekly
Benefit periods for individual short-term disability policies will usually continue from
6 months to 2 years
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness
How do PPOs keep their costs down?
By channeling patients to providers that discount services
The corridor deductible derives its name from the fact that it is applied between the basic coverage and the
Major medical coverage
Group long-term disability plans provide monthly benefits usually limited to what percent of the e employees salary?
60%
The type of dental plan which is incorporated into a major medical expense plan is a/an
Integrated plan where any deductible amount can be met by either dental or medical expenses
What is the typical deductible for all types of basic medical expense insurance?
$0
In order to maintain coverage under COBRA, how soon after termination must an employee transition coverage?
Within 60 days
How are contributions to FSAs, HSAs and HRAs taxed?
All three are pre-tax contributions
What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?
Diagnostic and preventive care
An insured’s long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?
$120 per day
What does basic medical expense coverage definitely NOT cover?
Surgeon’s services
How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in Florida?
12
How can a new physician be added to the PPO’s approved list?
Agree to follow the PPO standards and charge the appropriate fees
In a ________ approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery
Relative value
If the insured decides to go to a physician who is not a PPO provider, what happens?
The PPO will pay reduced benefits
What is the minimum number of members for an association to buy group insurance for its members?
100
True or false, group disability insurance is for both on and off the job?
False
Worker’s comp covers on the job injuries. Group disability covers off the job injuries.
What five areas do general disability policies NOT cover?
- Losses caused by war
- Military service
- Intentionally self-inflicted injuries
- Overseas residence
- Injuries suffered while committing or attempting to commit a felony
Are LTC policies available as endorsements to both life and health policies?
To life only, not health
Are LTC policies available no both individual and group basis?
Yes
In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?
Conversion factor
In order to determine the amount payable for a given procedure, the assigned points (relative value) of 200 are multiplied by a conversion factor. This conversion factor represents the total amount payable per point. For example, if the conversion factor is $10 and the point value is 200, the policy would pay $2,000 for the procedure (200 x 10).
What coverage, written in conjunction with hospital expense policies, covers surgeons’ fees, anesthesiologist, and the operating room?
Basic Surgical Expense
The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?
Employers are no longer forced to offer HMO plans
