Chpt 10 Group LTC

Question 1

Types of GLTCI plans

Answer 1

1. Service reimbursement model
   
   1. 1 Reimbursement is subject to fixed limits
   2. 2 Bills are submitted for review before insurer reimburses
2. Service indemnity model: Fixed benefit for any day services are received, regardless of the actual charges incurred
3. Disability or cash model
   
   3. 1 Benefit paid for each day insured is eligible for benefits whether or not actually using services
   4. 2 Advantage: Admin savings
   5. 3 Disadvantage:
      
      3. 3.1 faster payout make the prem higher
      4. 3.2 susceptible to anti-selection and claim fraud

Question 2

Underwriting GLTCI

Answer 2

1. EEs guaranteed issue (GI) basis if they enroll during the open enrollment period
   
   1. 1 After open enrollment period, need evidence of insurability
2. To reduce anti selection
   
   2. 1 Limiting GI to a finite period
   3. 2 Full time activity at work requirement
3. Non full time EEs complete a health questionnaire
   
   3. 1 height and weight, health history, medications, physicians
   4. 2 Applicants interviewed to screen out cognitively impaired
   5. 3 Spouses use simplified underwriting
4. GLTCI is accept or declined basis

Question 3

GLTCI plan provisions

Answer 3

1. Tax qualified LTC benefit triggers: inability to perform >= 2 ADLs or cognitive (CI)
2. ADLs: bathing, dressing, eating, toile ting, maintaining continence, transferring
3. CI examples: wandering and getting lost, combativeness, inability to dress for the weather, poor judgement in emergencies
4. Elimination/waiting period
5. Covered services: NH, ALF, home and community-based care, hospice, caregiver training, respite care, independence support services, care management services
6. Alternate plan of care
7. Benefit limits
8. Inflation protection
   
   8. 1 periodic increase offers
   9. 1.1 ADV: keeps the premium cost of initial coverage low
   10. 1.2 DISADV: prem increased significantly over time as inflation adjustments are added
   11. 2 Automatic inflation protection: premium is level over time
9. Nonforfeiture benefits
   
   9. 1 insured who lapses receives a reduced, paid-up benefit without continuing items
   10. 2 types: shortened BP, reduced paid-up benefit, extended term nonforfeiture

Question 4

GLTCI other plan features

Answer 4

1. Death benefit
2. Cash alternative benefit
3. Bed reservation
4. Spousal riders and discounts: prem discounts, spouse waiver of prem, survivor waiver of prem
5. Restoration of benefits
6. International coverage
7. Shared lifetime maximum benefit
8. Policy exclusions: pre existing conditions, mental or nervous disorders, alcoholism and drug addiction, treatment in a govt facility, service by a member of immediate family, services paid under other insurance policy or Medicare

Question 5

GLTCI claims administration

Answer 5

1. Benefit eligibility assessment
   
   1. 1 if written documentation from physician or LTC provider, the process can complete without onsite assessment
   2. 2 otherwise, onsite assessment at insured’s home
   3. 3 reassessments conducted at least once a year
2. Care management
   
   2. 1 provider develops a plan of care
   3. 2 insurer will confirm plan a appropriate
   4. 3 Care management in LTCI different than in medical
   5. 3.1 medical focuses on cost and utilization containment
   6. 3.2 medical restricts which providers, procedures
   7. 3.3 LTC focuses on services that allow independence

Question 6

The group LTC sales and marketing process

Answer 6

1. First sale: selection of the insurer by the plan sponsor
   
   1. 1 Brokers and benefit consultants learn about value of GLTCI to a plan sponsor
   2. 1.1 Keeps benefits competitive with no cost if voluntary
   3. 1.2 attract and retain quality EEs
   4. 1.3 Reduce productivity loss through missed work
   5. 1.4 Responding to the expectation of EEs
   6. 2 Requests for proposals (RFPs) are distributed to insurers
2. Second sale
   
   2. 1 Enrollment campaign educates about need for LTCI
   3. 1.1 Protecting retirement savings, preserving freedom of choice, avoiding becoming a burden to family
   4. 2 generating high participation is critical to viability

Question 7

GLTCI tax issues

Answer 7

1. HIPAA (health insurance portability and accountability act)
   
   1. 1 tax incentives for purchasing qualified LTC policies
   2. 2 Deductibility of premium paid by ERs and EEs, ER contribution not taxable to the EE, benefits not taxable income to beneficiary
   3. 3 LTCI Prem’s acceptable for MSAs, HSAs and MRAs
   4. 4 LTCI not permitted in a Sec 125 cafeteria plan or FSA
2. Some states enacted either a tax deduction or a tax credit for qualified plan premiums