Health Care Coverage Flashcards
What are the 2 parts of Medicare?
Part A- Hospital
Part B- Medical Insurance
Who is eligible for Medicare?
- age 65
- railroad retirement programs- whether retired or not
-disabled bene’s receiving benefits for at least 2 years-any age= disabled workers at any age, disabled widows of workers age 50 or over, bene’s age 18 or older who became disabled before age 22, disabled qualified railroad retirement annuitiants
What does Part A Cover?
Hospital stAy= Part A
- subject to deductible first 60 days, then 2nd for the next 30 days, 3rd for next 60. Inpatient hospital care limited to150 days for 1 stay
- post hospital - skilled nursing home . Up to100 days
- post hospital- home health services (unlimited)
- hospice care
- patient pays for first 3 pints of blood, Medicare A covers additional
What is Medicare Part B?
Voluntary. Medical Insurance. Patient pays deductible
- Medicare pays 80% of the balance of the approved charges. Leaves client with significant financial exposure- 20% of an unlimited amount.
-Dr’s services in home, office, hospital or nursing home
- covered: diagnostic tests, radiology, mental illness, transfusion of blood, therapy, drugs that can’t be self administered, outpatient services for diagnosis or treatment
- unlimited number of home health services
- free preventative care
—- if you’re still working and have employee coverage, may be wise to delay part b. When employment ends, insured has 3 options: 1. Elect cobra 2. Sign up for part B within 8 months without penalty. After 8 months, you may be required to pay an increased premium. 3. Upon signing up for part B, your medical open enrollment begins.
What is excluded from part b?
- dental, dentures,
- eyeglasses, hearing aids
-most immunizations’ - prescription drugs
What is Medicare part D
D= Drug Manufacturers provide 50% discount. Must have part A & B to get D.
What are Medicare Supplemental (medical policies)
Generally pay for 80% of covered physician charges
10 standard supplemental plans A-J
- must be on A * B
What is an HMO
-wide range of comprehensive health care services to a group of subscribers
- capitation: monthly fee paid to the provider. Individual receives virtuallly all medical care required through year
- gatekeeper: care is managed by primary care physician who is responsible for what care and by who
- not covered outside of HMO (unless emergency)
-children can stay on until 26
What is a PPO ?
-m group of healthcare providers contracting with insurance companies, 3rd party admin to provide care at a reduced fee
-paid on a fee for service basis as needed
-not required to use practitioners or facilities of the PPO. Can go outside of network but benefits aren’t as good
How are health insurance premiums taxed?
- tax deductible by employer
-no tax liability for employee
-benefits are taxable if they exceed any medical expense incurred - self employed persons, partners and more than 2% shareholder employees (s corp) can deduce 1/2 health insurance premiums above the line.
Who is eligible for COBRA?
— companies with more than 20 employees required to offer. Employee cost + employer cost +1.02%
—not automatic- election period starts on day of qualifying event and goest through 60 days of the actual notice of the event to the employee/Ben by the plan admin. After elected, we has 45 days to pay premium.
- terminated or quit- cover employees and dependents- up to 18 months
- employees death, divorce, legal separation or eligibility for Medicare- cover spouse/dependents- 36 months
- loss of dependent status (marriage, age of dependency)- cover depends who status changed- up to 36 months
- if either the employee or a covered family member is disabled ( SS Define), within 60 days of triggering event, period of continuation can be extended by 11 months to 29 months (18+11)
How are HSA contributions made and taxed?
Alongside high deductible health plan, under medicare eligibility, not covered by any other health plan
- catch up of 1000 over age 55
-deductible cont by employer and employee
-adjustment to income on 1040. Above the line deduction
-employer contributions don’t represent taxable income to an employee
-cap of 3659 individual, 7300 family contributions
HDHP min deductible requirements - 1400 individual -2800 family
HDHP max out of pocket requirements - 7050 individuals, 14100 family- can invest it
What is an HSA?
Combo of health insurance policy and separate custodian savings account for future medical expenses
- must have a single annual deductible that applies to all medical expenses covered by the insurance policy. This must be satisfied each year
- distributions are tax free
- penalty for non medical withdrawals are 20% if under 65
-can cover retiree health insurance premiums, prescription drugs, cobra and qualified LTC premiums
- contributions not spent on health care can be carried forward for lifetime and transferred up[on death to spouse tax free
- at death: spousal bene can treat assets like their own. Non spouse been must include assets as ordinary income
- employees are allowed a once in a lifetime rollover from IRA to HSA. Designed to give access to IRA balances for medical expenses.- at contribution limit
What are HSA qualified expenses?
Dr visits and tests
Surgical procedures and hospitalization
Prescription drugs including OTC
Acupuncture and chiro
Eye exams, glasses and laser surgery
Hearing test and aids
Dental
Alcohol and drug abuse
LTC expenses
Feminine hygiene products
Sunscreen
Acne treatments
What happens to IRA distributions after age 65?
Medical expenses will be tax free
Non medical expenses will be taxed as income, but no penalty
— HSA distributions for medical premiums are not income tax free
