Health-Care Plans - Defining and Exploring Health-Care Plans

Question 1

Health-care plans

Answer 1

Plans that cover the costs of services that promote sound physical and mental health

Question 2

2 types of health-care plans

Answer 2

1. Fully insured plans

2. Self-funded plans

Question 3

2 types of fully insured plans

Answer 3

1. Individual coverage

2. Group coverage

Question 4

5 types of group coverage plans

Answer 4

1. single-employer arrangement
2. pooled coverage
3. multiple employer trust
4. voluntary employee beneficiary association
5. multiemployer (Taft-Hartley) plans

Question 5

Fully-insured plans

Answer 5

Plans that are based on a contractual relationship with one or more insurance companies to provide health-related service for employees and their qualified dependents

Question 6

Individual coverage

Answer 6

A person chooses to purchase health-care coverage outside the employment setting for herself and qualified dependents

Question 7

Group coverage

Answer 7

Extending coverage to most or all employees, the basis for employer-sponsored health-care plans

Question 8

Single-employer arrangement

Answer 8

An employer arranges for group coverage of all employees under one policy

Question 9

Pooled coverage

Answer 9

An employer pools money with other employers to provide coverage for its employees under one policy. Oftentimes, employers in the same industry with similar workforces use pooled arrangements. Employer contributions are based on a percentage of payroll, cents per hour, or dollar amount per worker, per week or per month.

Question 10

Multiple employer trust

Answer 10

This arrangement is made for employers with relatively small workforces. A single master trust holds each employer’s contribution, and premiums are paid from the trust.

Question 11

Voluntary employee beneficiary association

Answer 11

This arrangement permits tax-deductible contributions to a trust to fund health-care benefits or other types of employee benefits. The return on investment of contribution is also tax-free.

Question 12

Multiemployer (Taft-Hartley) Plans

Answer 12

Multiple employers sponsor pension and welfare plans (health care); these plans are usually cosponsored by small companies within certain industries such as construction.

Question 13

Self-funded plans

Answer 13

The employer determines what benefits to offer, pays medical claims for employees and their families, and assumes all of the risk.

Question 14

Single coverage

Answer 14

Extends benefits only to the covered employee

Question 15

Family coverage

Answer 15

Offers benefits to the covered employee and qualified dependents