Health Insurance Flashcards
4 major classes of how medical expense insurance is divided
- hospital expense
- surgical expense
- physician’s expense
- major medical
stop loss
the maximum amount that the insured must pay in coinsurance payments
out-of-pocket
insured only pays the out-of-pocket amount as the max for group hospitalization and major medical
what does PPACA stand for?
Patient Protection and Affordable Care Act
what are the 4 benefit categories of PPACA?
- bronze plan
- silver plan
- gold plan
- platinum plan
bronze plan
represents minimum allowable coverage and covers 60% of the benefit costs of the plan, with an out-of-pocket limit equal to the HSA limit
silver plan
covers 70% of the benefit costs of the plan, with the HSA out-of-pocket limit
gold plan
covers 80% of the benefit costs of the plan, with the HSA out-of-pocket limit
platinum plan
covers 90% of the benefit costs of the plan, with the HSA out-of-pocket limit
what does HMO stand for?
Health Maintenance Organization
what is an HMO?
- delivers comprehensive health care in return for a periodic payment (premium)
- care is managed by a primary care physician (gatekeeper) who determines what care is received
what is the primary disadvantage of an HMO?
there is no coverage outside of the HMO
what does PPO stand for?
Preferred Provider Organization
what is a PPO?
- network of health care providers with whom an employer or insurance company contracts
- provider offers a discount on services
- insured receives a high rate of reimbursement when using providers within the organization
- insured may seek care elsewhere, but will suffer a penalty in the form of increased deductibles and coinsurance
- preserves an employee’s option to choose a provider outside of the network
what does PCP stand for?
Primary Care Physician
what does HSA stand for?
Health Savings Account
what is an HSA?
-provide employees and individuals seeking health care a tax deduction for amounts contributed to their accounts as well as use of the money and earnings tax-free for qualifying medical expenses
what is the requirement to be eligible for an HSA?
the individual must have medical insurance under a high deductible health plan (HDHP)
what does HDHP stand for?
High Deductible Health Plan
for whom are HSA contributions deductible?
- for the employee who contributes
- for the employer who contributes
- for any eligible family members who receive contributions on their behalf
when are distributions from an HSA tax-free?
when used for qualified medical expenses
what medical expenses are not considered qualified for an HSA distribution?
- over-the-counter drugs (unless taxpayer has a prescription)
- cosmetic surgery costs
what happens when an individual takes a distribution from an HSA for a non-qualified medical expense?
distributions are subject to income tax and a 20% penalty (if taken before age 65)
what does it mean if a health insurance policy is noncancellable?
- these policies are continuous and guarantee an insured the right to renew until a specified age or stated number of years
- insurer cannot raise premiums and cannot cancel the policy
what does it mean if a health insurance policy is guaranteed renewable?
- the right to renew is guaranteed until a specific age or stated number of years
- insurance company cannot cancel the policy, but they can raise the premiums as long as the premiums are raised for an entire group or class of policyholders
group health insurance
- employer-provided health insurance
- not taxable to the employee
what does HIPAA stand for?
Health Insurance Portability and Accountability Act
what is the purpose of HIPAA?
- enacted to protect worker’s ability to obtain health insurance when changing jobs, being laid off, or retiring
- allows for individuals to obtain coverage without restrictions on preexisting conditions if switching from one group plan to another group plan
what does COBRA stand for?
Consolidated Omnibus Budget Reconciliation Act
what is COBRA?
an extension of group health insurance with the same coverage
what is the max total expense to the employee of COBRA?
102% of actual insurance cost
an employer may charge 2% for administrative expenses
what makes an individual eligible for COBRA?
coverage is terminated because:
- covered employee dies
- employee is voluntarily or involuntarily terminated
- hours are reduced from full to part-time
- covered employee separate from spouse
- employee becomes eligible for Medicare
- dependent child is no longer eligible for coverage (due to age, marital status, or leaving school)
what employers does COBRA apply to?
only applies to employers who offer a group health plan and have at least 20 employees
how long may an eligible person receive benefits under COBRA?
18 months for reduction in hours or normal termination (36 months for death, divorce, Medicare eligibility, or loss of child’s dependency status)
how long does an employee have to make a COBRA election?
60 days
Medicaid
- available to the nation’s poor
- benefits paid by the government at either state or federal level or combo of both
- eligibility is determined by a person’s assets
- benefits available to those eligible for Social Security
- benefits are extremely restrictive
what is the look-back period for gifts for Medicaid?
5 years (60 months) prior to entering a nursing home
what is a Continuing Care Retirement Community (CCRC)?
a retirement community that offers several levels of health care on site (independent living, assisted living, memory care, skilled nursing and rehab)
what is a Private Long-Term Care Policy?
provides coverage for nursing home stays and other types of care not covered by health insurance
what are the 7 types of coverage under a Private Long-Term Care Policy?
- skilled nursing
- intermediate nursing
- custodial care
- home health care
- assisted living
- adult day care
- hospice care
what are the Activities of Daily Living (ADLs)?
- eating
- bathing
- dressing
- transferring from bed to chair
- using the toilet
- continence
what qualifies someone to be chronically ill?
unable to perform 2 of the 6 ADLs for at least 90 days
what are the LTC tax benefits?
- premiums are deductible and limited based on age of the insured
- benefits are tax free as long as the policy is qualified
