Health Insurance

Question 1

4 major classes of how medical expense insurance is divided

Answer 1

1. hospital expense
2. surgical expense
3. physician’s expense
4. major medical

Question 2

stop loss

Answer 2

the maximum amount that the insured must pay in coinsurance payments

Question 3

out-of-pocket

Answer 3

insured only pays the out-of-pocket amount as the max for group hospitalization and major medical

Question 4

what does PPACA stand for?

Answer 4

Patient Protection and Affordable Care Act

Question 5

what are the 4 benefit categories of PPACA?

Answer 5

1. bronze plan
2. silver plan
3. gold plan
4. platinum plan

Question 6

bronze plan

Answer 6

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

Question 7

silver plan

Answer 7

covers 70% of the benefit costs of the plan, with the HSA out-of-pocket limit

Question 8

gold plan

Answer 8

covers 80% of the benefit costs of the plan, with the HSA out-of-pocket limit

Question 9

platinum plan

Answer 9

covers 90% of the benefit costs of the plan, with the HSA out-of-pocket limit

Question 10

what does HMO stand for?

Answer 10

Health Maintenance Organization

Question 11

what is an HMO?

Answer 11

• 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

Question 12

what is the primary disadvantage of an HMO?

Answer 12

there is no coverage outside of the HMO

Question 13

what does PPO stand for?

Answer 13

Preferred Provider Organization

Question 14

what is a PPO?

Answer 14

• 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

Question 15

what does PCP stand for?

Answer 15

Primary Care Physician

Question 16

what does HSA stand for?

Answer 16

Health Savings Account

Question 17

what is an HSA?

Answer 17

-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

Question 18

what is the requirement to be eligible for an HSA?

Answer 18

the individual must have medical insurance under a high deductible health plan (HDHP)

Question 19

what does HDHP stand for?

Answer 19

High Deductible Health Plan

Question 20

for whom are HSA contributions deductible?

Answer 20

• for the employee who contributes
• for the employer who contributes
• for any eligible family members who receive contributions on their behalf

Question 21

when are distributions from an HSA tax-free?

Answer 21

when used for qualified medical expenses

Question 22

what medical expenses are not considered qualified for an HSA distribution?

Answer 22

• over-the-counter drugs (unless taxpayer has a prescription)
• cosmetic surgery costs

Question 23

what happens when an individual takes a distribution from an HSA for a non-qualified medical expense?

Answer 23

distributions are subject to income tax and a 20% penalty (if taken before age 65)

Question 24

what does it mean if a health insurance policy is noncancellable?

Answer 24

• 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

Question 25

what does it mean if a health insurance policy is guaranteed renewable?

Answer 25

• 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

Question 26

group health insurance

Answer 26

• employer-provided health insurance

- not taxable to the employee

Question 27

what does HIPAA stand for?

Answer 27

Health Insurance Portability and Accountability Act

Question 28

what is the purpose of HIPAA?

Answer 28

• 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

Question 29

what does COBRA stand for?

Answer 29

Consolidated Omnibus Budget Reconciliation Act

Question 30

what is COBRA?

Answer 30

an extension of group health insurance with the same coverage

Question 31

what is the max total expense to the employee of COBRA?

Answer 31

102% of actual insurance cost

an employer may charge 2% for administrative expenses

Question 32

what makes an individual eligible for COBRA?

Answer 32

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)

Question 33

what employers does COBRA apply to?

Answer 33

only applies to employers who offer a group health plan and have at least 20 employees

Question 34

how long may an eligible person receive benefits under COBRA?

Answer 34

18 months for reduction in hours or normal termination (36 months for death, divorce, Medicare eligibility, or loss of child’s dependency status)

Question 35

how long does an employee have to make a COBRA election?

Answer 35

60 days

Question 36

Medicaid

Answer 36

• 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

Question 37

what is the look-back period for gifts for Medicaid?

Answer 37

5 years (60 months) prior to entering a nursing home

Question 38

what is a Continuing Care Retirement Community (CCRC)?

Answer 38

a retirement community that offers several levels of health care on site (independent living, assisted living, memory care, skilled nursing and rehab)

Question 39

what is a Private Long-Term Care Policy?

Answer 39

provides coverage for nursing home stays and other types of care not covered by health insurance

Question 40

what are the 7 types of coverage under a Private Long-Term Care Policy?

Answer 40

1. skilled nursing
2. intermediate nursing
3. custodial care
4. home health care
5. assisted living
6. adult day care
7. hospice care

Question 41

what are the Activities of Daily Living (ADLs)?

Answer 41

1. eating
2. bathing
3. dressing
4. transferring from bed to chair
5. using the toilet
6. continence

Question 42

what qualifies someone to be chronically ill?

Answer 42

unable to perform 2 of the 6 ADLs for at least 90 days

Question 43

what are the LTC tax benefits?

Answer 43

• premiums are deductible and limited based on age of the insured
• benefits are tax free as long as the policy is qualified