Health Insurance Flashcards
Premium Mode - Grace Periods
Paid Weekly: 7 days Paid Monthly: 10 Days Paid Quarterly/ SemiAnnually/ Annually: 31 Days
Health Insurance Reinstatement
Insurance company has 45 days to decide then it AUTOMATICALLY reinstates if not decided by then.
Misstatement of Age or Gender
Company will adjust the premium - Gender at Birth -
Premium Refunds - (Insured)Customer vs (Insurer) Company
Insurer - Pro-Rata
Customer - Keep some money - Short Rate Refund.
Tax Deductible or Not… Medical Expenses (HMO, PPO, Cancer, Hospital Indemnity)
Premium is always tax deductible - Benefits is tax free.
Employers and self employed -100% Tax deductible
Employers can only deduct amount of premiums plus out of pocket expenses that exceed 10% of Annual Gross Income. Only the amount that exceeds the 10%
Seniors (65+) AGI 7.5%
Tax Deductible or Not…. Disability Income
Tax deductible if the payer and receiver are different. Employer - 100% — Benefits are taxable to the receiver.
IF the Payer and the Receiver are same- no tax deduction for anyone. - Tax free benefits.
assignment of benefits
“reimburse” to doctor instead of insured.
Health insurance replacement
must not be detrimental to the customer - preexisting conditions covered may not be covered under new contract - new medical conditions have acquired are now a preexisting condition
Preexisting condition is…
any conditions a person has seen, should have seen, or was recommend to see and get treatment or get treatment from a medical practitioner.
Look back periods
Individuals - 2 years
Group - 1 year
Senior (medicare supplement/ long term care) - 6 months
IF preexisting condition found- what does ins company do?
Deny coverage, issue as applied, or issue policy with temporary exclusion (temp exclusion based on look back periods- ind - 2 years group - 1 yr senior - 6 months. ) or issue with permanent exclusion (AKA impermanent rider)
Impairment Rider
Permanent Exclusion on Health Insurance policy
Types of Health Insurance -Traditional- Basic (3 Types), Major Medical, Comprehensive Major medical
Basic - Have low limits of coverage - Hospital, Surgical, Medical —- No deductible, No CoPay, No Co-Insurance, First Dollar Coverage
Deductible
An amount that must be paid by the insured before the insurance company pays - higher the deductible the lower the premium
Co-Insurance
Share in part of the bill
Co-Payment
Money- “your admission” - every time you are seen
Stop Loss
dollar amount in the policy when the bill reaches the stop loss amount the insurance company pays 100% of bill
Major Medical Policy - Identified as
Having high limits, - Hospital, surgical, medical all in one contract.
Deductible, Co-Insurance, Co-Payment applies
Which medical plan has a corridor deductible?
Supplemental Major Medical is the only policy with a corridor deductible. -
Comprehensive Major Medical means….
“Supplemental Major Medical”— Comprehensive major medical is not at policy. - you have basic and major medical coverage in one - major medical supplements the basic
HMO’s - Stand for and do what?
Health Maintenance Organization- Focus on preventative care, operate in specific geographic service area, Insureds are no longer insureds… they are subscribers to a “pre-paid health plan” - Must stay in network unless its an emergency
Pay premium and receive care from the HMO
NO additional cost for preventitive care / Capivation fee paid
IPA -
Independent Practice Association - HMO contracts with Independent Physicians in area- Member chooses PCP (Primary Care Physician) - PCP recipes “capivation” fee, acts as a gatekeeper for referrals
IPA - Closed and Open Panels
HMO -
Open - sees other patients, other than in “network”
Closed- only sees patients from HMO company - no outsiders ,
PPO
Preferred Provider Organizations -
Physician is not paid capitation fee- physician is paid when you show up. - Paid on fee for service - member has more choices, - Can go out of network and pay more -
PPO - Fee for service -
“The Blues” - who and what?
Blue Cross and Blue Shields- Prepaid plans, service areas apply, community ratings, experience rating
Blue Cross- Pays Hospital
Blue Shield- Pays Doctor
Experience rating
Applies to group insurance - based on claims experience, annual review of each contract, each contract subject to rate increases
Community rating
applies to individual -cannot review on annual basis, can only increase by class
Classifications “class”
age bracket, sex, occupation,
POS
Point of Service plan- combo HMO/ PPO -
member can chose the plan that best suits them
MSA
Member Service Account - established by employers - employer funded , 50 or fewer employees (small employers) , employee uses expenses not covered in policy, year end balance rolls over
Small employer
2-50 employees
Flexible Spending Account
emplyee elects to reduce sallary and have moneys deposited into a FSA, deposits are exempt from income/ FICA/ and state income tax (tax break), Use it or lose it, no change until anniversary or open enrollment, or in a life changing event - marriage, child,
Health Reimbursment Acct
Not Insurance policy- - employer funded account to reimburse employees for qualified expenses. , EmployER can deduct the cost of funds placed in HRA, NO tax consequence for employee, balances roll over each year, ANY size employer,
HRA vs MSA
HRA - any employer
MSA- Medical - mini - small employer
Health Savings Accounts
HSA - anyone can have an HSA, linked to a high deductible health plan (HDHP) , premiums tax deductible, contributions are tax deductible, interest earned are tax free, no tax or penalties when used for qualified medical expenses.
Purpose of Disability Income Insurance
Replace earned income - income from a job -
Benefit amount - How much - Individual cannot excceed 60-70% earned income
Benefit Period - How long -Individual Longer = higher premium, paid after elimination Period -
Elimination Period - “Deductible” - Individual no beneifits paid until satisfied, time deductible,
Group and Individual Policies-
Benefit Period Long VS Short
1 year or less short, 2 years or longer is long term
Injury Definition (2)
Accidental Bodily Injury -
Accidental bodily injury by accidental means - Means or cause of the accident. - more restrictive Means= meaner
Presumptive Disablility
company will waive right to the checkup
Defined- total and irrecoverable loss of sight, hearing, speak, or loss or loss of two limbs .
Presumptive disability - full benefit paid
Recurrent Disablility
“Relapse” - continuation or related event from prior disability claim paid -WITHIN 6 months - No elimination periord- EP was already done.
6 MONTHS OR MORE - rest
Probationary Period - define
Probationary Period vs Elimination Period
imposed by insurance company for disabilities caused by illness. - 30 days - probation period only applies once at beginning of policy. EP applies everytime there is a new diability.
“In addition to EP”
Applies to Sickness
30 Days
Helps reduce adverse selection
Business Uses for Disiablity Insurnace
- Business overhead expense insurance
- premium is tax deductible
- benefit is taxable as income to the business - ## Diability Buy/ Sell
Business Overhead Expense Insurance
- Premium is tax deductible
- benefit is taxable as income to the business.
- Small Business - relies on business owner to help fund company
- IF owner becomes disables policy pays for: rent, phones, utilities, employee salaries, etc. DOES NOT PAY EMPLOYERS Salary
Ex: Business owner pays premium and if gets disabled the company gets the money.
Disability Buy/ Sell
- premium is NOT tax deductible
- benefit is tax free
- Entity could Purchase policy on each partner
- partnership pays premium (not tax deductible)
- benefit buys out disabled partner (tax free)
- 1-2 year elimination periods
- Lump sum payout - Cross Purchase - each partner buys policy on other (NOT tax deductible)
- Benefits buy out disabled partner (tax free)
- 1-2 Elimination periods
- Lump sum payout
Key Person Disability Insurance
Company pays, owns, and gets benefit if key person becomes disabled. - NEEDS KEY PERSON SIGNATURE
- Premium is NOT tax deductible
- benefit is tax free
AD&D
Accidental Death and Dismemberment
Pays if persona accidentally dies or loses a limb.
- Stand alone policy or a rider
- Full amount = Principal Sum
- Partial amount =Capital sum
Long Term Care Insurance
NO benefits for acute care- provides benefits for one who needs custodial care
- Group, Individual, riders to life insurance policies,
- Benefits must provide for at least 12 months of acute care in setting other than hospital acute care
- Inability to live independantly
- Triggered event is the NEED for “custodial care”
- Covers skilled, intermediate, and custodial care
- Cue-
Acute care
daily, skilled, orders, of doctor
Custodial Care is….
someone can no longer care for self and has lost at least 2 or more acts of daily living. - anyone can provide this care-
EX: Parents to provide to infants
Skilled Care is…
care the is provided daily, needing medical professionals, under orders of physicials .
Intermediate Care is….
same as skilled except “other than daily”
What are the acts of daily living? (6)
-Eating - Bathing -Dressing - Transfering - Continence - Toileting
“custodial care”
Home Health Care
- Care provided in ones own home
- occasional visits
- medically necessary
- Licensed professional
“intermeidate care”
Home Convalescent Care
- care in ones own home
- planned program of recovery established by attending physician
Provided by - long term care faciliy - home health care agency - hospital
Residential Care
No longer at home - in retirement community
Same as home but access to full time care if needed
Adult Day Care
- AKA Community based care
- Respite care re: beneficent for caregiver
Strurucure of Long Term Care Policy -
Similar to disability -
- Benefit Amount - daily or monthly - selected by customer in permitted cases
- Elimination Periods apply - service days (days for care needed) vs calendar days (1 day = 1 week of EP)
Group policy for health employee/ employer
- minimum of 2 employees
- Sponsored by employer - maser contract
employees get certificates of insurance stating a part of master contract
31 day enrollment period - no evidence of insurnabilty
Contributory - 75% participation
Contributory vs Non-Contributory plans
Contributory plans require at least 75% participation and employee paying some of premium
Non-Contributry-EmployER Covers 100% of ELIGIBLE employees
Health Ins Discrimination
can only discriminate based on class, lengthen of service,
cannot exclude age, sex, race, etc
Association Group of Health Insurnace
minimum of 100 members, be established for 5 years, must have bylaws, annual meetings, constitution,
Individual vs Group - Health Insurance
Individual
- Fairly restrictive
- applicants and dependents must qualify
- guarantee renewable
- rates increace by class
- UW- age, gender, health (past and current) , occupation, morral risk, finacial, family history
Group
- less restrictive
- dependants not always covered
- general condition of group
- automatic coverage while enrolled and eligbile
Group Conversion
- 31 days convertion time from group to individual
- no eviedicne of insurabilty
- covered during conversion period any premium paid but gives coverage after conversion period ended
- based on attained age
- Individual rates
COBRA
Consolidated Omnibus Budget Reconciliation Act
- Federal law- not insurance
- 20 or more employees and families are required to extend benefits for 18 months
- IF death or divorced of “ex” employee family receives benefits for additional 18 months= 36 max
- 60 days to decide
- Premium does not increase BUT you end up paying both shares, employer and employee portion
- 2% admin fees
HIPPA
Health Insurance Portability and Affordability Act
- Portability - Group to Group, Group to Individual , Individual to Individual
- Gives you credit for prior coverage to get you through eligibility period Ex: 5 years of coverage = 48 months of creditable coverage and probationary period is waved.
- Preexisting conditions time period is waived bc of creditable coverage
Group - limits exclusions for pre-existing, no health discrimination, special enrollment periods
HIPPA - no waiting periods for..
new borns and adoptions
Renewability
- can be non-reneable or canceled due to non pay
- fraud (first 2 years)
- violation of participation % or contribution rules
- or can discontinue plan by isurnace company
Cancer/ Dread Disease
- Limited risk policies
- Schedule of benefits**
Critical Illness
-Lump sump pay out upon diagnosis**
Cancer vs Critical Illness
schedule benefits for cancer
critical illness gets lump sum
workers comp- 4 benefits
-only paid when “arise out of or in the course of employment”
-worker cannot sue to get benefits
-availiabel by statues
-without regaurd to fault or neglegence
4 benefits
-medical w/o limit -
-income
-death benefit
-rehab (not 100%)
Subrogation
cannot collect 2 times
insurnace company seeks $ paid to insured
Uniform accident and sickness policy provisons law
“model law” - developed by NAIC
legislature of state -enacts or passes model law
-defines the rights and duties of ins co and insured
-may be reworded but not less favorable
13 manditory and 10 optional provisions
Entire Contract Provision
Everything in writting - policy, application and endormsent and riders
no changes without written consent of both compay and policy owner - executive officer can only make change
application - applicant signs
policy - executive signs
Grace Period Provision
Determined by mode of premium 7, 10, or 31 days
Reinstatement
make application and prove insurable - company has 45 days to dertermine or coverage is automatically reinstated -
WHEN REINSTATED - Accidents - covered immidiatl
Sickness - 10 days “probationary period”
Change of Beneficiary
Revocable (any time) or irrevocable (with written permission of beneficiary)
Notice of Claim Hint: 20/20
Notify company in writing within 20 days!
Claim Form
From company sent in 15 days
Proof of loss Hint: 90 proof
Submitted within 90 days
Time of Payment of Claims
Must pay imminently upon receiving proof of loss.
Disability benefits must be paid at least monthly -no less frequently than monthly - AKA at most monthly!!
Payment of Claims
to insured if alive - to beneficiary if deceased— no beneficiary must go to estate of insured
estate is everything you own minus what you owe.
Physical Exam and autopsy
InsurER has right to physical exam or autopsy - company has tot pay for it
unless local or religious law forbids it
Time Limit on Certain Defenses (Incontestable)
incontestability clause - 2 years if policy is guarantee renewable also pre-existing is included.
Legal Actions
-No sooner than 60 days to sue for payment
Cancellation by insurer
Pro-rata refund
cancellation by insured
short rate refund
Change of Occupation
less to more hazardous - adjust the benefit
more to less hazardous - pro-rata refund of unearned premium
Illegal Occupation
Injury or Illness must be the result of an illegal occupation - company does not have to pay claim
Insuring Clause - what at where?
located on the first page - spells out whos insured, name of company and whats covered
Free Look
Begins from date of deliver - 10 days?
30 days for LTC and medicare supplements
Coverage is in force during time and is NOT free insurance
Consideration Clause
on first page normally with insuring clause -
more details regarding customers application and premiums to be paid, company’s promise to pay
Waiver of Premium
Premium does not have to be paid
- Insured TOTALLY Disabled
- Need to make payments for 3 months
- After 3 months we refund you!
- AND waive all future premium as long as you are disabled prior to age 65
Disability must occur before age 65
NO COVERAGE IF DISABLED AT 65 OR OLDER
Recurrent vs Residual
Recurrent - “Relapse” within 6 months - continuation of original disability after 6 months= new disability
Residual - way benefits are paid - benefits paid based on the % of pre-disability income lost
Out of Pocket Maximum
Maximum amount of exposure for the insured.
Deductibles (5)
Annual - Per Occurance - Family - Corridor - Common Accident -
Annual Deductible
- Carry over provision - Any money spend towards deductible in the last calendar 1/4 carries over into new year.
Per Occurance Deductible
Simmilar to car insurance
Family Deductible
Caps out after 2 or 3 memebrs meet the deductible
Corridor Deductible
for Supplemental Major Medical -
Common Accident Deductible
one per accident
Co-Payment
-set dollar amounts per medical service or visit
Exclusions for Health Insurance
Maternity - optional for individual, mandatory for group, Mental and Emotional- Limited Substance Abuse - Limited War and Military Duty Self Inflicted Injuries Other - Dental Cosmetic Refractions (eye surgery) *exception comes because of traumatic event -Care in government facilities
URC or UCR
Usual, Reasonable, Customary
How much health ins company will pay.
- Payment is based on the average charge in given georgraphic area
- Most other policies have a “schedule of benefits payment”
Impairment Rider
Permanent exclusion.
Guaranteed Insurability Rider (Future Increase Option)
-Disability Income - Every 2 to 5 years without proving insurability and proving increase in income
Multiple Indemnity Rider
Double or triple the benefit if by accident
Rights of Renew-ability Are..
- Cancellation - any time for any reason, 5 day notice
- Optionally Renewable - only at premium due or renewal date, for any reason
- Conditionally Renewable - only at premium due ore renewal date, for any reason
- Guarantee Renewable - Can increase premiums
- Non-Cancellable/ Guaranteed Renewable - can never increase premiums
- Period of time - term insurance - cannot be renewal
Rights of Renewability - NonCancelable AKA Noncancelable and Guaranteed Renewable
Noncancelable policy - Insurer can NEVER increase premiums
Rights of Renewability - Cancelable
insuER may cancel coverage at any time, provided it returns any unearned premiums to the insured.
Rights of Renewabality - Guaranteed Renewable
InsurER can only increase premium based on class
Short Term Disability
Most group short term policies provide short elimination periods - usually 30 days or less - and short benefits periods. The benefit amount is limited to a percentage of compensation such as 60-70%, - short term disability worker is presumably eligible for social security disability benefits after the 5 month ss waiting period
Accident Only Insurance
provides coverage for injury from accident and excludes sickness- benefits may be paid for all or any: death, disability, dismemberment or hospital and medical
Hospital income insurance/ Hospital Indemnity
pays specific sum on a daily, weekly, or monthly basis while the insured is confined to the hospital - not related to expenses incurred or to lost wages while insured is in the hospital
benefit periods usually 1-2 years.
Maximum Benefit limit
maximum the insurER will pay
Vision Care
includes eye examinations/ refractions and eye glasses. though not a common benefit. occationally offered as optional benefit under health insurance.
will pay a specific amount or the entire cost of a annual eye examinations. also normally covers glasses one time in a 2 year period
Dental Coverage
scheduled - benefits are limited to specified maximums per procedure with first dollar coverage.
comprehensive - work same as comprehensive medical expense coverage. In addition to deductibles, coinsurance and maximums may also affect level of benefits payable. Comp dental plans usually provide routine dental care services without deductibles or coinsurance to encourage preventative care. - may also be a lifetime maximum per individual.
Lifetime Benefits
extends benefit period from 65 to lifetime. may apply to accident only benefits or to accident and sickness benefits. - normally total disability before 65 due to accident benefits will be paid for the lifetime of the insured provided her or she remains totally disabled.
Occupational vs Non-occupation
short term policies often cover only nonoccupational disability, most long term plans cover both occupational and nonoccupational sickness and accidents. -
when occupational benefits are provided they are often reduced by benefits received from workers comp and ss
Benefit periods for disability policy are…
are often 1 yr, 2 yr, 5 yrs and to age 65
Pre-authorizations and prop approval requirements
pre-authorization the physician can submit a claim in formation prior to providing treatment to know in advance whether the procedure is covered under the insureds pan and at what rate it will be paid
utilization review consist of an evaluation of the appropriateness, necessity, and quality of health care and may include preadmission certification. - provision allows insurance company to evaluate procedure and length of hospital stay.
