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