Individual vs. Group Insurance Flashcards
The Individual Market is for…
Individuals and families
Individual Market: Who is the policy holder?
Buyer and can choose the policy/plan features
Individual Market: Change in employment has…
No impact on coverage
Until ACA, shoppers in the individual market could be denied insurance or charged more due to…
Personal health status
Applying for individual health insurance traditionally involved…
Some level of medical underwriting
Medical Underwriting
Health history and health-related habits, MIB files, Physicals
Even if medical underwriting is limited by the ACA in traditional health insurance…
It might still be practiced in disability/LTC markets
Individual Underwriting: Community Rating
Price based on collective health/characteristics of the larger population, not the individual
Individual Underwriting: Modified Community Rating
Price based on health of community with limited consideration of the individual
ACA plans must use modified community rating that only considers…
Family size, tobacco use, age, geography
ACA plans cannot use…
Gender and individual health
Group Health Insurance covers…
Several people via a “master policy”
Group Health: Policyholder is typically…
Employer
Group Health: Employee receives…
Certificate of insurance
Group Health: Typically can insure…
Employees, spouses, and dependent children
Group Health: Employee coverage often paid for by…
Employer and employee
Group Health: Dependent coverage often paid for by…
Employee
HIPAA prohibits discrimination (price and availability) based on…
Health if joining during open enrollment
Open Enrollment
Eligible employees, spouses, and dependents can typically enroll at the start of employment or during one month annual period
Open Enrollment: Don’t need to wait for annual period if…
Employee, spouse, or dependent loses other coverage; birth or adoption; marriage
Open Enrollment: Traditionally, everyone is eligible regardless of health and often no waiting periods for pre-existing conditions if…
Had creditable coverage within 62 days of applying
Group Health Insurance Underwriting
Premiums won’t depend on characteristics of any individual
Group Underwriting: Experience-rated
Characteristics of the collective group will be a major impact on price (large group)
Group Underwriting: Community-rated
Characteristics of the broader population will be a major impact on price (small group)
Self-Insured Groups
Employer pays for employee care with its own funds
Self-insured groups are often exempt from…
State insurance laws but still regulated by federal government
Self insured groups admin duties are often handled by…
Third party administrator (TPA) or administrative services organization (ASO)
Stop-loss insurance might kick in if…
Claims are significantly higher than premiums
Coordination of Benefits
Addresses how claims will be paid when covered by multiple plans
Coordinating Policies
Take other insurance into account
Non-Coordinating Policies
Do not take other insurance into account
COB: Individual
Claims are split pro-rata liability
Pro-Rata Liability
Big plans pay more, small plans pay less
COB: Group
Employee’s plan is primary, spouse’s plan is secondary
COB, Group: Joint Custody
Parent with birthday earliest in the year is primary
COB, Group: Not Joint Custody
Custodial parent’s coverage is primary for child, unless divorce says otherwise
No Loss/No Gain
Applies if employers replace a health plan during the policy period
No Loss/No Gain Qualities
No new restrictions on a pre-existing conditions; deductibles paid in same year might need to carry over
Contributory Group
Each group member pays at least part of the premium; 75% minimum participation
Non-Contributory Group
Plan sponsor pays full premium; 100% participation
Contributory/non-contributory groups are done to prevent…
Adverse Selection
Blanket Policy
Insurance for non-employer groups that have frequent changes in membership
Blanket Policy: Insurer generally doesn’t receive…
List of group members
Blanket Policy: Group members don’t receive…
Certificate of Insurance
Blanket Policy: Typically only…
Accident insurance for medical care
Employer Taxes
Can typically deduct its own contributions to employee health insurance from its income taxes
Patient Taxes
Typically no taxes for benefits
Patient Taxes: Premium contributions for group insurance are usually…
Pre-tax, excluded from taxable income so no extra deduction allowed
Patient Taxes: Contributions of after-tax dollars for medical care/insurance might be taxable if…
Itemizing your taxes and spending more than 7.5% of income on heath care
