Insurance Flashcards
What is medicare coverage for nursing home skilled care?
Days 1-20: $0
Days 21-100: patient pays $204 (2024 coinsurance per day
Days 101 and beyond: patient pays all costs
What are the benefit triggers for qualified long-term care insurance?
-Unable to perform 2 out of the following 6:
Bathing
Eating
Dressing
Continence
On off toilet
Transferring
OR
Substantial cognitive impairment
(Dr. certification of conditions is required for both that the condition will continue to last for at least 90 days)
What does the “pool of money” structure mean in regards to the benefit period of a qualified long-term care insurance policy?
It means that if the cost of care is less than the max daily benefit, the policy will last longer than the stated benefit period.
Name the 4 tax benefits of a qualified LTCi policy
- Benefits are received tax-free
- Premiums paid are a qualified medical expense for the itemized deduction for medical expenses
- Premiums can be paid from an HSA
- Premiums paid by employers are tax-free to employees and benefits remain tax free
Name 3 of the following required features for a qualified LTCi insurance policy
- Benefits payable only for qualified long-term care services
- Contract must be guaranteed renewable
- Contract does not pay or reimburse expenses reimbursable under Medicare
- Contract does not provide for a cash surrender value
- Policy dividends must be applied as a reduction in future premiums or increase future benefits
- Limitations and exclusions are prohibited (except pre-existing within 6 months of application)
- Contract cannot provide for skilled nursing care only or require prior hospitalization
- Contract must have 2-year incontestable clause for misrepresentation
What is partnership long-term care insurance?
It is a partnership between states and insurance companies for LTCi
-Provides additional asset protection if LCTi benefit is exhausted and insured files for Medicaid
-Total amount paid under LTCI is added to Medicaid spend-down limit and protected
Employer-paid premiums on disability income insurance are _ to the insured
taxable
Employee paid premiums on disability income insurance (if paid with after-tax dollars), benefits are _ to the insured
tax-free
If the employer pays the premiums but includes the premium amount as compensation to the employee on disability income insurance, the benefits are _
tax-free
If disability income insurance is paid with pre-tax dollars, benefits are _
taxable
Can an employer contribute to an HSA?
Yes, but generally it is primarily indivuduals
What is the last-month rule for HSAs?
If eligible under HDHP on the first day of the last month of the tax year, you may fund an HSA as if eligible for the entire year.
Withdrawals in an HSA prior to age 65 are subject to a _% penalty tax
20
Does a company with 15 full-time employees and 10 part-time employees meet the 20 person threshold?
yes
Is someone covered under COBRA if they are fired for gross misconduct?
no
WHAT DOES CRAPO stand for?
1) cash
2) reduce the premium paid
3) accumulate interest
4) paid-up additions
5) one-year-term
What kicks off the COBRA election period?
The date of notification NOT termination and lasts for 60 days.
How are living distributions taxed in a MEC?
LIFO based taxation applies only to the extent of gain in the contract. Taxed are ordinary income rates and there is a 10% penalty for loans and withdrawals.
Which law requires lenders to disclose the cost of consumer credit, applicable charges, terms and conditions?
Truth in Lending Act
How are viatical settlements taxed to the settlement company?
Amount received when the person dies, minus the basis. Basis is the cash settlement amount paid to the insured plus any subsequent premiums paid by the company.
How are viatical settlements taxed to the person who sells their contract?
If TERMINALLY ILL, then it is tax free. If CHRONICALLY ILL, only tax free to the to the textent that they are used for L/T care services.
Do beneficiaries of annuities receive a step up in basis?
NO - because they are IRD assets
In an annuity, if payments go beyond the taxable life expectancy, _income is taxable
ALL
Are non-qualified annuities purchased with before or after-tax dollars?
after-tax
