Insurance Chapter 4

Question 1

Stop Loss Limit

Answer 1

aka the breakpoint
when it is reached, insurance comapny pays for 100% of expenses

Question 2

coinsurance

Answer 2

% that insurance pays (i.e. coninsurance of 80% means insurance company pays 80% and client pays 20% up to stop loss limit

Question 3

Affordable Care Act

Answer 3

cover regardless of claims as long as insured pays premium

Question 4

Medicare Part A

Answer 4

anyone over 65 entitled to medicare
disability: 2 years of benefits - eigible (any age)
disabled workers, disabled widows and widowers 50+, beneficiaries 18+ receive benefits because of disability before age 22

hospital - 3 deductibles: 60days/30/60, total of 150 days for one stay
post hospital extended care in skilled nursing 100 days
unlimited home health service post hospital
hospice for terminally ill
patient pays for 3 pints of blood, medicare covers addtl blood

Question 5

Medicare Part B

Answer 5

voluntary. monthly premiums, patient pays deductible. medicare coinsurance 80% on approved charges./ no stop loss.

IRMAA - income related monthly adjusted amount (surchange based on taxpayer income for 2 years prior) may apply to medicare b and d

doctors
diagnostic tests
radiology
therapy
outpatient services
home health
preventive care
other person administered drugs

NOT INCLUDED
-eyes, dental, drugs, most shots

Question 6

Medicare Part D

Answer 6

d=drugs, must have part a&b to get part d.

Question 7

Medigap

Answer 7

medicare supplemental
benefits to pay deductibles and coinsurance, as well as addtl benefits
only 1 medigap policy at a time
available if you are enrolled in a&b
purchase in 6 month periokd after initial enrollment

Question 8

HMO

Answer 8

health services for group of subscribers
capitation: fixed monthly fee to provider
gatekeeper: care managed by PCP and refers out to specialists (disadvantage)
cost containment
children on until 26

Question 9

PPO

Answer 9

fee for service basis as needed (NOT prepaid)
can go in and out of network

Question 10

Income Tax Implications

Answer 10

employer paid premiums are deductible by employer
benefits are taxable if exceeding medical expense incurred
self employed, 2%+ shareholders & partners can do an above the line deduction

Question 11

COBRA

Answer 11

20 employees or less exempt
18 months: termination (employees & dependents)
36 months: death, divorce, legal sep/eligiblity (spouse + dependents), loss of dependent status (dependents whose status changed)
disability qualifying: 29 months

Question 12

Period Extension

Answer 12

intial 18 month period extended for total of 36 months
death of covered employee, divorce of coverd employee, loss of dependent child status, covered employee becomes eligible for medicare.

not automatic, must be elected within 60 days of qualifying event occuring

Question 13

Medicare B - Still Working

Answer 13

can delay part b if still working. when employment ends, 3 options

cobra
sign up for part b within 9 months, no penalty
when you sign up for b, medigap enrollment period begins

Question 14

HSA

Answer 14

contributions are deductible even if no itemizing
adjustment to income aka above the line deduction
deductible amount:4150 and 8300 for a family

employer contributions are deductible by employer

contributes between employee and employer are combined

can pay for premiums TAX FREE - cobra, long term care (NOT MEDIGAp)

can use hsa to funds to pay for hsa deductible

Question 15

IRA to HSA Rollover

Answer 15

once in a lifetime rollover - access ira funds for medical purposes

Question 16

HRA

Answer 16

employer funded
reimburses employees for medical expenses
no cash out option
employer retains $$ unused