Insurance/Health Insurance Flashcards
What are the for major classes if traditional medical insurance?
Hospital
Surgical
Physicians
Major medical
What is covered under Hospital expense?
Room and board, does cover physician fees
What is covered under surgical expense?
Covers surgeon fees whether in our out of hospital
What is covered by physicians expenses?
All nonsurgical physician expenses
What is covered under major medical?
Hospitalization, physician and surgeon fees, physical therapy and prescription drugs
For health plans issued after September 2010, lifetime limits cap has been eliminated
Eye exams and dental are excluded
What is the typical coinsurance clause?
How are deductibles handled?
80/20
Insurer pays 80% of expenses above the deductible and insured pays 20%
Coinsurance applies to each member of family
Each family member must satisfy a deductible with typically a maximum of 3 deductibles per family (can vary)
What is a stop loss?
What are the steps?
The maximum amount the insured must pay in Coinsurance payments.
- Insured always pays deductible first
- Insured pays coinsurance percentage to stop loss amount
- After paying coinsurance percentage of the maximum stop loss amount, insurer pays 100%
Describe group hospitalization and major medical:
Insured only pays the out of pocket
All policies should now use out of pocket approach per the affordable Care act not the stop loss approach
Under the patient protection and affordable Care act (PPACA) who is required to have coverage?
Is there a penalty?
Must US citizens and legal residents required to have health coverage
The tax penalty for non compliance will be zero for months beginning after December 31, 2018
Penalty: those without coverage pay a tax penalty of $695 per year up to a maximum of there times that amount ($2085) per family OR 2.5% of household income above the filing threshold, whichever is greater
What are the employer requirements of the PPACA?
Assesses employers with 50 or more full time employees that do not offer coverage a fee of $2000 per full time employee, excluding the first 30 employees.
Requires employers with more than 200 employees to automatically enroll employees into health insurance plans offered by the employer. Employees may opt out of coverage.
Exempts employers with up to 50 full time employees from the above penalty.
What are the benefit categories of the PPACA?
Bronze: minimum allowable coverage, covers 60% of the benefits costs of the plan with the out of pocket limit equal to the HSA limit
Silver: 70%
Gold: 80%
Platinum: 90%
Catastrophic: available to those up to agree 30 or those exempt from the mandate to purchase coverage and provides catastrophic coverage only to the coverage level set at the HSA law levels except that prevention benefits and coverage for three primary care visits would be exempt from the deductible. This plan is only available on the individual market
What is an HMO?
Comprehensive health care in return for a periodic payment (premium)
Care managed by pcp or gatekeeper who determines what care is received
Disadvantage: no care outside the HMO
What are the structural models of HMOs?
Staff: HMO is a corporation, medical staff members are employees of HMO
Group: aka network model, HMO contracts with groups of medical providers
Individual practice association: physicians have own office locations, but contract out to HMO on a fee for service basis
What is a preferred provider organization?
Network of health insurance providers with whom an employer or insurance company contracts
Provider offers a discount on services
Insured receives a high rate of reimbursement when using providers within organization
A PPO preserves employees option to choose a provider outside of the network
What is managed care/primary care physician?
PCP provides services or refers to specialist
Physicians need approval to perform certain procedures and it may reduce a patient’s options for care if not approved
Consumer pays a small co-payment or other deductible
Health Care providers agree to accept compensation provided under the plan
Describe health savings accounts:
Provide employees and individuals a tax deduction for amounts contributed to their accounts as well as use money and earnings tax free for qualifying medical expenses
Who can contribute to an HSA?
Employer, employee or both
What determines eligibility for an HSA?
Individual must have insurance under a high deductible health plan (HDHP)
What are the rules that disqualify eligibility for an HSA?
Covered in any way by a non (HDHP)
General purpose HRAs and health FSA count as other health insurance coverage
Medicare participation
Individuals who MAY be claimed as a dependent on another’s return are also disqualified
What are the deductible and out of pocket limits for an HDHP?
Deductible at least: Single $1350, family $2700
Max out of pocket: single $6750, family $13,500
What are the contribution limits to an HSA?
Single $3500, family $7000
$1000 catch up for those 55 and older, note difference between IRA catch up of 50+
Who can deduct HSA contributions?
The employer who contributes
The employee who contributes
Any eligible family member who receives contributions in their behalf
What type of health insurance premiums are permitted as qualified expenses)
Long term care premiums
COBRA premiums
Health coverage while receiving unemployment
Medicare and other health Care coverage (not medigap policies) if you were 65 or older
Dental and vision
No on cosmetic surgery and OTC drugs have an RX and tax payer copays
How are distributions for non qualified medical expenses treated for tax purposes?
20% penalty and subject to income tax before 65
Income tax at 65 and older
What is a non cancelable health insurance policy?
Continuous and guarantee an insured the right to renew until a specific age or stated number of years
Insurer cannot raise premiums and cannot cancel the policy
What is a guaranteed renewable insurance policy?
Right to renew guaranteed until a specific age or stated number of years
Insurer cannot cancel the policy, but they can raise the premiums as long as they are raised for the entire group or class of policy holders
All policies must now be guaranteed renewable under provisions of the ppaca
What is HIPAA?
Note: the ppaca no longer allows the imposition of pre-existing condition clauses***
Health insurance portability and accountability act
enacted to protect workers ability to obtain health insurance when changing jobs, being laid off, or retiring.
Allows for individuals to obtain coverage without restrictions on pre-existing conditions if switching from one group plan to another group plan.
HIPAA does not apply if switching from a group plan to an individual plan or individual to individual plan
There is a 12-month exclusion window, 18 months for late enrollment, for new employees, which is reduced for each month of creditable coverage before enrolling. late enrollment is defined as any enrollment other than the first period in which the individual is eligible to enroll.
creditable coverage is any health coverage held immediately prior to applying in the new plan and after any significant breaks, 63 or more days, and coverage.
What is Cobra?
An extension of group health insurance with the same coverage.
How much can an employer charge 4 cobra?
An employer May charge 2% for administrative expenses. Total expense to the employees 102% of actual insurance cost
Who can apply for cobra?
Applies to loss of coverage for the covered employee, employee spouse and or dependent children
What is required to be eligible for cobra?
Group coverage must terminate because:
Covered employee dies
Employees voluntarily or involuntarily terminated
Hours are reduced from full-time to part-time
Covered employee separate from spouse
Employee becomes eligible for Medicare
Independent child has no longer eligible for coverage (age, married, left school)
What employers does Cobra apply to?
Only applies to employers who offer a group health plan and have at least 20 employees.
Note, both full-time and part-time employees count towards the 20, that part-time employees count as a fraction of employee based upon their hours worked.
Who is a qualified beneficiary for cobra?
Any individual covered by a group health plan on the day before a qualifying event who is either an employee, the employee’s spouse, or an employee’s dependent child
What are the specific time periods an employer must offer Cobra coverage?
18 months for reduction in hours or normal termination
36 months for death, divorce, Medicare eligibility, loss of dependency status by children of employee
up to 29 months if employee meets social security definition of disabled
Note: if cfp board tests any event other than a reduction in hours or normal termination, then it will be 36 months
Under what conditions can Cobra coverage be terminated before the designated term ends?
Employer terminates its health plan for all employees as a result of the company going out of business
The employee your beneficiary fails to make premium payments
the employee becomes covered under any other plan providing medical Care
