Learning Objective 1 Flashcards
Typical basic group term life plan designs [Card 2]
Acronym - FSMP “Fat Stacks Mean Paydays”
Flat dollar plans (same for all employees) Salary bracket plans (based on salary ranges) Multiple of earnings plans (most common) Position plans (benefits vary based on position)
Types of group life insurance benefits [Cards 1a and 1b]
Acronym - SAD CUPS on TV Basic group term life Group supplemental Group AD&D Dependent group life Survivor income benefits Group permanent life Group universal life Group variable universal life Group credit life insurance Living benefits
Group term life disability provisions [Card 3]
Acronym - PEW (get shot and your life could be over or you’re disabled)
Total and permanent disability - monthly benefit is paid when an insured is disabled. On death, original benefit is reduced by disability payments
Extended death benefit - pays the death benefit if the insured’s coverage terminates upon total disability at age 60 and the insured stays disabled and dies within 1 year
Waiver of premium - coverage continues but you don’t have to pay premiums if disabled
Formula for the group term life imputed income [Card 4]
Employees are taxed based on the value of benefits over $50k
= [Table 1 rate * (coverage amount - 50,000)/1000] - employee contributions
Coverage per 1000 above 50,000
Benefit provisions for group disability income [Card 5]
Acronym - DEB the BLOB
Definition of disability
Elimination period - 3 to 6 months for LTD or 8 days for STD
Benefit period - 2 yrs or 65 for LTD and 13 to 26 weeks for STD
Benefit amounts - monthly for LTD and weekly for STD
Limitations and exclusions
Optional benefits
Benefit offsets - benefits are reduced by income from other sources like Soc Security, workers comp etc
Typical definitions of disability for group disability income [Card 6]
Acronym - Show me dem TDs
LTD - first 2 years after elimination period, cannot perform YOUR occupation. After 2 years, cannot perform any occupation that you’re suited for and loss of income % is 40%
STD - cannot perform duties of your occupation. Coverage is for accidents outside of the workplace so there isn’t overlap w workers comp
Methods for reducing benefits for income earned during a disability [Card 7]
Acronym - 50 WIPS
50% offset - reduce benefit by $1 for every $2 of work earnings
Proportionate loss - percentage of lost earnings due to disability and applies it to the benefit amount
Work incentive benefit - in initial period, benefits are capped so they aren’t more than what you earned before. After initial period, it’s one of the other two methods
Optional benefits that may be added to group disability contracts [Card 8]
Acronyms - STD = 24 has 1 survivor (Jack Bauer), LTD = Chris Paul (3CP), Deion Sanders (D2S)
STD:
24 hour coverage
1st day hospital coverage
Survivor benefits (same as LTD)
LTD: Cost of living adjustment Conversion option Catastrophic benefits Pension benefit - additional benefit to replace lost contributions to retirement
Day care expenses are reimbursed
Spousal benefits
Survivor benefits
Key dimensions of medical benefit plans [Card 9]
Acronym - CM Punk
What services are COVERED?
How much does the MEMBER contribute?
How much risk is there for the PROVIDER?
Services covered by medical policies [Card 10]
Acronym - 2Ps are WHAXD and DDF
Professional Facility Private nursing Wellness benefits Helplines Ambulance X-rays and lab services Diagnostic services Durable medical equipment Disease management
Purposes for having the insured share in the cost of the medical plan [Card 11]
Acronym - CONTROL
To control risk, unit cost and utilization
Utilization is lower when a plan includes deductibles, copays etc
Requiring cost sharing lowers premiums and can lead to more affordable coverage
Requiring cost sharing results in a benefit program that more truly represents an insurance risk
Types of provider reimbursement [Card 12]
Acronym - BIG DAD PCF
Bonus pools
Integrated delivery systems - insurer employs the providers of care (staff model HMO)
Global payments - single reimbursement to cover all services associated with a given condition
Discounts from billed charges
Ambulatory payment classifications
DRGs - hospital diagnosis related groups, set payment based on diagnosis
Per diem reimbursements - negotiated amount per day of hospital stay
Capitation
Fee schedules
Provisions included in medical plans [Card 13]
Acronym - Russian Mess (CCCP MES)
Coordination of Benefits (COB)
COBRA continuation - 18 to 36 months
Conversions
Preexisting conditions exclusion - limits coverage for preexisting conditions
Mandate benefits due to regulations
Overall Exclusions
Subrogation - gives carrier the right to recovery from any injuring party (commonly used for workers comp)
Common exclusions for medical plans [Card 14]
Acronym - PWN C WROTE
Services:
Where payment is not otherwise required
Provided due to a work related injury
Deemed not medically necessary
Related to cosmetic surgery
Required due to an act of war
Provided by a provider related to the patient
Other specified services like mental, hearing, vision
Transplants
Deemed to be experimental
Criteria for provincial Medicare plans to qualify for federal contributions [Card 15]
Acronym - A P CUP
Accessibility - to hospital and physician services
Portability - must get new coverage in 3 months or be covered if you move or leave the country
Comprehensiveness - all medically necessary services must be covered
Universality - all must be entitled to the plans services
Public administration - plan must be administered on a non profit basis by a public authority
Benefits covered by most Canadian provincial Medicare plans [Card 16]
Acronym - HOP X DROP
Hospital services
Other professionals such as optometrists, chiropractors, podiatrists
Physician services - PCP, specialists
X-ray and laboratory services
Dental care - medically necessary oral and dental surgery
Rx for seniors and poor people
Out of province coverage
Prostheses and therapeutic equipment
Concerns about the Canadian Medicare system, from recent reports [Cards 17]
Acronym - Waiting
To see a specialist
For elective surgery due to shortage of hospital beds
At the ER bc they are overcrowded
For diagnostic procedures due to shortages of equip and tech
For LTC facilities to have open beds
For tech intensive services to be offered everywhere
For supply and demand to be closer
For essential services to be covered (drugs for CI)
Categories of expenses commonly covered by private (supplemental) medical plans in Canada [Card 18]
Acronym - PHORM
Health practitioners - subject to daily and annual visit limits
Hospital charges - plan pays for room and upgrade to semi private room
Out if Canada coverage
Rx - 2/3 of the cost of private medical plans
Misc expenses
Group dental insurance is provided through: [Card 19]
Acronym - TUMAC Shakur (Tooth Mac)
Traditional employers Unions Multiple employer trusts Associations Chambers of commerce
Organizations that sell dental insurance [Card 20]
Acronym - 3rd BIRD HMO
3rd party administrators
BCBS plans
Insurance companies
Referral plans (discount cards)
Dental service corporations (Delta)
Dental HMOs
Basic components of dental plan designs [Card 21]
Acronym - TROPIC
Tiering by type - vary reimbursements
Reimburse for the lowest cost of treatment
OOP maxes are high to prevent over use
Preventive care is strongly emphasized
Cost containment provisions limit anti selection
