Lesson 6 Flashcards

1
Q

6.1.1 List three primary activities involves in administering group benefits

A

1) Determining the appropriate administrative approach
2) Performing admin activities
3) Evaluating the overall program and specific benefits

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2
Q

6.1.2 Describe the factors that influence which of the three main administration approaches will be available to a plan sponsor

A

3 main approaches

  • self-administration
  • insurer administration
  • TPA

Factors include:

  • in house capabilities
  • number of lives insured
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3
Q

6.1.3 Explain the responsibilities a plan sponsor has in the claims process under an insured plan that is self administered

A

The plan sponsor provides member eligibility data to the insurer or TPA so it can adjudicate claims.

Certification or validation for claims of eligibility for life insurance, AD&D and LTD is done by the plan sponsor

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4
Q

6.1.4 Contrast the insurer’s role in a self-insured plan with an ASO vs an insurer administration arrangement

A

These are virtually the same procedures.

The key difference is that for self-Insured with an ASO the sponsor is liable for payment.

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5
Q

6.1.5 Discuss considerations in the outsourcing of claims processing to a TPA

A

Claims processing is usually only outsourced when the plan is large.

TPA covers in house dental, health & WI/STD claims processing and benefit capabilities.

The TPA is paid a fee for services. For self insured plans there is a billing arrangement set up to make sure there are sufficient fund.

Typically there are regular reports with respect to account balance and funds withdrawn.

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6
Q

6.1.6 List 5 things that are part of a plan sponsor’s administrative role under an insured self administered arrangement

A

1) Maintain member records
2) Provide plan member eligibility data to insurer or TPA for health, dental & WI/STD processing
3) Certify eligibility for life insurance, AD&D and LTD
4) Prepare monthly premium billings for insured plans
5) Handel all plan member inquiries regarding eligibility

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7
Q

6.1.7 Identify types of plan member data provided by the plan sponsor to the insurer or TPA for health, dental and WI/STD (12)

A

1) Name of plan member & Dependents
2) Sex
3) Family status
4) DOB of mbr and dependents
5) Plan member identification number
6) Language
7) Date of hire
8) Prov of residence
9) Division, class, billing group
10) Benefits the plan member is covered for
11) Effective date of coverage
12) Coordination of benefits information

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8
Q

6.1.8.a Describe online administration under insured self-administered arrangements

A

This provides sponsors with access to the insurer’s administration system through data exchange or online access.

Plan member information is transferred from payroll through electronic data transfer or manual entry.

Direct online access allows insurers to complete new enrollments and make changes to member’s data in real time or overnight.

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9
Q

6.1.8.b List 5 tasks that a plan sponsor can use an online administrator to perform

A

1) Transfer member eligibility information to the insurer
2) Process and update plan member status changes online
3) Calculate plan member contributions for each benefit as well as taxable benefits, premiums and taxes
4) Review premiums, claims and benefit information (read only)
5) Communicate with the insurer

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10
Q

6.1.9 Outline 7 pieces of plan member data the plan sponsor is responsible for inputting on a regular basis

A

1) New member info
2) Terminations for departing plan members
3) New salary information
4) Changes to benefit levels
5) Changes to plan members’ status (single, family, dependents)
6) Changes to beneficiary designations
7) Requests for medical evidence of insurability

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11
Q

6.1.10 Describe insurer administration

A

The insurer preforms all or part of the admin functions.

Information of new eligibilities, terminations and other plan member status changes are transmitted electronically. Payroll systems may interface for larger plans, paper for smaller

The sponsor is charged admin costs either as part of premiums, as part or retention expenses or as a separate monthly charge depending on how the plan is funded

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12
Q

6.1.11 Describe 3 services packages offered by TPAs

A

1) ASO- tracks eligibility, maintains data, handles billing & reporting requirements
2) Claims settlement only. TPA is responsible for all aspects of some claims including certifying eligibility, adjudicating and paying (health, dental, WI/STD)
3) Administration and claims settlement

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13
Q

6.1.12 Describe 4 conditions that may be included in an agreement between and insurer and a TPA

A

1) TPA maintains complete records on which a claim is based and the claims are the property of the insurer which may review them at any time
2) The TPA processes and in some cases pays claims for specified benefits. Including verifying claims and coverage. May be a dollar limit that requires approval.
3) The TPA is responsible for certain costs arising from omissions and clerical errors made in the event of fraud or negligence
4) The insurer provides an administration manual to the TPA outlining its claims administration procedures along with a supply of claims processing documentation

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14
Q

6.1.13 Outline 6 potential advantages to a plan sponsor outsourcing it’s admin to a TPA

A

1) More predictable admin costs
2) Access to expertise in a specialized field
3) Increased flexibility and efficiency
4) Ease of administration by having a central contact point
5) Enhanced plan member access, service and satisfaction
6) Customization of services at a competitive cost

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15
Q

6.2.2 Describe the types of forms used to enroll plan members in a group benefits plan

A

1) Standard - insurers usually require sponsors to use this form
2) Customized incorporates all benefits from various insurers and must be approved by all insurers involved
3) Previous insurer - when a group moves to a new insurer the previous insurer’s forms may be used under certain circumstances. Plan members must be advised and offered the opportunity to update their beneficiaries

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16
Q

6.2.3 Explain how positive enrollment facilitates claims processing

A

Positive enrollment involves collecting more detailed dependent information at the time of enrollment to facilitate the COB provision and the effective administration of pay direct drug

Allows for the management of limiting ages and cohabitation requirements

17
Q

6.2.4 Describe the requirements an employee must typically satisfy to be eligible for group insurance coverage (3)

A

1) Be permanent and actively at work
2) Be included in a covered class
3) Have satisfied the waiting period

18
Q

6.2.5 Describe the usual definition of dependent (3)

A

1) Spouse (married or common law 12 months)
2) Unmarried children under specified age or older age if full time students
3) Unmarried children past limiting age who are mentally or physically incapacitated before the limiting age

19
Q

6.2.4 Identify situations when evidence of insurability if required under a group contract (6)

A

1) mbr election optional life coverage
2) late applicant (31 days past eligibility)
3) withdrew while eligible and wants reinstatement
4) applying for coverage that was previously refused
5) Applying for reinstatement of an overall lifetime max
6) The insured group is very small (10-50 lives)

20
Q

6.2.7 Identify situations when coverage generally terminated for a covered plan member in a single employer plan (5)

A

1) retirement (if no retiree benefits)
2) service with sponsor is terminated
3) member stops actively working (except leaves)
4) member is no longer part of an eligible class
5) premium payments stop

21
Q

6.2.8 Describe a COB provision and to what benefits it applies

A

COB is only applicable for health & dental when an individual is coverage under 2 or more plans

It sets out the priority for insurers and limits the maximum reimbursement to 100% of the loss

22
Q

6.3.1 Explain how premium rate changes to contributory benefit plans should be communicated to plan members

A

Communications should explain the need for increase and any initiatives taken to control costs. (reduce coinsurance, increase frequency limitations on dental )

Members often view plan cost increases negatively and so plan members should be properly communicated with to alleviate concerns

23
Q

6.3.2 Identify information that might be communicated to plan members in the event that the insurer is changed (6)

A

1) Why the insurer was changed
2) When to submit claims to the previous insurer
3) Why deductibles and coinsurance are needed
4) How deductibles and maximums are satisfied under the new benefits plan
5) Which benefits are taxable
6) How to use the plan effectively

24
Q

6.4.1.a Outline the procedure for premium statement preparation and remittance under the self administered plan approach

A

in-house administrator collects premiums from plan members and remits them to the insurer with the sponsor’s premiums

The in house admin prepares and checks statements

25
Q

6.4.1.b Outline the procedure for premium statement preparation and remittance under the Insurer administrated plan approach

A

The insurer prepares premium statements and invoices the sponsor on a monthly basis

The insurer ensures mbr data is accurate and current

26
Q

6.4.1.c Outline the procedure for premium statement preparation and remittance under the TPA administered plan approach

A

The TPA prepares the premium statement and charges the plan sponsor the premium plus admin expenses

The TPA submits the premiums to the insurer on behalf of the plan sponsor and ensures data is accurate

27
Q

6.4.2 Describe the basic administration procedures for premium statements

A

Due dates are typically the first of each month so premium statements are prepared by the third week (20th). All updates to plan member data should be submitted before the statements are produced,

Premiums are due for complete months of coverage regardless of start or termination dates

28
Q

6.4.3 Outline steps an insurer can take if a premium payment hasn’t been received by the end of the grace period specified in the group contract

A

Usually 31 day grace period

The insurer may suspend claims until the account is brought up to date, or terminate the group contract for nonpayment of premiums

29
Q

6.5.1 Explain the purpose of an annual financial report prepared by an insurer

A

Plans using a refund accounting arrangement participate in financial results. A financial report reconciled premiums vs expenses

The results are used to review rates and plan design and a surplus may be refunded or left in an account with the insurer

If the plan sponsors who self insure enter into an ASO agreement with a plan administrator the administrator prepares the financial statement annually. If it is a monthly billed in arrears option the statements are prepared monthly

30
Q

6.5.2 Describe the characteristics of a performance standards agreement and an example of services standards

A

A PSA outlines best practices on behalf of one or more of the parties involved in plan administration.

Usually between insurer and sponsor or insurer and TPA

Outlines specific measurable service standards that must be met.

Examples are claim payment turnaround time, accuracy, call center service statistics. Typically there are penalties or rewards to apply to each service standard

31
Q

What does PSA stand for

A

Performances standards agreement