Module 5

Question 1

A plan where the plan sponsor assumes full liability for the financial legal, and administrative costs of the plan.

Answer 1

Self-insured

Question 2

An alternate term for ‘self-insured’

Answer 2

Self-funded

Question 3

An insure group plan’s premiums surplus or deficit

Answer 3

Experience Results

Question 4

An annual process for insurers to determine the premium for the contract year

Answer 4

Premium Rate Renewal

Question 5

A renewal method where the insurer amalgamates claims experience for an entire book of business into one pool.

Answer 5

Fully Pooled Premium Rate Renewal

Question 6

An annual statement prepared by a contracted service provider to reconcile plan sponsor payments to claims and expenses plus cash flow interest for the period.

Answer 6

Annual financial accounting

Question 7

Protection against exposure to large individual claims

Answer 7

Large amount pooling

Question 8

Protection against potentially catastrophic claims that occur with low frequency. This applies to the entire claim.

Answer 8

Pooling from first dollar

Question 9

Protection against an unexpectedly high level of total claims in any one contract period for one benefit.

Answer 9

Aggregate stop-loss pooling

Question 10

Protection against financial risk beyond a specified number of years for a disability claim, assumed by the insurer

Answer 10

Duration pooling

Question 11

A renewal method where the group’s own claims experience determines premium rates.

Answer 11

Prospectively rated premium rate renewal

Question 12

The amount of money an employer is willing/able to contribute from revenue and plan member contributions to pay for group benefits.

Answer 12

Funding Sources

Question 13

Determination of who bears the underlying risk for paying claims and expenses for a group benefits plan.

Answer 13

Funding arrangement

Question 14

A fully insured plan with no risk to the plan sponsor

Answer 14

Insured non-refund

Question 15

A fully insured plan with some risk o the plan sponsor

Answer 15

Insured Refund

Question 16

The charge paid by the plan sponsor to the insurer for assuming the risk for claims above a pooling threshold

Answer 16

Pooled Premium

Question 17

A fund established by the insure from plan surpluses for the purpose of offsetting a future deficit

Answer 17

Claims Fluctuation Reserve

Question 18

An agreement a plan sponsor enters into with an insurer or third party administrator to administer a plan, with financial and legal responsibility for all plan costs remaining with the sponsor.

Answer 18

Administrative Services Only

Question 19

Projected claims and expenses paid by monthly deposits similar to how premiums are billed

Answer 19

Billed in Advance (Budget ASO)

Question 20

Claims and expenses are reimbursed to the insurer or TPA with a cheque payment in the following month

Answer 20

Monthly billed in arrears

Question 21

Reimbursement to an insurer for claims and expenses is by automatic funds transfer from the plan sponsor’s account, on the basis of cheques issued and expenses

Answer 21

Billed in arrears